HSBC reviewed China’s April 2026 data, which showed soft retail sales and flexible services and solid industrial output as well as a sharp decline in real estate investment. CPI remains stable while PPI is rising on oil and AI related demand. Both exports and imports show strong year-on-year gains, reflecting external AI demand and industrial upgrading despite domestic demand constraints.
April data shows resilience and soft spots
“Retail sales slowed by 0.2% year-on-year in April, mainly due to a higher base from last year and some decline in the scale of trade-subsidies. Weakness was concentrated in commodities, with auto sales (-15.3% year-on-year) the largest decline, partially offset by the removal of new energy vehicle purchase tax exemptions.”
“Industrial output declined to 4.1% in April (from 5.7% in March) mainly reflecting still-weak domestic demand and a strong pass-through from higher oil costs. Instead, external demand and high-tech manufacturing were the primary drivers, as seen in the improved performance in auto and electronics production, consistent with ongoing export strength.”
“The CPI was broadly stable in April, up 1.2% year-on-year, with the impact of the energy shock mainly concentrated on energy components, while food items turned out to be a drag. The PPI rose 2.8% year-on-year, driven by sharp oil price pass-through, anti-demand and anti-involution measures.”
“Exports increased 14.1% year-on-year in April, with strength supported by global AI demand, China’s competitiveness in transportation-related goods, and lower U.S. tariffs, with momentum regaining momentum as seasonal distortions eased. Imports increased 25.3% year-on-year due to AI-driven demand and industrial upgrades, while rising energy and copper prices also pushed up their import prices.”
(This article was created with the help of an artificial intelligence tool and reviewed by an editor.)
