By Gina Lee

Investing.com – China’s factory production, retail sales, and fixed asset investment in the first two months of 2022. The growth came despite the country’s latest COVID-19 outbreak, a property market downturn, and growing global uncertainties.

The latest data from the National Bureau of Statistics (NBS), released Tuesday, showed that China grew 7.5% in January-February 2022 year-on-year. This is the fastest rate since June 2021. Investing.com had forecasted a growth rate of 3.9%, and a rise of 4.3% for December 2021.

The year-on-year growth was 6.7% The fastest pace since June 2021. Because of the rising demand due to the Beijing Winter Olympics, Lunar New Year holiday and increasing supply during these holidays. This is in contrast to the December 2021 growth rate of 1.7% and forecasts by Investing.com which predicted a growth rate of 3%.

Also, data showed that year-on–year the growth rate was 12.2%. That compares to December 2021’s 4.9%, which is the highest recorded since July 2021. Investing.com forecasts a growth rate of 5%. In January and February, the rate rose to 5.5%. This is higher than the 5.1% recorded in December 2021.

“Overall, the economy had good recovery momentum in January and February,” NBS spokesman Fu Linghui said in a statement. However, the “external environment still remains complex and grim, and there are many risks and challenges faced by China’s economy,” the statement added.

Some investors warned however that COVID-19 and the resulting lockdowns may spread to other cities, threatening economic growth.

Wang Jun, chief economist at Zhongyuan Bank said that he doesn’t believe we shouldn’t be misled by Jan-Feb data. He suggested to Reuters that the bank should cut interest rates as well as reserve requirements ratios quickly. We should never hesitate to support loosening policy.”

The People’s Bank of China maintained the 2.85% one-year medium term lending facility at 2.85%, contrary to market expectations.

China’s factory activity is normally slow during the first two months of the year due to the Lunar New Year holidays. COVID-19 protection measures ensured that many workers stayed home during this holiday, which allowed for higher productivity.