China's economy displayed increasing unevenness in May, with retail sales declining for the first time in over three years and investment weakening even as industrial production picked up pace.
Tuesday's official data highlighted a two-speed growth pattern in the world's second-largest economy, with factories buoyed by surprisingly resilient exports but domestic demand weakening amid a multiyear property market downturn.
Retail sales, a key gauge of consumption, slid 0.6% in May, data from the National Bureau of Statistics (NBS) showed, reversing April's 0.2% rise and below the estimated 0.0% in a Reuters poll. It was the first monthly fall since December 2022.
The fragility was evident in the auto sector. A downturn in domestic car sales extended into an eighth consecutive month in May, underscoring softening demand in the world's largest auto market, where pressure is likely to persist through the rest of the year.
Travelers' spending during the five-day Labour Day holiday in May was lukewarm, and the impact of the government's consumer-goods trade-in scheme is fading. A high base from May last year also contributed to the decline.
