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Investing.com-- Chinese industrial production grew slightly less than expected in May as high U.S. trade tariffs dented overseas orders and weighed on domestic output.
But other data showed Chinese retail sales blew past expectations in May on support from holiday spending and local shopping events, which helped offset broader weakness in consumer spending.
Industrial production grew 5.8% year-on-year in May, government data showed on Monday. The reading was just below expectations of 5.9% and fell from the 6.1% rise seen in the prior month.
The softer industrial production print was driven largely by weaker overseas orders, as export demand to the U.S. was dented by high trade tariffs. This was in part offset by robust demand in other destinations, while U.S. demand also improved after Washington and Beijing agreed to temporarily lower their trade tariffs on each other.
Chinese retail sales were a standout metric in May, rising 6.4% y-o-y and blowing past expectations of 5%. The strong print was driven largely the May day holiday, as well as increased consumer spending on ecommerce shopping events held by majors such as Alibaba (NYSE:BABA) and JD.com.
Government subsidies on electronic items also helped spur increased spending.
The retail sales figure helped inspire some hope that Chinese consumer spending was recovering- a trend that could help offset a persistent deflationary trend in the country.
Other data released on Monday still presented a mixed picture for the Chinese economy. Fixed asset investment, which represents capital spending by local businesses, rose 3.7% in May, missing expectations of 4%.
But China’s unemployment rate unexpectedly improved to 5% from 5.1% in the prior month.
China is still grappling with relatively high U.S. trade tariffs, although the two countries were seen making more progress in their trade negotiations last week. But they are yet to announce a permanent trade deal.