China’s May economic data in spotlight as investors fret about recovery, lack of action

Previous month’s data intensified concerns among investors and economists, but some say China’s post-Covid recovery has merely stalled, while others remain on the fence

Beijing should release trade and inflation data later this week, while figures on unemployment, investment, industrial output and retail sales are due June 15

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Youth employment hit a record high in April, and the updated figures for May are expected to be released on June 15. Photo: Bloomberg

Published: 8:30pm, 6 Jun 2023Updated: 5:51pm, 7 Jun 2023

The critical question of whether China’s post-Covid recovery is losing or gaining momentum has investors and market watchers – both at home and abroad – clamouring for the latest data that could help them read the tea leaves.

Upcoming releases of key figures from May will arrive amid concerns that Beijing has not done enough to address widely cited business uncertainties, a domestic debt crisis, or the weak “internal driving force” and insufficient demand that leaders pointed to in April.

“Sentiment towards China is outright negative at this moment,” Macquarie Capital economist Larry Hu said after having spoken with clients.

Weak economic data from April, in terms of manufacturing activity, consumption and youth employment, sparked concerns across the foreign business community and among domestic academics while dampening investor confidence in the world’s second-largest economy.

In his research report released on Friday, Hu listed 10 frequently asked questions among investors, including about the deflationary trap, local debt crisis, China-US relations, and whether the economic recovery honeymoon is over.