Next Week in China: 16-20 June 2025

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Major Data Releases:

16 June: China to hold a press conference on national economic performance
16 June: China to report May industrial production level
16 June: China to report May energy production
16 June: China to report May investment in fixed assets (excluding rural households)
16 June: China to report May real estate investments
16 June: China to report May total retail sales (TRS) of consumer goods
16 June: China to report May sales price indexes of commercial residential buildings
16 June: China to report June scale of medium-term lending facility (MLF) operations and interest rate
20 June: China to report June 1-year and 5-year loan prime rates (LPR)

Next week will be a major week for data releases for mainland China with 10 economic data points scheduled.

Regarding retail sales, driven by the Labour Day holiday and trade-in policy, we expect May TRS would log a slightly faster growth rate, reaching 5.5 per cent compared to the previous month’s 5.1 per cent pace. By sector, residents’ travel, dining, and other consumption activities were relatively active over the long holiday. Business activity indices for industries such as railway transportation, air transportation, accommodation, and catering showed significant improvement to remain within the expansion zone. Further, the “618” shopping festival began on 13 May, one week earlier than the 2024 presale launch, creating a positive carryover effect on May sales of consumer goods. High-frequency data indicates that the “618” promotions stimulated enthusiasm for home appliance trade-ins. As of 26 May, the total transaction volume of subsidized goods increased by 283 per cent compared to the 2024 “11-11” shopping festival. For services consumption, the Labour Day holiday was extended to two days while one day of the Dragon Boat Festival fell in May, both contributing to higher May consumption figures for 2025.

For automobiles, the sector may continue to see strong volume but weak prices. In terms of volume, preliminary estimates suggest that May’s total retail market size for passenger vehicles reached approximately 1.85 million units, up 8.5 per cent year-on-year. For prices, discounts expanded after carmakers intensified promotional efforts over the Labour Day Golden Week. The latest research shows that the overall auto market discount rate in mid-May was about 24.8 per cent. For comparison, April’s estimated retail sales of passenger vehicles stood at 1.75 million units, with new energy vehicles accounting for 900,000 units. The overall discount rate in mid-April was approximately 23.7 per cent.

Chinese equities rose week-on-week. As of Thursday, 12 June, the MSCI China Index had increased by 1.23 per cent, the Shanghai Composite Index rose by 0.51 per cent, the Shenzhen Component by 0.5 per cent, and the ChiNext Index by 1.36 per cent. Based on size, small- and mid-cap stocks and large-cap stocks all performed similarly and from a style perspective, value stocks continue to outperform growth stocks. Looking ahead, we are currently in a lull period for top-level economic policy changes, with the next window for policy adjustments not expected until the end of July. Domestic demand still needs improvement and further demand-side measures to counter internal competition and stimulate demand are needed to lift demand prospects. However, the government’s stabilization fund is effectively cushioning downside risks in the capital markets while managing market conditions, providing upward support. Overall, positive factors continue to accumulate in the existing environment but the market as a whole may remain in a short-term consolidation phase, with attention now more focused on structural opportunities.

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.