China’s May Economy: Steady Growth, Housing Recovery Signs
China’s national economy maintained steady momentum with innovation-led, high-quality development in May, according to the National Bureau of Statistics (NBS). Official data released on June 16 revealed a mixed picture: robust industrial and trade performance alongside ongoing challenges in fixed-asset investment and retail consumption, while first-tier city housing prices posted month-on-month gains for the fourth consecutive month.
Industrial Production and High-Tech Manufacturing Lead Growth
Value-added industrial output grew 4.5% year-on-year in May, accelerating 0.4 percentage points from April. Equipment manufacturing rose 9.5%, while high-tech manufacturing surged 15.1% year-on-year — more than three times the overall industrial growth rate. Production of 3D printing devices jumped 54.4%, lithium-ion batteries rose 40.0%, and industrial robots increased 27.9%, according to the NBS press release.
“In May, the international environment was complex and volatile, with the spillover effects of Middle East geopolitical conflicts continuing to manifest,” said Fu Linghui, NBS Spokesperson and Chief Economist, as reported by People’s Daily. “All regions and departments effectively implemented more proactive macro policies, actively responded to external challenges, overcame internal difficulties… the national economy continued its overall stable, innovation-oriented, and high-quality development trend.”
The services sector also showed resilience, with the Index of Services Production growing 4.4% year-on-year. Information transmission, software and IT services grew 11.3%, while leasing and business services rose 10.9%.
Foreign Trade Resilience and Employment Stability
China’s foreign trade demonstrated strong resilience in May. Total goods imports and exports reached 4,451.6 billion yuan, up 16.9% year-on-year — accelerating 2.7 percentage points from April. Exports grew 13.8% while imports surged 21.5%, reflecting robust domestic demand and global competitiveness.
Employment remained broadly stable, with the urban surveyed unemployment rate falling to 5.1% in May, down 0.1 percentage points from April. The first-five-months average stood at 5.2%. Consumer prices rose modestly, with CPI up 1.2% year-on-year, unchanged from April, while producer prices (PPI) rose 3.9%.
Housing Market: First-Tier Cities Show Signs of Stabilization
Perhaps the most closely watched data point was the housing market, where first-tier cities recorded month-on-month price increases for new homes for the fourth consecutive month. New home prices in first-tier cities rose 0.2% month-on-month in May, with Shanghai (+0.2%), Guangzhou (+0.2%), and Shenzhen (+0.4%) posting gains, while Beijing edged down 0.2%. First-tier existing home prices rose 0.4% month-on-month, according to Securities Daily via People’s Finance.
Among 70 major cities, 16 saw new home price month-on-month increases, up from 14 in April. While first-tier new home prices remained 1.7% lower year-on-year, the decline narrowed by 0.4 percentage points.
“First-tier city new home sales prices have maintained positive month-on-month growth for four consecutive months, playing a ‘bellwether’ role,” said Yan Yuejin, Deputy Head of Shanghai E-House China R&D Institute, as reported by Securities Daily. “As price adjustments become more adequate and buyer-seller consensus strengthens, the inflection point for second-hand home prices is expected to be confirmed in the coming months.”
Sales volumes also showed improvement. Top 100 developers’ new home sales reached 328.78 billion yuan in May, up 17.6% from April, with the first-half cumulative decline narrowing for the third consecutive month, according to China Daily. Beijing recorded approximately 16,000 second-hand home transactions in May — the highest for that month since 2021 — while Shanghai recorded 28,000 units, a five-year high for May.
“The improvement in price signals, especially the moderation in secondary market declines, indicates that market expectations are slowly improving,” said Chen Wenjing, Director of Policy Research at the China Index Academy, as quoted by China Daily.
Investment and Consumption: Mixed Signals
Fixed-asset investment dropped 4.1% year-on-year in the first five months to 17.85 trillion yuan. Excluding real estate development, investment fell 1.2%. However, investment in intellectual property products grew 9.3%, accelerating 0.4 percentage points from the first four months, and contributed 1.1 percentage points to overall investment growth. High-tech industry investment rose 4.5%, with computer and office equipment manufacturing soaring 18.3% and aerospace manufacturing surging 16.7%, as reported by China Daily/Xinhua.
Retail sales of consumer goods reached 4,109.0 billion yuan in May, down 0.6% year-on-year, reflecting ongoing consumer caution. However, the new aggregate “total retail sales of goods and services” grew 2.8% year-on-year in the first five months, with service retail sales growing 5.4%, indicating a shift toward services consumption.
Outlook and Implications
NBS Spokesperson Fu Linghui struck a cautiously optimistic tone, noting that “China’s economy has a stable foundation, many advantages, strong resilience, and great potential, providing favorable conditions for promoting stable and improved economic development.”
However, the NBS acknowledged that “the domestic imbalance between strong supply and weak demand is acute” and that “some enterprises are facing considerable pressure in their operations.” The 5% annual GDP growth target remains achievable but faces headwinds from external uncertainties and ongoing domestic structural transition.
The property market stabilization, while still uneven and concentrated in first-tier cities, represents one of the strongest signals yet that China’s prolonged housing downturn may be bottoming out. Policy support is expected to continue, with more than 430 property-related policies rolled out nationwide since January, including trade-in programs that have expanded to over 40 cities.
As China’s economy continues its transition from traditional drivers toward innovation-driven growth, the May data suggests that high-tech manufacturing and emerging industries are increasingly filling the gap left by the property sector’s prolonged adjustment.