China's economy lost momentum sharply in April as retail sales posted their weakest growth since late 2022 and factory output slowed more than expected, adding pressure on Beijing as officials struggle to revive consumer confidence, stabilize the property sector and shield growth from rising global tensions.
Fresh data released by China's National Bureau of Statistics showed retail sales rose just 0.2% in April from a year earlier, missing economist forecasts of 2% growth and slowing dramatically from March's 1.7% increase. The figure marked the weakest retail expansion since December 2022, when China was emerging from strict pandemic restrictions.
Industrial production also disappointed. Factory output increased 4.1% in April, below Reuters expectations for 5.9% growth and down from 5.7% in March, signaling softer domestic demand even as exports remained comparatively resilient.
The slowdown exposed widening fractures inside the world's second-largest economy. While advanced manufacturing and overseas shipments continue to provide support, large parts of the domestic economy remain weak, particularly housing, consumer spending and private-sector investment.
China's National Bureau of Statistics acknowledged the imbalance directly in its official statement, warning that "the domestic imbalance between strong supply and weak demand is still acute."
The deterioration was especially visible in consumer sectors tied to household confidence.
According to Reuters, domestic car sales plunged 21.6% in April from a year earlier, extending a seven-month streak of declines. Economists told Reuters that Chinese households are still willing to spend selectively on necessities and services such as food, clothing and communications equipment, but remain cautious about major purchases linked to credit conditions and the property market.
The property sector continued to drag heavily on overall growth.
Official figures showed:
- Real estate investment fell 13.7% in the January-April period
- Sales of newly built commercial buildings dropped 14.6% by value
- Fixed-asset investment declined 1.6%, reversing from 1.7% growth in the first quarter
The investment contraction underscored how Beijing's years-long property crisis continues to ripple across household wealth, local government finances and broader business confidence.
At the same time, parts of China's industrial economy continued to expand rapidly, particularly sectors aligned with Beijing's long-term technology strategy. The statistics bureau said production of industrial robots climbed 25.7% in the first four months of the year, while lithium-ion battery output surged 36% and 3D printing equipment production jumped 50.9%.
That divergence increasingly defines China's economy: strong state-backed manufacturing growth alongside weak private consumption.
External pressures are also beginning to complicate the outlook. Reuters reported that higher global energy costs linked to the Iran conflict are raising input prices for Chinese manufacturers, though stronger exports and China's fuel-pricing controls have helped cushion some of the impact.
Trade data remained one of the few brighter spots in the report.
China's total goods trade rose 14.9% during the first four months of 2026, with exports increasing 11.3% and imports climbing 20%, according to the National Bureau of Statistics. April exports alone rose 9.8% from a year earlier, helping offset softer domestic activity.
