China in May 2026: the most important developments in economy
China's economy in May 2026 was shaped by President Donald Trump's visit to Beijing and his summit with Xi Jinping, held around 14 and 15 May. Nvidia's Jensen Huang, Tesla's Elon Musk and Apple's Tim Cook travelled with Trump. The two sides discussed trade deals, farm goods and chip controls, and Xi told US executives that China would open its markets wider. Afterwards China and the US agreed to lower tariffs on some goods, and the White House said China was buying US agricultural products. China confirmed an order for 200 Boeing aircraft, fewer than the 500 that had been sought, and the trade truce was extended. The two countries also agreed on an intergovernmental dialogue on artificial intelligence.
The domestic picture was mixed. Exports rose 14% in April, and factory-gate inflation reached its highest level since the pandemic. Yet the economy slowed sharply in April, with retail sales growing at the weakest pace since COVID, and the government announced an action plan on employment. On 26 May China cut its key policy loan rate to a record low. Authorities also cracked down on unauthorised cross-border securities trading. A coal mine disaster in Shanxi killed 82 people, China's worst in 17 years, and coking coal prices rose. Oil and energy flows were disrupted by the war in the Middle East and the closure of shipping through Hormuz.
Trade tensions with Europe grew late in the month. On 28 May the European Union fined Temu 200 million euros for failing to prevent sales of illegal products. China then threatened retaliation over new EU trade restrictions and delayed Airbus deliveries, while the two sides discussed setting up a trade and investment consultation mechanism.
On technology, Huawei announced plans to produce chips equivalent to 1.4 nanometres by 2031 despite US sanctions, and China's state-backed chip fund was reported to be in talks to lead a funding round for the AI start-up DeepSeek. China launched the Shenzhou-23 crewed mission on 24 May, with Hong Kong's first astronaut on board.
by WorldBrief & Maksim Micheliov | AI-generated summary
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