Buying mood despite headwinds: China's data in conflict

Export growth is slowing down. Thanks to circumvention strategies via other countries and government measures, the trend is surprisingly stable. The tariff conflict has not been resolved and tensions are therefore likely to persist, which will keep the volatility of Chinese equity investments high.

In May, the Chinese economy recorded a surprisingly strong increase in retail sales, which was due in particular to the May Day holiday and the Dragon Boat Festival. Government purchase subsidies and the early 618 shopping festival led to an increase in consumption, particularly in the electronics, furniture and jewelry sectors. Some regions have already fully exhausted their subsidy funds, but around half of the state subsidies are still available. It can therefore be assumed that consumption will remain high in the short term.

This contrasts with a weak trend in investments: Private spending remained stable, while government investment recorded a significant slowdown in growth. In addition, industrial production recorded lower growth in the middle of the quarter, which is partly due to the declining demand for exports. The latest trade talks between China and the US did not lead to any significant rapprochement, which continues to make a rapid recovery in foreign trade more difficult.

Dino Marcesini, Partner
‍

IMF Economic Forecasts

GDP 2025 4.00%

Inflation 0.00%

Shibor 3mt 1.58%

_{Sources: IMF, ZKB, Chefinvest}

‍^{As at: 07.07.2025}

‍