Retail sales in China have fallen for the first time since the pandemic began — Bloomberg
In May, retail sales in China fell by 0.6% compared to the same period in 2025, marking the first decline in this indicator since the lifting of strict lockdown restrictions in late 2022.
According to analysts, the negative trend has affected key sectors of the country’s domestic market.
The released statistics significantly heightened international investors’ concerns about the actual state and prospects of the world’s second-largest economy.
The domestic auto market took the hardest hit, with new car sales plummeting by 16% overnight.
At the same time, the country saw a deepening of deflation in residential real estate prices.
Total investment in fixed capital for the first five months of 2026 fell by 4.1%, which was significantly worse than previous forecasts by government experts.
In contrast to the domestic consumer sector, industrial production in China is showing positive momentum and grew by 4.5% compared to 4.1% in April. This trend was significantly driven by a strong boom in national exports.
The main driver of the industrial recovery was high global demand for high-tech hardware, which is directly linked to developments in the field of artificial intelligence.
New statistical data confirm experts’ concerns, as actual growth figures in April stood at around 4%. This is significantly below the official annual target, which Beijing set at 4.5%–5%.
The situation remains extremely alarming in the area of domestic capital investment as well.
Private capital expenditures fell by 7.1% in the first five months of 2026, marking the worst performance since 2020, while investments in manufacturing declined for the first time in six years.
Leading financial analysts note that technological breakthroughs and a focus on foreign markets are currently unable to offset the overall weakness of domestic demand.
“While there are pockets of growth in the technology and export sectors, the economy as a whole is still in a difficult position,” says Lynn Song, chief economist at ING Bank in China.
Bloomberg reports on this.
China Responds to Strike on Kyiv-Pechersk Lavra
China sharply responded to the EU over new sanctions against Russia
