China's April Consumption Growth Hits Over 3-Year Low as Subsidy Effects Wane
China's retail sales growth in April hit its lowest point since 2023. Analysts attribute the slowdown to the diminishing impact of 'trade-in' subsidy policies, a struggling property market, and consumer caution regarding large purchases due to uncertainty about long-term income. This data highlights the structural issue of weak domestic demand in China's economy.
📋 Article Processing Timeline
- 📰 Published: May 19, 2026 at 11:50
- 🔍 Collected: May 19, 2026 at 12:01 (10 min after Published)
- 🤖 AI Analyzed: May 19, 2026 at 12:08 (6 min after Collected)
Beijing, May 19 (CNA) – China's consumption growth in April hit a new low since 2023. Analysts point out that the pulling effect of the "trade-in" policy for consumer goods has diminished, policy front-loading effects have emerged, and the real estate sector continues to be a drag. Furthermore, public uncertainty about long-term income prospects has made them cautious about large-ticket spending.
China's National Bureau of Statistics announced on the 18th that from January to April, total retail sales of consumer goods increased by 1.9% year-on-year. For April alone, the year-on-year growth was merely 0.2%, the lowest since 2023.
The Economic Observer noted that from the beginning of 2023 to the end of 2025, China's retail sales growth rate, a reflection of consumption, had consistently remained at 2% or higher. However, entering 2026, the year-on-year growth rate has been on a downward slide, from 2.8% in January-February to 0.2% in April.
The report quoted Zhang Lin, deputy dean of the Far East Credit Research Institute, stating that the continuous weakness in automobile consumption is the most direct drag. Secondly, the ongoing slump in the real estate market has suppressed consumption related to housing, such as furniture, home appliances, and building materials, due to a wealth-shrinking effect. The marginal stimulus from policies like "trade-in" has also declined.
Additionally, he stated that the nominal growth rate of residents' disposable income in the first quarter was about 4.9%, a relatively low level. The core reason for the current consumption weakness is more a reflection of uncertainty in long-term earning capacity and income expectations, which makes residents more cautious in their decisions on large purchases.
Caixin also pointed out that retail sales of goods were the main reason for the decline in total retail sales in April, primarily due to the reduced support from the 2026 "trade-in" policy for consumer goods, significant demand being pulled forward, and a higher base from the same period last year. In particular, the impact of the new energy vehicle purchase tax shifting from full exemption to a 50% reduction continued to manifest, with the decline in automobile consumption widening by 3.5 percentage points to 15.3%.
While April's consumption growth hit a new low, national fixed-asset investment from January to April decreased by 1.6% year-on-year. The Economic Observer quoted Zhang Liqun, a researcher at the Macroeconomic Research Department of the Development Research Center of the State Council, who said this indicates that the trend of "strong supply, weak demand" is further developing and must be taken very seriously.
Fu Linghui, a spokesperson for the National Bureau of Statistics, said at a press conference on the 18th that due to factors such as a higher base from the previous year, the growth of retail sales of goods has slowed down. However, when considering both goods and services retail, the trend of stable consumption growth has not changed. A preliminary calculation combining goods and services retail shows a year-on-year growth of 3.2% from January to April, a speed that remains generally stable compared to the first quarter. (Edited by Lu Jia-rong) 1150519
China's National Bureau of Statistics announced on the 18th that from January to April, total retail sales of consumer goods increased by 1.9% year-on-year. For April alone, the year-on-year growth was merely 0.2%, the lowest since 2023.
The Economic Observer noted that from the beginning of 2023 to the end of 2025, China's retail sales growth rate, a reflection of consumption, had consistently remained at 2% or higher. However, entering 2026, the year-on-year growth rate has been on a downward slide, from 2.8% in January-February to 0.2% in April.
The report quoted Zhang Lin, deputy dean of the Far East Credit Research Institute, stating that the continuous weakness in automobile consumption is the most direct drag. Secondly, the ongoing slump in the real estate market has suppressed consumption related to housing, such as furniture, home appliances, and building materials, due to a wealth-shrinking effect. The marginal stimulus from policies like "trade-in" has also declined.
Additionally, he stated that the nominal growth rate of residents' disposable income in the first quarter was about 4.9%, a relatively low level. The core reason for the current consumption weakness is more a reflection of uncertainty in long-term earning capacity and income expectations, which makes residents more cautious in their decisions on large purchases.
Caixin also pointed out that retail sales of goods were the main reason for the decline in total retail sales in April, primarily due to the reduced support from the 2026 "trade-in" policy for consumer goods, significant demand being pulled forward, and a higher base from the same period last year. In particular, the impact of the new energy vehicle purchase tax shifting from full exemption to a 50% reduction continued to manifest, with the decline in automobile consumption widening by 3.5 percentage points to 15.3%.
While April's consumption growth hit a new low, national fixed-asset investment from January to April decreased by 1.6% year-on-year. The Economic Observer quoted Zhang Liqun, a researcher at the Macroeconomic Research Department of the Development Research Center of the State Council, who said this indicates that the trend of "strong supply, weak demand" is further developing and must be taken very seriously.
Fu Linghui, a spokesperson for the National Bureau of Statistics, said at a press conference on the 18th that due to factors such as a higher base from the previous year, the growth of retail sales of goods has slowed down. However, when considering both goods and services retail, the trend of stable consumption growth has not changed. A preliminary calculation combining goods and services retail shows a year-on-year growth of 3.2% from January to April, a speed that remains generally stable compared to the first quarter. (Edited by Lu Jia-rong) 1150519