U.S. tariffs hit Chinese exports, pushing China’s economy into a mixed performance in May. While retail sales climbed, factory activity lost momentum. The latest data underscores how ongoing trade tensions continue to shape global markets.
China’s retail sector saw growth of 6.4% compared to last year. Several factors contributed to this rise. For one, many goods originally meant for export remained in China due to shipping suspensions. In addition, a large online shopping event boosted consumer demand. The “618” sales festival, which started in May, offered massive discounts through platforms like JD.com.
However, not all sectors followed this positive trend. Manufacturing output grew by only 5.8% in May. That’s a slowdown from 6.1% in April and 7.7% in March. Analysts blame rising U.S. tariffs, which began taking effect earlier this year.
U.S. tariffs hit Chinese exports, forcing many firms to shift strategies. As a result, exports to the United States dropped 35% in May year-on-year. Although overall exports rose 4.8%, this increase missed economists’ expectations. In April, total exports had jumped 8.1%, highlighting the slowdown.
Meanwhile, investment in China’s real estate sector fell sharply. From January to May, it dropped 10.7% compared to last year. Housing prices also slipped slightly in many cities. With property markets still weak, consumer confidence remains low.
Consumer prices also declined. In May, they dropped 0.1% from a year earlier and 0.2% from April. Deflation poses another concern for policymakers in Beijing.
Spending on factory equipment and fixed assets rose only 3.7%. This suggests caution from businesses facing uncertain trade conditions. Despite efforts to boost internal demand, exports remain a key economic driver.
Experts say the situation could worsen. Talks between U.S. and Chinese officials continue. But the risk of new tariffs remains high. The next deadline for reaching a deal is set for August 10.
U.S. tariffs hit Chinese exports, and this impact may deepen by year-end. Unless trade conditions improve, China’s slowdown could affect global growth.
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