China’s retail sales fell last month for the first time in more than three years, data showed today, as leaders of the world’s second-largest economy struggle to kickstart domestic consumer activity.<\/p>\n
The 0.6% year-on-year drop in May, revealed by the National Bureau of Statistics, was a big miss compared with the 0.2% forecast in a Bloomberg survey, which was itself in line with April’s lacklustre performance.<\/p>\n
While the Chinese economy has enjoyed a historic boom in exports, it has been dragged for years by weak household consumption that has so far failed to recover from the Covid pandemic.<\/p>\n
Beijing is targeting overall growth of 4.5-5% this year, though soaring energy costs and uncertainty caused by the Middle East crisis have complicated matters.<\/p>\n
NBS spokesperson Fu Linghui acknowledged in a news conference a “complex and volatile international environment” and domestic “high temperatures and heavy rainfall… that disrupted market supply and demand”.<\/p>\n
The sales slump – the first since December 2022 – was caused in large part by lower purchases of big-ticket items such as cars, home appliances and furniture.<\/p>\n
Auto sales fell 22.3% year-on-year in May, data from the China Passenger Car Association showed last week.<\/p>\n
Leaders have also been battling a persistent slump in the property sector, a once-booming industry that previously fuelled national growth and provided a key store of wealth for consumers.<\/p>\n
New home prices fell last month in 67 out of 70 major cities surveyed, according to NBS data today.<\/p>\n
Policy ‘fine-tuning’<\/p>\n
Industrial production rose 4.5% on-year last month, separate figures from the bureau showed, an improvement from April’s 4.1%, which had been the slowest growth in nearly three years.<\/p>\n
But in another gloomy sign, fixed-asset investment slid 4.1% year-on-year in January-May, a significant widening from the 1.6% drop in January-April.<\/p>\n
Domestic demand remains lacklustre while industrial production is still sluggish, wrote Julian Evans-Pritchard from Capital Economics in a note.<\/p>\n
“All told, the May data suggest that the economy is still struggling, though we expect strong exports to provide a prop to gross domestic product growth this year,” he said.<\/p>\n
Weak retail sales data will put pressure on the government to consider policy measures to stabilise consumption, said Zhiwei Zhang of Pinpoint Asset Management.<\/p>\n
More policy “fine-tuning” will likely come in July after second-quarter GDP data is released, Zhang added.<\/p>\n
Chinese exports surged almost a fifth in May, figures showed last week, marking a bright spot for the Chinese leadership as it struggles to kickstart growth while navigating trade frictions with the US.<\/p>\n
The 19.4% year-on-year jump in overseas shipments was driven largely by artificial intelligence and auto exports, the General Administration of Customs said, and topped the 15% forecast in a Bloomberg survey of economists.<\/p>\n
“The export boom can help to mitigate the weak domestic demand in the short term,” Zhang said.<\/p>\n
“But given the size of China’s economy, strong export growth will likely lead to tension with the trading partners,” he added.<\/p>\n","protected":false},"excerpt":{"rendered":"China’s retail sales fell last month for the first time in more than three years, data showed today,…\n","protected":false},"author":2,"featured_media":503518,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-503517","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/503517","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=503517"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/503517\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/503518"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=503517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=503517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=503517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}