Chinese retail sales showed signs of improvement in May, while industrial production growth slowed, according to official data released on Monday. The data indicated that the economic recovery in China, the world’s second-largest economy, remains uneven.
Retail sales, a key indicator of consumer spending, increased by 3.7 percent year-on-year in May, up from a 2.3 percent growth in April. This growth exceeded the 3.0 percent forecast in a Bloomberg survey of analysts, providing hope that Chinese consumers were returning to shopping after a period of uncertainty.
On the other hand, industrial production growth decelerated in May, expanding by 5.6 percent compared to 6.7 percent in April. This was below the 6.2 percent forecast in the Bloomberg survey. The National Bureau of Statistics characterized May’s performance as “generally stable,” noting that the national economy continued to recover and improve.
While recent data has shown some positive signs, including the International Monetary Fund’s upward revision of China’s 2024 economic growth forecast to five percent, challenges remain. Urban property prices across the country continued to decline in May, despite measures introduced by authorities to support the real estate sector. According to Zhang Zhiwei, President and Chief Economist at Pinpoint Asset Management, these measures have not yet boosted demand from homebuyers.
Zhang also noted that industrial production growth outpaced retail sales growth, suggesting that external demand has remained strong to support the industrial sector. The uneven economic recovery in China reflects ongoing challenges facing the nation’s economy.
