China Fiscal Pullback

China's April activity data disappointed across retail, industrial, and investment sectors, reflecting a deliberate moderation in fiscal support. ANZ expects slower GDP growth for the rest of 2026 as policy shifts toward structural social security goals.

Key Takeaways

• 1.China's activity data for April disappointed due to a moderation in fiscal policy support and a shift toward a cross-cyclical policy framework.
• 2.Retail sales saw the largest downside surprise, growing only 0.2% y/y, the weakest since the post-COVID reopening.
• 3.Industrial production fell below expectations at 4.1% y/y, impacted by an oil shock and rising costs for domestic manufacturers.

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