China May Activity Data Call For Faster Policy Support

China's May activity data showed weak retail sales and investment, offset by resilient industrial production and exports. The report argues that softening domestic demand creates an urgent need for accelerated fiscal policy support in the second half of the year.

Key Takeaways

• 1.China's retail sales contracted 0.6% y/y in May, the first decline since 2022, driven by weakness in autos and property-related sectors.
• 2.Fixed asset investment fell 4.1% y/y in the first five months of 2026, hampered by property sector contraction.
• 3.Industrial production remained resilient at 4.5% y/y growth in May, supported by strong exports in high-tech manufacturing.

Table of Contents

• China's May activity data call for faster policy support
• Global asset class preferences definitions
• Appendix

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