2 min readUpdated: Jun 16, 2026 11:27 AM IST
China has reported a drop in retail sales in May — a first in over three years — even as exports rose.
This has underscored a lingering weakness in domestic demand, prompting analysts to suggest measures to induce additional stimulus.
Retail sales decreased by 0.6 per cent year on year in May, a first fall since China withdrew its Covid-19 lockdown at the end of 2022, and down from a 0.2 per cent spike in April, the National Bureau of Statistics (NBS) data showed on Tuesday.
This figure stood in contrast with the economists’ forecast of a 0.09 per cent increase in a poll by financial data provider Wind, despite an uptick in consumer spending over the Labour Day holiday, suggesting that consumers are tightening their budgets amid a volatile job market.
Industrial output expanded by 4.5 per cent year on year in May – higher than 4.1 per cent growth in April, but down from 5.7 per cent in March — with China’s factories resorting to soaring exports to balance out the plummeting domestic demand.
According to Chinese customs data released on Tuesday, the nation’s exports went up by 19.4 per cent year on year to US$376.78 billion in May — well beyond the 12.39 per cent growth forecast by economists at a Wind poll.
China’s imports also grew by 27.4 per cent last month to US$271.35 billion, surpassing predictions of 20.15 per cent growth. China’s trade surplus hence increased to US$105.43 billion last month against US$84.82 billion in April.
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A look at the export performance of a few goods
Integrated circuits: Grew 110.9% in value, while physical volume was up by just 2.1%.
Mechanical & electrical products: Contributing a major share in exports, grew 27.4% in value.
Rare earth elements: Export volume fell 6.39% owing to tight domestic shipping controls.
A look at import performance of a few goods
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Microchips: 68% increase in value, despite a 1% drop in actual volume.
Crude Oil: This has cost China $26.7 billion (up 15.31% in value), even as the physical shipments went up by 29.01% in volume.
Soybeans: The imports plunged 15.3% to 11.79 million tonnes.
