China Center Data Flash: Flat data in May -- another post-stimulus lull

Data Flash is a brief interpretive summary of China’s official monthly economic data release. 

• Credit growth slowed for the second month in a row, and housing market hyperbole has begun to fade. The Q1 growth spikes in these two areas don’t have sustainable momentum. But restrained stimulus on the demand-side factors is arguably good for longer-term adjustments and as a facilitator of supply-side structural reform, should that initiative gain traction.
• Slow but steady growth was seen in the real sectors across industrial production, fixed asset investment, and retail sales. However, this was primarily a knock-on effect of the Q1 credit boom and the associated housing market melt up. It will be important to monitor real sector growth momentum if and as policy support wanes.
• The trading sector remains depressed. Export growth took another hit in May. The RMB devaluation since last August, even though significant, has failed to boost export growth. Britain’s exit from the EU and the possibility of more widespread de-globalization is adding downside risk to China’s trading sector.