17th June 2026: May Macroeconomic Data

RUI: According to data published by the National Bureau of Statistics on 16^th June, industrial production growth among larger firms in China—those with an annual income upwards of 20 million RMB—accelerated in May. Production at larger industrial firms rose by 4.5 per cent year-on-year during the fifth month of the year, 0.4 percentage points faster than in April.

XINHE: 29 of the 41 main industrial sectors tracked by the Bureau’s industrial production index registered y-o-y growth; the computer, communications, and other electronic equipment manufacturing sector recorded the fastest, with this coming in at 17 per cent.

RUI: In contrast, the total value of retail sales in China fell in May 2026, as the mismatch between supply and demand in the country widened. Thereby, total retail sales decreased by 0.6 per cent compared to 2025’s levels, the first monthly decrease seen since December 2022. Decreasing sales of automotives; household appliances; and building and decoration materials all contributed to this result.

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XINHE: On 15^th June, European Commission President Ursula von der Leyen addressed the Group of Seven—or G7— in France, where she expressed the need to address structural challenges facing the global economy, including global trade imbalances and overcapacity.

RUI: Speaking on the former, von der Leyen pointed out that in 2025, for the first time ever, all EU Member States recorded a trade deficit with China. Speaking on this, she noted that the current situation is not sustainable, while also stating that the EU’s current approach to EU-China trade and investment relations centres on the notion of de-risking, not decoupling.

To achieve its de-risking objectives, the Commission President added that the bloc needs to step up its efforts to build-up its domestic industrial capacity, diversify its supply chains, and to protect its Single Market from unfair trading practices.

XINHE: The address follows a number of similar statements made by EU officials in recent months. It also comes at a time when the EU is debating introducing new legislation, including the Industrial Accelerator Act, the Cybersecurity Act 2, and an Overcapacity Instrument, all of which would likely have ramifications for the bloc’s trade and investment relations with China.

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RUI: According to data published on 9^th June by the China Passenger Car Association, or CPCA, China exported 784,000 passenger vehicles to the rest of the world in May, an increase of 75.1 per cent y-o-y.

XINHE: China’s exports of new energy vehicles (NEVs) recorded particularly strong growth, increasing by 112.6 per cent year-on-year in volume terms, to 424,000 units. As a result, sales of NEVs accounted for the bulk—54.1 per cent—of China’s total passenger vehicles exports in May.

RUI: According to the CPCA, exports have become the main growth engine for China’s automotive sector, which continues to experience weak domestic consumption at home, with exports to the Latin American and European markets seeing particularly strong growth.

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RUI: On 8^th June, the Council of the EU adopted new rules aimed at protecting the EU steel market from global overcapacity. The new framework introduces lower import quotas, higher duties on imports exceeding quotas, stricter origin tracing requirements, and a reinforced review mechanism.

XINHE: Following trade measures being taken by third countries—such as the US—to limit the impact of overcapacity in the steel sector on their respective economies, the EU market has become the primary recipient of global excess steel, especially from China. In 2024, the EU imported 11.7 per cent of its iron and steel from China, with the country ranking as the main source of imports of the metals to the bloc, ahead of India and Turky.

RUI: To help address the issue of steel overcapacity, in December 2025, China announced the roll out of a steel export licensing system, which came into force on 1^st January 2026. It remains to be seen, however, how effective this measure will be.

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RUI: The first half of 2026 was marked by widespread global uncertainty. The ongoing conflict in the Middle East disrupted global energy markets and supply chains alike, while the AI revolution is now transforming some companies business models.

XINHE: Amid this increasingly complex international landscape, China published its 15^th Five-year Plan in March, which sets the direction of Chinese policy making for the 2026-2030 period. The document places an increased emphasis on the need to develop ‘new productive forces’, and comes at a time when businesses operating in China face a number of headwinds, including the country’s economic slowdown, heightened geopolitical tensions, involution, and constrained domestic demand.

RUI: Join us on 2^nd July online or in person in Beijing to learn how the latest economic developments and Chinese regulatory policies can be expected to impact your business, as well as to get insights on how your enterprise can better navigate the fast-changing global economic landscape.

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XINHE: Thanks for listening, and don’t forget to tune in again next week.

RUI: In the meantime, please find useful links in the episode notes.

XINHE: Listen to the full episode on our WeChat account or your preferred podcast platform.

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