An interesting paradox are found in the last monthly elements (May 2025) by China for the private consumption.
Based on the official announcement, consumption in China (and especially retail sales), in the midst of a trade war, is launched – strong in government actions – while the industrial sector and investment in fixed assets show net fatigue.
Retail sales recorded growth of 6.4% compared to last year, the strongest rate since December 2023, exceeding 5.0% of analysts and 5.1% of April. The push came from both the exchanging old electrical appliances, which offered discounts, and from an “online trade festival” in May. This is a confirmation of the government’s intention to support internal demand, which is considered a critical lever for overall growth.
On the contrary, industrial production showed a growth rate of only 5.8%, from 6.1%in April, below 5.9%. This is the worst performance since November 2024.
This restriction shows that, despite the respite in the trade confrontation with the US, demand overseas remains weak – Chinese exports to the US declined by 34%, the highest drop in coronovation.
Overall investments in fixed assets (constructions, factories, infrastructures) increased only 3.7% in the first five months 2025, compared to 4.0% in the four months – and slightly below the expected 3.9%. The main reason is the insistence of the crisis in real estate: investment in the construction industry decreased by 10.7%, new building permits fell by 22.8%, while home prices continued to shrink.