Standard Chartered economists Hunter Chan and Shuang Ding assess China’s May data as showing solid production but softer demand. They expect Industrial Production growth to partially recover from April’s slump, supported by strong exports and high-tech manufacturing. Fixed Asset Investment is projected to remain weak amid the housing downturn, while credit growth is likely to slow further as demand stays subdued.

Production resilient as demand softens

"PMI surveys suggest production activity remained solid in May, while demand softened Real activity growth likely recovered partly from April’s slump, while investment likely declined Credit growth may have slowed further as demand likely stayed weak Hot outside, cool inside The official manufacturing PMI fell to 50.0 in May from 50.3 previously, undershooting consensus expectations."

"Both the new orders and new export orders PMIs slipped into contraction territory, pointing to softer demand."

"Industrial production (IP) growth likely recovered to 5.0% y/y in May after slowing to 4.1% in April, supported by robust export activity."

"Fixed asset investment (FAI) may have contracted by 2.0% y/y in 5M-2025 amid the persistent housing downturn."

"The US-China summit likely helped stabilise business sentiment, partly offsetting the impact of sectoral capacity management measures under competition-related regulations, in our view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)