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Chinese President Xi Jinping met Central Asian leaders at a summit in Kazakhstan on Tuesday, his second trip to the region in under a year as Beijing competes with Russia for influence there.The summit in Astana brings together Xi — who arrived in the Kazakh capital on Monday — and the leaders of Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan.Under Russia’s orbit until the fall of the Soviet Union in 1991, the five countries of Central Asia have courted interest from major powers including China and the United States since becoming independent.The region is rich in natural resources and strategically located at the crossroads of Europe and Asia.In a meeting with Kyrgyz President Sadyr Japarov on Tuesday, Xi called for the two countries to “scale up trade and investment and expand cooperation in emerging sectors”, Chinese state news agency Xinhua reported.The two sides should “advance high-quality construction of the China-Kyrgyzstan-Uzbekistan railway and foster new drivers of growth in clean energy, green minerals and artificial intelligence”, Xi reportedly said.In talks with Tajik President Emomali Rahmon, Xi said Beijing “firmly supports Tajikistan in safeguarding its national independence, sovereignty and security”, according to Xinhua.The Chinese leader also held talks with Uzbek President Shavkat Mirziyoyev and Turkmen President Serdar Berdymukhamedov, according to Beijing’s state media.While Central Asian leaders continue to view Russia as a strategic partner, ties with Moscow have loosened since the war in Ukraine.The five nations are taking advantage of the growing interest in their region and coordinating their foreign policies.They regularly hold summits with China and Russia to present the region as a unified bloc and attract investment.High-level “5+1″ format talks have also been organised with the European Union, the United States, Turkey and other Western countries.”The countries of the region are balancing between different centres of power, wanting to protect themselves from excessive dependence on one partner,” Kyrgyz political scientist Nargiza Muratalieva told AFP.- Biggest trade partner -Russia says China’s growing influence in the region does not pose a threat.”There is no reason for such fears. China is our privileged strategic partner, and the countries of Central Asia, naturally, are our natural historical partners,” Kremlin spokesman Dmitry Peskov told reporters on Monday.But China has now established itself as Central Asia’s leading trading partner, far outstripping the EU and Russia.Central Asia is also an important target for China in its Belt and Road initiative — which uses huge infrastructure investments as a political and diplomatic lever.Construction of the Uzbekistan-Kyrgyzstan-China railway and the China-Tajikistan highway, which runs through the Pamir Mountains to Afghanistan, are among the planned investments.New border crossings and “dry ports” have already been built to process trade, such as Khorgos in Kazakhstan, one of the largest logistics hubs in the world.”Neither Russia nor Western institutions are capable of allocating financial resources for infrastructure so quickly and on such a large scale, sometimes bypassing transparent procedures,” said Muratalieva.Kazakhstan said last week that Russia would lead the construction of its first nuclear power plant but that it wanted China to build the second.”Central Asia is rich in natural resources such as oil, gas, uranium, gold and other minerals that the rapidly developing Chinese economy needs,” Muratalieva said.”Ensuring uninterrupted supplies of these resources, bypassing unstable sea routes, is an important goal of Beijing,” the analyst added.- Human rights -China also positions itself as a supporter of the predominantly authoritarian Central Asian leaderships.At the last Central Asia-China summit, Xi called for “resisting external interference” that might provoke “colour revolutions” that could overthrow the current leaders in the region.”Beijing sees the stability of the Central Asian states as a guarantee of the security of its western borders,” Muratalieva said.Central Asia border’s China’s northwestern Xinjiang region, where Beijing is accused of having detained more than a million Uyghurs and other Muslims, part of a campaign the UN has said could constitute “crimes against humanity”.burs-mjw/je/jhb

The Bank of Japan kept interest rates unchanged Tuesday and said it would taper its purchase of government bonds at a slower pace amid concerns about the effect of trade uncertainty on the world’s number four economy.The central bank spent years buying up Japanese Government Bonds (JGBs) to keep yields low as part of an ultra-loose monetary policy aimed at banishing stagnation and harmful deflation.But it began moving away from that programme last year as inflation began to pick up and the yen weakened, and hiked interest rates for the first time since 2007 and began winding down its JGB purchases.It has since then lifted borrowing costs several times to 0.5 percent, their highest level in 17 years, and continued to buy fewer bonds.However, analysts say uncertainty sparked by US President Donald Trump’s trade war has led officials to hold off more hikes, and on Tuesday they held rates again, while saying they would slow the pace of JGB reductions.Purchases will be cut in principle “by about 200 billion yen each calendar quarter from April-June 2026″ — from around 400 billion yen ($2.8 billion) per quarter.Carol Kong, an analyst at the Commonwealth Bank of Australia outlined the possible reasons for the decision ahead of the release of the BoJ policy statement.”Slowing the bond taper will help keep interest rates lower than otherwise, providing support to the economy amid heightened trade uncertainty,” she told AFP.Speculation of such a move “intensified after a surge in the ‘super long’ Japanese Government Bond (JGB) yields in recent months”, Kong added.The yen weakened on Tuesday, with the dollar buying 144.80 yen around midday, compared with around 144.30 yen on Monday, with the BoJ’s main rate much lower than the US Federal Reserve’s 4.25-4.5 percent.”The recent softening of the yen could already partly reflect expectations for a cautious policy update from the BoJ… alongside negative spillovers for Japan from the Middle East conflict,” Lee Hardman of MUFG had said before the decision.- Next rate hike? -The BoJ also highlighted the risks ahead for the economy, saying “growth is likely to moderate, as trade and other policies in each jurisdiction lead to a slowdown in overseas economies and to a decline in domestic corporate profits and other factors”.However, “factors such as accommodative financial conditions are expected to provide support”, it added.Kong added that the bank “will likely hold off on rate hikes until there is further clarity on US trade policy”.Japan, a key US ally and its biggest investor, is subject to the same 10 percent baseline tariffs imposed on most nations plus steeper levies on cars, steel and aluminium.Trump also announced an additional 24 percent “reciprocal” tariff on the country’s goods in early April but later paused it along with similar measures on other trading partners.Prime Minister Shigeru Ishiba said Monday there had been no breakthrough on a trade deal after talks with Trump on the sidelines of the G7 summit in Canada.”We still believe the Bank may hike rates in the second half of the year as it remains committed to normalising monetary policy,” said Katsutoshi Inadome of SuMi TRUST.”We expect that domestic demand will remain solid and that there is a chance economic conditions will improve to the point where the BoJ can consider interest hikes,” he said.

Oil prices rallied Tuesday after Donald Trump urged Tehran residents to evacuate, stoking fresh fears of all-out war as Israel and Iran continued to pound each other with missiles.Hopes that the deadly conflict can be contained helped most equities rise, while the US president’s earlier claim that the Islamic republic wanted to make a nuclear deal also provided a little optimism.After Friday’s surge sparked by Israel’s attacks on its regional foe, crude ticked more than one percent lower Monday as traders bet that the battle would not spread throughout the Middle East and key oil sites were mostly left untouched.But prices edged back up after Trump took to social media calling for the evacuation of the Iranian capital, which is home to nearly 10 million people.”Iran should have signed the ‘deal’ I told them to sign,” he said, referring to nuclear talks that were taking place. “What a shame, and waste of human life. Simply stated, IRAN CAN NOT HAVE A NUCLEAR WEAPON. I said it over and over again! Everyone should immediately evacuate Tehran!”Oil prices spiked around two percent Tuesday before paring some of those gains, but the comments kept investors on edge amid warnings that an escalation of the crisis could send the commodity soaring again.Meanwhile, the aircraft carrier USS Nimitz left Southeast Asia on Monday after cancelling a Vietnam visit, with the Pentagon announcing it was sending “additional capabilities” to the Middle East.Prime Minister Benjamin Netanyahu insisted Israel’s campaign was “changing the face of the Middle East”.Trump has maintained that Washington has “nothing to do” with its ally’s campaign, but Iran’s foreign minister said Monday that the US leader could halt the attacks with “one phone call”.Traders had been a little more upbeat after the US president — who is in Canada for the G7 summit — had said Iran wanted to make a deal, saying “as soon as I leave here, we’re going to be doing something”. He later left the gathering in the Rockies, telling reporters: “I have to be back as soon as I can. I wish I could stay for tomorrow, but they understand, this is big stuff.”Tehran had signalled a desire to de-escalate and resume nuclear talks with Washington as the United States did not join conflict, according to the Wall Street Journal. Stocks mostly rose in Asian trade, with Tokyo, Sydney, Seoul, Singapore and Taipei leading gains, though Shanghai and Hong Kong struggled.”Risk assets are enjoying a positive start to the new week amid signs the Israel-Iran war remains limited to the two countries without signs of a possible escalation into a wider conflict,” said Rodrigo Catril at National Australia Bank.”Iran is reportedly seeking de-escalation talks, but Israel is not showing signs of slowing down.”The gains followed a positive lead from Wall Street, where traders are keeping tabs on the G7 summit world leaders pushed back against Trump’s trade war, arguing it posed a risk to global economic stability.Leaders from Britain, Canada, Italy, Japan, Germany and France called on the president to reverse course on his plans to impose even steeper tariffs on countries across the globe next month.Also in view are central bank decisions this week, with the Bank of Japan due to make its latest decision on interest rates later in the day.Officials are expected to hold interest rates steady but tweak their bond purchase policy.- Key figures at around 0230 GMT -West Texas Intermediate: UP 1.6 percent at $72.94 per barrelBrent North Sea Crude: UP 1.4 percent at $74.25 per barrelTokyo – Nikkei 225: UP 0.5 percent at 38,501.08 (break)Hong Kong – Hang Seng Index: DOWN 0.1 percent at 24,038.68Shanghai – Composite: DOWN 0.1 percent at 3,385.61Euro/dollar: DOWN at $1.1552 from $1.1562 on MondayPound/dollar: DOWN at $1.3569 from $1.3579Dollar/yen: UP at 144.92 yen from 144.79 yenEuro/pound: UP at 85.14 pence from 85.12 penceNew York – Dow: UP 0.8 percent at 42,515.09 (close)London – FTSE 100: UP 0.3 percent at 8,875.22 (close)

The yen fell against the dollar ahead of a Bank of Japan decision Tuesday, with officials expected to hold interest rates steady but tweak their bond purchase policy.The central bank last year said it would scale down its huge purchases of government bonds — part of attempts to move away from a quantitative easing programme designed to banish stagnation and harmful deflation.It is now considering slowing the pace of these cutbacks, analysts and media reports said.”Slowing the bond taper will help keep interest rates lower than otherwise, providing support to the economy amid heightened trade uncertainty,” Carol Kong, an analyst at the Commonwealth Bank of Australia, told AFP.Speculation of such a move “intensified after a surge in the ‘super long’ Japanese Government Bond (JGB) yields in recent months”, she explained.The dollar surged higher than 145 yen in morning trade, compared with levels of around 144.30 yen on Monday.”The recent softening of the yen could already partly reflect expectations for a cautious policy update from the BoJ… alongside negative spill-overs for Japan from the Middle East conflict,” said Lee Hardman of MUFG.The BoJ is expected to keep its main interest rate around 0.5 percent, lower than the US Federal Reserve’s 4.25-4.5 percent.Bank officials began lifting borrowing costs last year after nearly two decades of ultra-loose monetary policies aimed at kick-starting torpid economic growth in Japan.”The BoJ will likely hold off on rate hikes until there is further clarity on US trade policy,” Kong said.Japan, a key US ally and its biggest investor, is subject to the same 10 percent baseline tariffs imposed on most nations plus steeper levies on cars, steel and aluminium.Trump also announced an additional 24 percent “reciprocal” tariff on Japan in early April but later paused it along with similar measures on other countries.Prime Minister Shigeru Ishiba said Monday there had been no breakthrough on a US trade deal after talks with President Donald Trump on the sidelines of the G7 summit in Canada.”We still believe the Bank may hike rates in the second half of the year as it remains committed to normalising monetary policy,” said Katsutoshi Inadome of SuMi TRUST.”We expect that domestic demand will remain solid and that there is a chance economic conditions will improve to the point where the BoJ can consider interest hikes,” he said.

Stocks rose and oil prices retreated Monday as fears of a wider Middle East conflict eased even as Israel and Iran pounded each other with missiles for a fourth day.The dollar dipped against the euro and pound, while safe-haven gold declined slightly.”As things stand, investors seem less fearful than they were going into the weekend of the possibility that the war between Israel and Iran spreads across the Middle East, and beyond,” said David Morrison, senior market analyst at financial services provider Trade Nation.”It appears that most of the Israeli airstrikes and missile launches avoided the most significant parts of Iran’s energy infrastructure. And so far Iran’s retaliation has done relatively little damage,” he added.Wall Street’s main stock indices pushed higher, with the broad-based S&P 500 finishing up nearly one percent after spending the entire day in positive territory.In Europe, London, Paris and Frankfurt all closed the day with gains.They tracked gains in Asia, where Tokyo closed up 1.3 percent, boosted by a weaker yen, while Hong Kong and Shanghai also advanced.Israel’s surprise strike against Iranian military and nuclear sites on Friday — killing top commanders and scientists — sent crude prices soaring as much as 13 percent at one point on fears about supplies from the region.However, concerns over the conflict spreading appeared to have receded, with both main oil contracts declining on Monday.”Unpleasant as it is to watch two sides trade missiles on a sustained basis, so long as the Straits of Hormuz remain quiescent it is hard to envisage a scenario where Friday’s gains can be sustained,” said Chris Beauchamp, chief market analyst at online trading platform IG.Analysts said the recent decision by the OPEC+ group of crude producing nations, led by Saudi Arabia and Russia, to raise output again in July also played a role.”There may need to be a major escalation in the conflict before we get another sharp upswing in oil and gold prices,” said Kathleen Brooks, research director at trading group XTB.Investors were gearing up for monetary policy decisions this week from the US Federal Reserve, Bank of England and Bank of Japan.All are expected to hold steady but traders will be keeping a close watch on their statements for clues on interest-rate outlooks, with US officials under pressure from President Donald Trump to cut borrowing costs.Also in focus is the G7 summit in the Canadian Rockies, which kicked off Sunday, where the Middle East crisis will be discussed along with trade after Trump’s tariff blitz.In corporate news, shares in Nippon Steel rose more than three percent in Tokyo after Trump on Friday signed an executive order approving its $14.9 billion merger with US Steel, bringing an end to the long-running saga. US Steel advanced 5.1 percent.Shares in Gucci owner Kering climbed almost 12 percent in Parison reports that the outgoing boss of French automaker Renault would take over as chief executive of the struggling luxury group.Kering announced the appointment after European markets closed.Renault shares slumped 8.7 percent, following its announcement on Sunday that Luca de Meo would step down in July. – Key figures at around 2030 GMT -New York – Dow: UP 0.8 percent at 42,515.09 (close)New York – S&P 500: UP 0.9 percent at 6,033.11 (close)New York – Nasdaq: UP 1.5 percent at 19,701.21 (close)London – FTSE 100: UP 0.3 percent at 8,875.22 (close)Paris – CAC 40: UP 0.8 percent at 7,742.24 (close)Frankfurt – DAX: UP 0.8 percent at 23,699.12 (close)Tokyo – Nikkei 225: UP 1.3 percent at 38,311.33 (close)Hong Kong – Hang Seng Index: UP 0.7 percent at 24,060.99 (close)Shanghai – Composite: UP 0.4 percent at 3,388.73 (close)Euro/dollar: UP at $1.1562 from $1.1549 on FridayPound/dollar: UP at $1.3579 from $1.3571Dollar/yen: UP at 144.79 yen from 144.07 yenEuro/pound: UP at 85.12 pence from 85.10 penceWest Texas Intermediate: DOWN 1.7 percent at $71.77 per barrelBrent North Sea Crude: DOWN 1.4 percent at $73.23 per barrelburs-jmb/des

Stocks rose and oil prices retreated Monday as fears of a wider Middle East conflict eased even as Israel and Iran pounded each other with missiles for a fourth day.The dollar and safe-haven gold declined slightly.”As things stand, investors seem less fearful than they were going into the weekend of the possibility that the war between Israel and Iran spreads across the Middle East, and beyond,” said David Morrison, senior market analyst at financial services provider Trade Nation.”It appears that most of the Israeli airstrikes and missile launches avoided the most significant parts of Iran’s energy infrastructure. And so far Iran’s retaliation has done relatively little damage,” he added.Wall Street opened in the green, with the tech-heavy Nasdaq up around one percent in early deals, while London, Paris and Frankfurt were all higher in afternoon trading.That tracked gains in Asia, where Tokyo closed up 1.3 percent, boosted by a weaker yen, while Hong Kong and Shanghai also advanced.Israel’s surprise strike against Iranian military and nuclear sites on Friday — killing top commanders and scientists — sent crude prices soaring as much as 13 percent at one point on fears about supplies from the region.However, concerns over the conflict spreading appeared to have eased, with both main oil contracts retreating by more than one percent on Monday.Analysts said the recent decision by the OPEC+ group of crude producing nations, led by Saudi Arabia and Russia, to raise output again in July also played a role.”Financial markets are very good at absorbing geopolitical risk, and OPEC+’s supply boost is also helping to cushion the blow,” said Kathleen Brooks, research director at trading group XTB.”There may need to be a major escalation in the conflict before we get another sharp upswing in oil and gold prices,” she added.Analysts had warned that the spike could send inflation surging globally again, dealing a blow to long-running efforts by governments and central banks to get it under control.Investors were gearing up for monetary policy decisions this week from the US Federal Reserve, Bank of England and Bank of Japan.All are expected to stand pat but traders will be keeping a close watch on their statements for clues on interest-rate outlooks, with US officials under pressure from President Donald Trump to cut borrowing costs.There was little major reaction to data showing China’s factory output grew slower than expected last month as trade war pressures bit, while retail sales topped forecasts.Also in focus is the G7 summit in the Canadian Rockies, which kicked off Sunday, where the Middle East crisis will be discussed along with trade after Trump’s tariff blitz.In corporate news, shares in Nippon Steel rose more than three percent in Tokyo after Trump on Friday signed an executive order approving its $14.9 billion merger with US Steel, bringing an end to the long-running saga. Shares in Gucci owner Kering climbed over 11 percent in Paris on reports that the outgoing boss of French automaker Renault would take over as chief executive of the struggling luxury group.Renault shares shed almost eight percent percent, following its announcement on Sunday that Luca de Meo would step down in July. – Key figures at around 1340 GMT -West Texas Intermediate: DOWN 1.4 percent at $71.96 per barrelBrent North Sea Crude: DOWN 1.3 percent at $73.29 per barrelNew York – Dow: UP 0.6 percent at 42,458.20 pointsNew York – S&P 500: UP 0.8 percent at 6,022.67New York – Nasdaq: UP 1.0 percent at 19,593.77London – FTSE 100: UP 0.3 percent at 8,876.07 Paris – CAC 40: UP 0.6 percent at 7,728.56Frankfurt – DAX: UP 0.2 percent at 23,565.34Tokyo – Nikkei 225: UP 1.3 percent at 38,311.33 (close)Hong Kong – Hang Seng Index: UP 0.7 percent at 24,060.99 (close)Shanghai – Composite: UP 0.4 percent at 3,388.73 (close)Euro/dollar: UP at $1.1595 from $1.1540 on FridayPound/dollar: UP at $1.3601 from $1.3560Dollar/yen: DOWN at 143.88 yen from 144.04 yenEuro/pound: UP at 85.22 pence from 85.11 pence

Stocks rose and oil prices pulled back on Monday as fears of a wider Middle East conflict eased even as Israel and Iran pounded each other with missiles for a fourth day.The dollar and safe-haven gold declined slightly. “European shares were surprisingly resilient against a backdrop of uncertainty,” said Russ Mould, investment director at AJ Bell.”The Middle East conflict remains a fluid situation and there is the potential for markets to still experience sudden jolts if the tension escalates further,” he cautioned.London, Paris and Frankfurt stock markets were all higher in midday trade. That tracked gains in Asia, where Tokyo closed up 1.3 percent, boosted by a weaker yen, while Hong Kong and Shanghai also advanced.Israel’s surprise strike against Iranian military and nuclear sites on Friday — killing top commanders and scientists — sent crude prices soaring as much as 13 percent at one point on fears about supplies from the region.However, concerns over the conflict spreading appeared to have eased, with both main oil contracts retreating Monday.”Financial markets are very good at absorbing geopolitical risk, and OPEC+’s supply boost is also helping to cushion the blow,” said Kathleen Brooks, research director at trading group XTB.”There may need to be a major escalation in the conflict before we get another sharp upswing in oil and gold prices,” she added.Analysts had warned that the spike could send inflation surging globally again, dealing a blow to long-running efforts by governments and central banks to get it under control.Investors were gearing up for monetary policy decisions this week from the US Federal Reserve, Bank of England and Bank of Japan.All are expected to stand pat but traders will be keeping a close watch on their statements for clues on interest-rate outlooks, with US officials under pressure from President Donald Trump to cut.There was little major reaction to data showing China’s factory output grew slower than expected last month as trade war pressures bit, while retail sales topped forecasts.Also in focus is the Group of Seven summit in the Canadian Rockies, which kicked off Sunday, where the Middle East crisis will be discussed along with trade after Trump’s tariff blitz.In corporate news, shares in Nippon Steel rose more than three percent in Tokyo after Trump on Friday signed an executive order approving its $14.9 billion merger with US Steel, bringing an end to the long-running saga. In London, betting company Entain surged 12 percent after it raised the annual revenue forecast for its US-based joint venture, BetMGM. Shares in Gucci owner Kering climbed over nine percent in Paris on reports that the outgoing boss of French automaker Renault would take over as chief executive of the struggling luxury group.Renault shares shed around seven percent, following its announcement Sunday that Luca de Meo would step down in July. – Key figures at around 1100 GMT -West Texas Intermediate: DOWN 1.5 percent at $71.87 per barrelBrent North Sea Crude: DOWN 1.3 percent at $73.27 per barrelLondon – FTSE 100: UP 0.6 percent at 8,900.54 pointsParis – CAC 40: UP 0.8 percent at 7,746.77 Frankfurt – DAX: UP 0.4 percent at 23,620.11Tokyo – Nikkei 225: UP 1.3 percent at 38,311.33 (close)Hong Kong – Hang Seng Index: UP 0.7 percent at 24,060.99 (close)Shanghai – Composite: UP 0.4 percent at 3,388.73 (close)New York – Dow:  DOWN 1.8 percent at 42,197.79 (close)Euro/dollar: UP at $1.1577 from $1.1540 on FridayPound/dollar: UP at $1.3578 from $1.3560Dollar/yen: UP at 144.05 yen from 144.04 yenEuro/pound: UP at 85.27 pence from 85.11 pence

Nepal said Monday it has begun regular commercial electricity exports to Bangladesh, marking its entry into the international power market beyond neighbouring India.The landlocked Himalayan nation started transmitting 40 megawatts (MW) of electricity to Bangladesh via India on Sunday under a five-year agreement.”Nepal will continue supplying electricity to Bangladesh during the monsoon season from mid-June to mid-November,” Rajan Dhakal, spokesperson at Nepal Electricity Authority, told AFP.In October, the country signed a tripartite power export deal with the Bangladesh Power Development Board and India’s NTPC Vidyut Vyapar Nigam, which is facilitating access to the transmission line. The following month, the line was opened for only one day.”This is just the beginning of Nepal’s journey as an energy exporter,” Nepal’s energy minister Dipak Khadka said.”This highlights our energy surplus and commitment to regional energy security,” he posted on X Sunday.Four in five Nepalis did not have access to electricity at the turn of the century, according to the International Energy Agency, but a dam-building spree has since helped connect nearly all its 30 million people to the grid.The country now boasts an installed electricity capacity of more than 3,500 MW, with more power than it can currently consume during the rainy season.Nepal first began exporting electricity to India on a smaller scale in late 2021.Exporting power to Bangladesh comes as the country struggles with energy insecurity. With an electricity grid heavily reliant on fossil fuels, it has faced severe power outages over the past year.Some studies estimate that water-rich Nepal could have a total potential capacity of 72,000 MW, which is about 20 times the size of the current installed capacity.However, conservationists have criticised Nepal’s rush to develop its hydro potential, saying that environmental compliance safeguards are sometimes ignored.

Growth in China’s factory output hit a six-month low last month as trade war pressures bit, official data showed Monday, while a bump in a key gauge of domestic consumption offered a rare bright spot for the economy.The United States and China this month agreed to a temporary truce in a standoff that saw tariffs hiked to eye-watering levels and upended global supply chains.But the impact of the row was highlighted by official figures showing industrial production rose just 5.8 percent last month, below the 6.0 percent predicted in a Bloomberg survey and its slowest pace since November. It was also below a forecast-beating 6.1 percent in April, according to the data published by the National Bureau of Statistics (NBS).”Weaker external demand was partly to blame,” Zichun Huang, China Economist at Capital Economics said in note. “Despite the tariff truce, the contraction in industrial sales for export appears to have deepened last month.”However, retail sales  — a key gauge of consumer demand — grew 6.4 percent year-on-year in May, the fastest since December 2023, according to the NBS.This topped the 4.9 percent forecast in the Bloomberg survey and was sharply up from April’s 5.1 percent increase.”It’s an encouraging sign of recovery, as policy support efforts filter through the economy,” Lynn Song, Chief Economist for Greater China at ING, said.”However, a more sustainable consumption recovery will likely require a turnaround of consumer confidence, which remains much closer to historical lows than historical averages,” he added.And Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, wrote in a note that the retail sales figures “came as a surprise” — pointing to the possible impact of a government trade-in programme for consumer goods.The NBS said the world’s number two economy “maintained stability” last month as authorities “stepped up the implementation of more proactive and effective macro policies”.But it added that “there are still many unstable and uncertain external factors, and the internal momentum for expanding domestic demand needs to be further strengthened”.Beijing has struggled to sustain strong growth since the pandemic, grappling with deep-seated problems at home including a persistent slump in domestic consumption and a debt crisis in the property sector.Commercial property prices in a representative group of 70 cities fell month-on-month in May, reflecting continued consumer caution, the NBS said.The surveyed unemployment rate — another closely watched figure as millions of young people struggle to find suitable work — edged down to five percent in May from 5.1 percent the previous month, the bureau said.China is targeting economic growth of around five percent this year.But the picture has been complicated by trade tensions with Washington that erupted in a gruelling tit-for-tat tariff war after US President Donald Trump took office in January.The two sides have since agreed a pause on retaliatory levies but have not yet announced a lasting deal.

China’s factory output grew slower than expected last month as trade war pressures bit, official data showed Monday, while a bump in a key gauge of domestic consumption offered a rare bright spot for the economy.The United States and China this month agreed to a temporary truce in a blistering trade war that saw tariffs hiked to eye-watering levels and upended global supply chains.And the impact of the standoff was highlighted Monday as a report showed industrial production grew just 5.8 percent last month, below the 6.0 percent predicted in a survey of economists by Bloomberg.That was below a forecast-beating 6.1 percent in April, according to the data published by the National Bureau of Statistics (NBS).”Weaker external demand was partly to blame,” Zichun Huang, China Economist at Capital Economics said in note.”Despite the tariff truce, the contraction in industrial sales for export appears to have deepened last month.”However, retail sales  — a key gauge of consumer demand — grew 6.4 percent year-on-year in May, according to the NBS, topping the 4.9 percent forecast in the Bloomberg survey and sharply up from April’s 5.1 percent increase.Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, wrote in a note that the retail sales figures “came as a surprise” — pointing to the possible impact of a government trade-in programme for consumer goods.The NBS said the world’s number two economy “maintained stability” last month as authorities “stepped up the implementation of more proactive and effective macro policies”.But it added that “there are still many unstable and uncertain external factors, and the internal momentum for expanding domestic demand needs to be further strengthened”.Beijing has struggled to sustain strong growth since the pandemic, grappling with deep-seated problems at home including a persistent slump in domestic consumption and a debt crisis in the property sector.Commercial property prices in a representative group of 70 cities fell month-on-month in May, reflecting continued consumer caution, the NBS said.The surveyed unemployment rate — another closely watched figure as millions of young people struggle to find suitable work — edged down to five percent in May from 5.1 percent the previous month, the bureau said.China is targeting economic growth of around five percent this year.But the picture has been complicated by trade tensions with Washington that erupted in a gruelling tit-for-tat tariff war after US President Donald Trump took office in January.The two sides have since agreed a pause on retaliatory levies but have not yet announced a lasting deal.