China's economic numbers come in better than expected, but 'difficulties and challenges' remain

cnbc.com:

BEIJING — China released economic data for May that topped muted expectations for a month hampered by Covid controls. Industrial production rose mildly by 0.7% in May from a year ago, versus an expected 0.7% drop, according to analysts polled by Reuters. In April, industrial production unexpectedly fell, down by 2.9% year-on-year. Retail sales fell less than expected, down by 6.7% in May from a year ago. Retail sales were estimated to have declined by 7.1% in May from a year ago, according to the Reuters poll. In April, retail sales fell by 11.1% from a year ago. Fixed asset investment for the January to May period rose by 6.2%, topping expectations of 6% growth.

China's National Bureau of Statistics said in a statement that the economy «showed a good momentum of recovery» in May, «with negative effects from Covid-19 pandemic gradually overcome and major indicators improved marginally.»

«However, we must be aware that the international environment is to be even more complicated and grim, and the domestic economy is still facing difficulties and challenges for recovery,» the bureau said.

China's exports accelerated in May to a better-than-expected 16.9% increase from a year ago in U.S. dollar terms. Imports also rose by a greater-than-expected 4.1%.

Shanghai and Beijing, China's two largest cities by gross domestic product, have both had to reinstate tighter Covid controls this month after persistent spikes in Covid cases.

Shanghai had locked down in April and May, with only some major businesses operating. The city began to fully reopen on June 1.

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