Key indicators of the Chinese business scene, including industrial and retail sales, logged solid results in March, indicating that Beijing's economic stimulus programs may be gaining traction.

Retail sales in China rose 5.9% on year, up from the 4% on-year rise recorded in the combined first two months of the year, reported the National Bureau of Statistics (NBS) on Wednesday.

China's retail sector in March benefited from government-subsidized "trade in" programs, in which consumers receive rebates for swapping in used consumer durables, including home appliances and automobiles, for new goods, said ING Think, an arm of the Dutch investment house.

"We are seeing a clear impact from the trade-in policy in the retail sales data," said ING Think. "Most (trade-in) categories saw growth far eclipsing headline retail sales growth, with household appliances (up 35.1% on year in March) and communication equipment (up 28.6%) two clear standout categories. Auto sales also managed a respectable 5.5% year-over-year growth in March."

China's huge factory sector also performed well in March, with the value add of the nation's manufacturers rising 7.7% on year, up from the 5.9% on year gain logged in the combined first two months of 2025, reported the NBS.

China's output in high-tech goods led the way in March, growing by 10.7% on year. "By product output, we saw strong growth in power generation equipment (107.2% on year), new energy vehicles (40.6%), and industrial robots (16.7%). Semiconductors (9.2%), smartphones (7.0%), and computer equipment (7.8%) saw growth closer to the aggregate level," reported ING Think.

However, the new trade policies and higher tariffs of the Trump Administration could cramp China's industrial segments in the coming months, said ING Think.

"Moving forward, the (US) tariff shock is expected to have a spillover effect on manufacturing. Strengthening domestic demand and seeking alternative export destinations will help offset some of the impact. But manufacturing is likely to take a hit, nonetheless," said ING Think.

Separately, slightly exceeding official targets, mainland China's gross domestic product (GDP) expanded by 5.4% in the first quarter, on year, reported the NBS.