BEIJING – Chinese consumers stepped up to bolster the nation’s economy in May, driving a significant and better-than-expected increase in retail sales that provided a crucial bright spot amid ongoing trade pressures. The surge in domestic spending offers a hopeful sign for economic recovery, even as the manufacturing sector continues to face headwinds from U.S. tariffs.
Data released by the National Bureau of Statistics on Monday showed that retail sales climbed 6.4% last month compared to the previous year. This figure marks a robust acceleration from April’s 5.1% growth and comfortably surpassed the 4.85% increase that financial analysts had projected.
The strong performance was largely fueled by government-led initiatives aimed at stimulating domestic demand. A nationwide trade-in program encouraging consumers to upgrade household appliances and other goods has proven particularly effective. By the end of May, the program had already generated approximately 1.1 trillion yuan (US$153 billion) in sales for the year. Demand was so high in some regions that local subsidy funds were reportedly exhausted, forcing a temporary pause in the program.
Economic analysts noted that spending was particularly strong in the dining and home appliance sectors. The momentum was also likely amplified by consumers shopping in advance of the massive “618” online shopping festival, one of China’s largest e-commerce events, which culminates on June 18.
Despite the positive domestic picture, the report highlighted the persistent challenges facing China’s export-oriented industries. However, the resilience of the Chinese consumer suggests that strengthening domestic demand could provide a viable path forward for the country’s economic recovery efforts.
