China’s economic recovery lost momentum in April as key indicators including retail sales, industrial output, and fixed asset investment came in below expectations, highlighting growing pressure on the world’s second-largest economy amid ongoing global uncertainty.
According to data released by China’s National Bureau of Statistics, retail sales, a major indicator of consumer spending increased by just 0.2% in April compared to the same period last year. The figure marked the weakest pace of growth since December 2022 and fell significantly short of economists’ expectations for a 2% increase.
The slowdown also reflected a sharp decline from March, when retail sales had expanded by 1.7%, signaling continued weakness in domestic demand despite policy support efforts from Beijing.
Industrial production growth also weakened during the month. China’s industrial output rose 4.1% year-on-year in April, missing analysts’ forecasts of 5.9% growth and slowing from the 5.7% expansion recorded in March.
Meanwhile, urban fixed asset investment, which includes spending on infrastructure, manufacturing, and real estate contracted by 1.6% during the first four months of 2026. Economists had expected investment growth of 1.6%, making the decline a major disappointment for markets.
The weaker-than-expected economic data comes as geopolitical tensions and the ongoing Iran conflict continue to impact global trade flows, energy prices, and business sentiment worldwide.
Despite the broader slowdown, China’s export sector remained relatively resilient. Exports surged 14.1% in April compared to a year earlier, significantly outperforming forecasts for a 7.9% rise. Analysts said overseas buyers accelerated orders amid concerns that geopolitical instability could further disrupt global supply chains and increase manufacturing costs.
Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, noted that stronger exports helped cushion some of the weakness in domestic demand, although not enough to offset broader economic softness.
Analysts also believe Chinese policymakers may avoid introducing large-scale stimulus measures unless economic conditions deteriorate further in the coming months.
On the labor front, China’s urban unemployment rate improved slightly, easing to 5.2% in April from 5.4% in March, offering a modest sign of stability in the employment market.
The economic data was released shortly after a high-profile meeting between Chinese officials and US President Donald Trump, during which China reportedly agreed to increase purchases of American agricultural products and Boeing aircraft over the next several years.
The two countries also announced plans to establish new trade and investment cooperation mechanisms aimed at improving market access and reducing trade tensions.
According to economists, both Washington and Beijing appear increasingly focused on preventing a deeper economic confrontation, as a full-scale decoupling between the two economies could create substantial financial risks globally.
