"Next week in China" fra Lundgreen's Capital

Major Data Releases:

• 16 June: China to hold press conference on national economic performance
• 16 June: China to hold a seminar hosted by the China Academy of Information and Communication Technology (CAICT) and launch the High-Quality Token Service Capability Climbing Plan
• 16 June: China to report May industrial production
• 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 sales
• 16 June: China to report May total retail sales (TRS) of consumer goods
• 16 June: China to report May home prices

The middle of June will bring another heavy week of China data releases. Markets in Hong Kong, Taiwan, and Mainland China will be closed on Friday, 19 June, for the Dragon Boat festival holiday.  

For retail sales, we expect May growth to rebound to 1.1 per cent year-on-year from 0.2 per cent previously. Offline consumption improved modestly in May, with holiday spending supporting catering, tourism, and travel-related demand. Data from the Ministry of Culture and Tourism show domestic tourist trips reached 325 million during the May holiday, up 3.6 per cent year-on-year. Auto sales, however, remained the main drag: narrow passenger vehicle sales reached around 1.52 million units in May, down 17.8 per cent year-on-year. Post-property-cycle consumption and durable goods demand also remained soft, limiting TRS recovery. Further, new orders under the May manufacturing PMI stood at 49.9, suggesting that goods demand had yet to strengthen meaningfully.

On fixed asset investment, we expect activity to remain weak in January-May at a 2.3 per cent annualized decline, though the rollout of RMB 800 billion (USD 118 billion) in policy-based financial instruments is worth monitoring. By sector, we expect infrastructure investment to grow by 2.3 per cent year-on-year, manufacturing investment by 0.2 per cent, and real estate development investment to fall by 14.6 per cent. Looking ahead, fixed asset investment still has scope to stabilise and reverse its decline over the full year. This is supported by potential spillovers from higher capital goods prices to corporate capex, the expected rollout of policy-based financial instruments in the second half, improving profits among industrial firms, new project demand from the “six major networks” investment framework, and a lower base during the second half of 2025.

Besides the major data releases, the CAICT seminar also warrants attention. China’s average daily token calls – the unit of measure of AI chatbot usage – had risen to more than 140 trillion as of March 2026, a thousandfold increase from 100 billion tokens at the beginning of 2024 and over 40 per cent higher from end-2025. Token consumption has expanded rapidly but supply has not kept pace with demand, particularly amid the rise of AI agents. Any plans or standards discussed at the seminar will therefore be worth monitoring.

Chinese equities weakened over the past week. As of Thursday, 11 June, the MSCI China Index was down 2.80 per cent while the Shanghai Composite declined by 1.01 per cent. The Shenzhen Component and ChiNext indices also fell by 3.02 per cent and 3.71 per cent, respectively. Large-cap stocks continued to slightly outperform their small- and mid-cap peers, while value modestly outpaced growth. Looking ahead, World Cup-related viewing demand and time zone differences may create new short-term consumption indicators, including late-night dining, hotel audio-visual rooms, food deliveries, and early-morning tea and coffee orders. Over the longer term, the structural rally appears to be approaching an elevated range, while room for a broad-based uptrend has yet to fully open. June to July may represent a window for rapid adjustment. The market remains in a phase where earnings visibility and fundamental certainty matter more than valuation elasticity, although a broader upside may emerge later.

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.

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