China’s Economy Maintains Solid Ground in May

July 03, 2025

Trusted Insights for What’s Ahead^®

• Status of China’s Economy: China’s key economic indicators held steady in May. Retail sales growth stood out as a bright spot. Although growth in industrial value added and exports both moderated, they remained solid in the face of volatile US tariff actions. Despite the temporary calm, China’s economy continues to face serious headwinds from weak domestic demand, the continuing and deepening property downturn, and volatility in the global trade policy environment.
• Investment Trends: Manufacturing investment remains robust; property investment continues to contract. Fixed asset investment (FAI) grew 3.7% y-o-y in Jan-May, down from 4.0% in Jan-Apr. Manufacturing investment remains robust (8.5% in Jan-May vs. 8.8% in Jan-Apr), and infrastructure investment remains solid (5.6% in Jan-May vs. 5.8% in Jan-Apr). Conversely, property investment continues to contract (-10.7% in Jan-May vs. -10.3% in Jan-Apr). Looking ahead, the expected acceleration in government bond issuance in the coming months should continue to support infrastructure and manufacturing investment. However, the ongoing property sector downturn will continue to weigh heavily on overall fixed asset investment.