Next Week in China: 11-15 May 2026

Major Data Releases:

• 11 May: China to report April Consumer Price Index (CPI)
• 11 May: China to report April Producer Price Index (PPI)
• 14 May: China to report April M0, M1, and M2 money supply growth rates
• 14 May: China to report April total social financing (TSF)
• 14 May: China to report April new renminbi loans
• 15 May: China to report April total social electricity consumption
• 15 May: Hong Kong to report revised GDP figures for Q1 2026

The pace of key macroeconomic data releases will pick up for China markets following the Labour Day holiday, with April prices and credit indicators due next week.

For CPI, we expect April’s reading to be broadly flat to slightly lower at 0.8 per cent year-on-year. On food, supply pressure likely remained elevated but should ease thereafter; the trough for pork prices may have occurred in April when it declined by 28.5 per cent. With warmer weather and ample supply, the increase in fresh vegetable prices will likely moderate. For energy costs, international oil prices remained elevated and volatile. Domestic retail gasoline and diesel prices were adjusted up initially and then lowered, with the monthly average price up 9.2 per cent month-on-month, while the annualised change rose to 17.7 per cent in April from 7.1 per cent. Core inflation is expected to remain broadly stable: high oil prices may gradually pass through and lift prices of industrial consumer goods, the uptick in gold prices has eased, and services inflation (including tourism) may soften marginally.

On producer prices, we expect April’s year-on-year print to extend its recovery at 1.7 per cent. Within the manufacturing PMI reading, both the output price and the major raw materials purchase price indices edged down slightly but remained at clearly elevated levels, suggesting that the reflation momentum is intact. Since beginning 2026, the global AI investment cycle has driven rapid price gains in chips and other electronic components while ongoing domestic efforts to curb “involution-style” competition have provided support to coal, steel and other upstream prices. In addition, as international commodity-price transmission continues, catch-up price increases in midstream products are becoming more visible, which may intensify the interplay between a mid-to-downstream cost ceiling and a demand floor. Overall, favourable base effects alongside imported-inflation pass-through should allow April PPI to sustain a largely passive rebound.

Bill rates fell sharply in end-April, and banks’ reliance on bill discounting to fill loan shortfalls suggests that underlying credit conditions in China remain weak. We estimate new credit in April at RMB 300 billion (USD 44 billion), with a modest increase year-on-year. Corporate credit was broadly flat year-on-year: infrastructure investment has gradually weakened, real estate investment growth remains slow, and issuances of special refinancing bonds have been steady. Household credit rebounded notably versus March but is weaker from a year ago: offline consumption in April met expectations, with high-frequency indicators for travel, dining, and services consumption stronger than seasonal patterns though domestic auto consumption growth eased. Property sales have improved at the margin but remain uneven.

Equity market performance recovered over the past week. As of Thursday, 7 May, the MSCI China Index was up 3.72 per cent while the Shanghai Composite rose by 1.65 per cent. The Shenzhen Component and ChiNext indices outperformed, gaining 3.54 per cent and 4.24 per cent, respectively. Small and mid-caps outperformed large-cap peers, while growth stocks were slightly ahead of value.

Looking ahead, the earnings-driven underpinning of this rally remains unchanged; however, after the rapid near-term rebound in sentiment, the market may enter a period of consolidation and range-bound trading. Domestically, there appears to be limited room for further valuation expansion and positioning has become relatively crowded. Externally, Middle East tensions may see renewed flare-ups while expectations for US Fed easing have cooled. Style-wise, the medium-term strategy favouring large-cap growth remains intact, but a short-term fluctuation is likely.

This piece has been co-produced with Yiyi Capital Limited in Hong Kong, a China specialist and a part of a global financial services group.