China's April Slowdown Highlights Dilemma Between Growth and Inflation

China's economic activity data for April 2026 came in significantly below expectations, with retail sales and industrial production hitting multi-month or multi-year lows. While exports remain resilient and property prices show tentative signs of bottoming in top-tier cities, the broader economy faces a dilemma between growth risks and rising inflation.

Key Takeaways

• 1.China's domestic activity data for April 2026 disappointed across the board, signaling a Q2 slowdown.
• 2.Retail sales growth slumped to 0.2% YoY, the slowest since 2022, driven by weak auto sales and a correction in gold and jewelry demand.
• 3.Industrial production slowed to a 33-month low of 4.1% YoY as sluggish domestic activity, particularly in real estate, offset export strength.

Table of Contents

• Retail sales slumped to lowest level since 2022
• Trade-in policy headwind and falling gold prices drive April's retail sales miss
• Industrial production unexpectedly slows despite export boom
• Industrial production slumped in April despite continued strength in export related categories
• Fixed asset investment cratered back into negative territory
• FAI fell back into negative territory as investment appetite stays sluggish
• Property prices fall at a slower pace as tier 1 cities see gains
• More cities saw price gains or stabilisation in April
• April data highlights dilemma between growth and inflation

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