China Activity Deceleration

China's May activity data indicates a deepening domestic economic slowdown, marked by significant declines in infrastructure, property investment, and a rare contraction in retail sales. HSBC analysts expect increased fiscal policy intervention to stabilize the economy.

Key Takeaways

• 1.China's economic activity data for May shows increasing domestic pressure, with a significant shortfall in Fixed Asset Investment (FAI).
• 2.Retail sales declined for the first time since the pandemic, highlighting weakness in consumer confidence and domestic demand.
• 3.Policy support is expected to ramp up, particularly in fiscal spending and infrastructure, to stabilize growth and address the property sector drag.

Table of Contents

• China activity
• Facts
• Economics
• Implications
• Disclosure appendix

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