The data for China's economy in the first two months of this year present an inconvenient reality for those in the West trying to peddle a narrative that China's economy has had its day. For some time, they have been predicting, if not quite hoping, for a decisive downturn in the world's second-largest economy. Yet the evidence suggests something different: stable growth driven by policy, structural change and the economic fundamentals.

According to the National Bureau of Statistics, industrial value-added grew by 6.3 percent year-on-year in January and February, an acceleration from December. Retail sales rose by 2.8 percent, also picking up pace. Perhaps most strikingly, fixed-asset investment returned to positive territory, rising 1.8 percent after a contraction in 2025. These are not the numbers of recession.

But the more telling evidence lies in the composition of growth. Industrial expansion is being led not by the old engines of property and the traditional industries, but increasingly by equipment manufacturing and high-tech sectors. Output in high-tech manufacturing rose by more than 13 percent year-on-year, while investment in aerospace and information services surged. This aligns closely with the strategic emphasis of the 15th Five-Year Plan (2026-30), which places technological upgrading and new quality productive forces at the center of development.

Consumption, a major growth driver, is also showing signs of vigor. Service-sector spending, particularly during the Spring Festival holiday in mid-February, has been robust, with tourism and catering rebounding strongly. This indicates that policy measures aimed at boosting domestic demand are gaining traction. Importantly, the pattern of consumption is shifting toward higher-quality goods and services, suggesting that structural upgrading is proceeding alongside cyclical recovery.

Investment, meanwhile, has quietly turned a corner. The return to positive growth reflects not only cyclical factors but also the launch of infrastructure projects associated with the new planning cycle. Infrastructure investment grew at a double-digit rate, supported by policy financing and local government initiatives. Manufacturing investment is also recovering, particularly in sectors related to technological self-reliance.

It is not all easy going however. The property sector remains under pressure, and the recovery in consumption is still incomplete. External conditions are uncertain, with geopolitical tensions and a likely slowdown in export growth.

Yet it would be equally unwise to ignore what the data do show: China retains sufficient macroeconomic policy space and the institutional capacity to stabilize growth while enhancing its quality. Fiscal support, targeted credit expansion and industrial policy can be used in a more coordinated manner to accelerate structural transformation at lower costs.

This has implications beyond China's domestic economy. It influences the context for its external economic relations, particularly with other major economies. Following the recent China-US economic and trade consultations in Paris, Vice-Premier He Lifeng emphasized the importance of stable and constructive economic ties between the two countries.

And a stabilizing Chinese economy provides policymakers with more confidence and flexibility in international negotiations. A solid domestic base allows for calibrated policy responses to external shocks, including trade frictions and some economies' unilateral moves.

This is not to suggest China seeks confrontation. On the contrary, its focus remains dialogue and cooperation. Yet the "balance of influence" on the negotiating table is inevitably affected by "relative economic performance".

The baseless notion of a "China recession" has always been analytically weak. The skeptics of the Chinese economy should realize that its transition is gaining momentum, consumption is recovering, investment is stabilizing and industrial upgrading is accelerating. These trends provide a reliable launchpad for the Chinese economy to secure a smooth beginning to the 15th Five-Year Plan period.

It is no secret that some skeptics have deliberately sought to distort market expectations by spreading unfounded pessimism about China's growth prospects. Nor is it coincidental that these same voices are largely the ones preaching fallacies of "decoupling" and "de-risking" across the global economic debate.

China's economy is a large, complex system undergoing managed adjustment, supported by substantial policy resources. In such circumstances, engagement — rather than wishful thinking about decline — remains the more rational perspective.