China’s National Bureau of Statistics reported on May 18 that April retail sales rose 0.2% year-over-year. This figure missed economist forecasts of a 2.0% increase and slowed from the 1.7% growth recorded in March. The result marks the weakest performance since China lifted Covid restrictions in late 2022.
Households avoided big-ticket items as domestic car sales fell 21.6% year-on-year. This represents the seventh consecutive monthly decline for the automotive sector. Industrial production and investment also contracted unexpectedly during the period. The broad weakness raises risks for global brands like Tesla that rely heavily on the Chinese market.
The offshore yuan weakened following the data release. Analysts warn that strong exports can no longer offset severe domestic weakness. The report increases pressure on Beijing to implement significant stimulus measures to boost consumer confidence and stabilize growth.