China’s Consumer Spending Slumps as Economic Imbalance Deepens

China’s retail sales, a measure of consumption, fall for the first time in three years.

A man checks purchased goods in a cart outside a supermarket in Beijing on May 11, 2026. Wang Zhao / AFP via Getty Images

China has reported worse-than-expected consumption and investment data, highlighting a deepening economic imbalance that has fueled tensions with its major trading partners.

Retail sales, a key indicator of consumer activity, dropped 0.6 percent in May compared to a year earlier, figures from China’s National Bureau of Statistics showed on Tuesday. To note, official data from Chinese Communist Party (CCP) sources often conceals unfavorable situations for the regime, and the actual data may be even worse.