Summary

• The divergence within China's economy is widening.
• Retail sales and fixed asset investment growth both plummeted to the lowest levels since the pandemic, as domestic demand remains soft.
• But industrial production remains a bright spot, supported by strong external demand.

By Lynn Song

Retail sales growth fell into negative territory in May

China's retail sales growth fell to -0.6% year-on-year in May, down from 0.2% in April. The data was in line with our forecasts but weaker than market consensus (market -0.2%, ING -0.6%). It’s