BEIJING – China’s economy slowed across the board in April with investment resuming declines while retail sales and industrial output fell short of forecasts, underscoring the economy’s vulnerability in the face of a global energy crisis.
Fixed-asset investment unexpectedly shrank 1.6 per cent in the first four months of 2026 from a year earlier, after rising 1.7 per cent in the first quarter. Retail sales missed forecasts and rose just 0.2 per cent in April, according to data released by the National Bureau of Statistics on May 18.
Industrial production also grew slower than expected at 4.1 per cent in April, down from 5.7 per cent in March and worse than the median forecast of 6 per cent. The surveyed urban jobless rate eased to 5.2 per cent, after hitting a one-year high of 5.4 per cent in March.
The disappointing performance of the world’s second-biggest economy in April came after soaring trade – propelled by the global artificial intelligence investment boom – kept growth on track to meet the 4.5 per cent to 5 per cent target pursued by Beijing.
Booming exports have been shielding China from the fallout of the Iran war even though the adverse consequences of higher oil prices are playing out on factory floors as manufacturers cope with surging raw material costs.
Chinese exports are expected to remain strong after climbing 15 per cent in the first four months from a year ago. Stabilising trade ties with the United States, reinforced by President Donald Trump’s visit to Beijing, further bolster the outlook.
But a turnaround is nowhere in sight for domestic consumption. New loans to households slumped in April, as consumer confidence shows little sign of improvement.
The jobless rate of the key demographic of early-career workers climbed, to the highest in more than two years, raising concerns over risks for employment from artificial intelligence.
Chinese policymakers have appeared to be taking a wait-and-see approach to the two-speed growth phenomenon, after years of efforts to coax consumers back into shops delivered only marginal gains.
The government pulled back on fiscal spending in March, while the central bank has steered clear of even hinting at any further loosening in policy, amid ample market liquidity and weak demand for credit. BLOOMBERG
