Not Too Worried About the April Data Miss

China's April economic data disappointed significantly, marking the largest downside surprise since 2023, though Goldman Sachs attributes this to energy shocks from the Iran war and policy-driven seasonality rather than broad deceleration.

Key Takeaways

• 1.The April data miss was the largest downside surprise since May 2023, but it likely overstates economic weakness.
• 2.Industrial production (IP) was heavily impacted by energy supply shocks from the Iran war, explaining half of the IP miss.
• 3.Weak retail sales are a byproduct of 'payback effects' from government trade-in programs and EV tax changes, not a trend deterioration.

Table of Contents

• IP Data Shows Impact of the Iran War
• Retail Sales Distorted by Government Policies
• Investment Weakness Likely Reflects a Policy Choice
• The Big Picture
• Exports and the Property Market Key to Watch
• Disclosure Appendix

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