China's industrial output beats forecasts in June; retail sales rebound

China's economy showed signs of recovery in June, with industrial production exceeding forecasts and retail sales rebounding, though the persistent real estate crisis continues to weigh on investment. Official data released on July 15, 2026, revealed that industrial output rose by 5.3% year-on-year, a significant jump from previous expectations and an improvement from earlier figures.

The National Bureau of Statistics reported that the manufacturing sector saw a 6% increase in production, while electricity, heating, gas, and water supply surged by 7.4%. However, the mining sector experienced a 2.2% decline. For the first half of the year, industrial production grew by 5.4% compared to the same period in 2025.

Consumer spending also showed positive momentum. Retail sales, a key indicator of domestic demand, grew by 1% in June, bouncing back from a 0.6% contraction in May, the first since 2022. This figure surpassed expert predictions, which had anticipated only a marginal 0.1% increase. The urban unemployment rate also saw a slight decrease, falling to 5% from 5.1%.

Despite these positive trends, the crisis in the property sector continues to cast a shadow. Investment in fixed assets contracted further, declining by 5.7% in the first half of the year, an acceleration from the 3.8% drop seen in the first five months. Real estate investment alone plummeted by 18% during the January-June period. Investment in manufacturing and infrastructure also turned negative, falling by 1.2% and 2.4% respectively in the first half.