Overview
- Official May figures released on Tuesday showed retail sales fell 0.6% year-on-year, marking the first monthly drop since December 2022 and signaling a sharper pullback in household spending.
- Fixed-asset investment contracted 4.1% in the January–May period and property investment plunged about 16.2%, deepening the multi-year real estate slump that is weighing on construction and local government finances.
- Industrial output rose 4.5% in May and exports jumped roughly 19.4%, with strong demand for AI-related chips and other high-tech goods helping factories offset weak domestic sales.
- Bank lending data point to household deleveraging, with new loans just 520 billion yuan in May and outstanding household credit declining, which is limiting recovery through credit-fuelled spending.
- Beijing has used targeted measures such as rate cuts, subsidies and local property support with limited effect and faces pressure to decide on larger policy moves at the July Politburo leadership review.