China's retail sales fell 0.6% year-on-year in May 2026, the first decline since December 2022, defying expectations of a flat reading and underscoring weak domestic demand in the world's second-largest economy.
Where spending fell
Discretionary and big-ticket purchases led the drop: automobile sales plunged 16.1%, home appliances and audiovisual equipment fell 15.6%, building and decoration materials declined 13.6%, gold and silver jewellery dropped 8.9%, furniture fell 8.7% and sports and entertainment products slid 8.0%.
Investment contracts
Urban fixed-asset investment contracted 4.1% as of end-May, dragged by real estate and manufacturing, with manufacturing investment shrinking for the first time since December 2020. Industrial output was the lone bright spot, rebounding from April's near three-year low.
The data highlighted a two-speed economy: resilient exports buoy factories, but domestic demand remains soft amid a multi-year property slump.
Sources: CNBC, Reuters, Trading Economics.