China Retail Sales Drop 0.6% for First Time in Over Three Years

China's retail sales declined 0.6% in May 2026, marking the first drop since December 2022, according to the National Bureau of Statistics. Urban fixed-asset investment fell 4.1%, steeper than the expected 2% decline, significantly impacted by a 16.2% drop in real estate inflows. Industrial output rose 4.5% in May, surpassing estimates, but the overall economic outlook remains pressured due to weak consumer demand. The government's response may include policy adjustments to stabilize consumption ahead of second-quarter GDP data releases.