China’s Factories Slow, But Consumers Unexpectedly Perk Up

China’s industrial output growth slowed to a six-month low in May, while retail sales rebounded, offering temporary relief for the world’s second-largest economy amid a fragile trade truce with the U.S., Joe Cash and Ellen Zhang reported for Reuters.

China's industrial output rose 5.8% year-on-year—down from April’s 6.1% and missing expectations for a 5.9% increase. I Photo: Foxconn

The mixed indicators come as China’s economy remains under pressure from U.S. President Donald Trump’s escalating tariffs and chronic weakness in the domestic property sector, where falling home prices have shown no sign of reversing.

According to National Bureau of Statistics (NBS) data, industrial output rose 5.8% year-on-year—down from April’s 6.1% and missing expectations for a 5.9% increase. It marked the slowest growth since November 2024.

Retail sales, however, jumped 6.4%, accelerating from a 5.1% gain in April and beating forecasts of 5.0%, representing the fastest pace since December 2023.

Still, the mixed data failed to reassure markets. Chinese blue-chip stocks erased brief early gains recently, as concerns lingered over sluggish momentum. “The U.S.-China trade truce was not enough to prevent a broader loss of economic momentum last month,” said Zichun Huang, China economist at Capital Economics.