China May Macro Data Preview

The report highlights a deepening economic divergence in China, where strong AI-driven manufacturing and exports contrast with weak domestic consumption and property investment.

Key Takeaways

• 1.Chinese economy continues to show deep divergence between external demand-driven tech/AI growth and weak domestic consumption/property sectors.
• 2.Trade growth is expected to remain rapid due to AI-related trade, while retail sales may contract for the first time since 2023.

Table of Contents

• Economic divergence likely deepened in May
• May PMIs remained resilient alongside sectoral disparity
• High-frequency indicators showed domestic demand lagged
• IP growth likely edged up, while retail sales, FAI declined
• We expect trade growth stayed strong in May
• Inflation likely climbed higher
• M2 and credit growth likely eased in May

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