China has emerged as a standout performer in global consumer sentiment, with consumer confidence surging to an all-time high of 164.4 during the week of May 10, according to Morning Consult. This record-breaking optimism comes as the global Index of Consumer Sentiment (ICS) 4-week moving average climbed to 94.3, marking the fourth straight week of growth since hitting a yearly low of 92.8 in April. The stark contrast highlights China's relative insulation from the ongoing Iran War, with analysts attributing this record-breaking optimism to the country's reliance on Russian pipeline oil, which has shielded its economy from massive supply chain disruptions currently plaguing the Strait of Hormuz. This domestic resilience is expected to serve as a regional buffer for economic growth and may provide the Chinese government with additional leverage in upcoming trade negotiations with the United States and Western allies.
Despite the positive consumer sentiment, China's economy demonstrated resilience with value-added industrial output rising 5.6% year-on-year in the first four months of 2026, driven by solid gains in manufacturing and stable performance across mining and utilities. According to the latest data, retail sales of consumer goods increased 1.9% YoY, supported by stronger services consumption and continued expansion in online retail, underscoring the shift toward more digital and experience-driven spending. This performance represents a notable improvement from the disappointing April data that had shown retail sales missing forecasts and rising just 0.2%, which had represented the weakest reading since they contracted in December 2022 when China reopened after Covid-19 restrictions.
The global consumer sentiment data reveals a mixed but generally improving picture as of mid-May 2026. According to Morning Consult, the global ICS 4-week moving average climbed to 94.3 during the week of May 10, marking the fourth straight week of growth. However, the outlook across the Americas remains more tempered, with the U.S. index slipping 1.8 points to 89.0 this week, while the U.S. Consumer Health Index (CHI) dipped into negative territory for the first time since late 2024, suggesting that when adjusted for inflation, actual spending growth in the U.S. has turned negative. Elsewhere in the region, Colombia leads with a sentiment score of 122.7, up 1.8% from January, while Mexico sits near multi-year lows at 106.9 due to concerns over U.S. tariff exposure.
The disappointing performance has prompted analysts at major banks to urge bolder policy measures. As reported by Business Standard, Nomura economists led by Ting Lu stated that authorities "might need to step up policy support for stabilising growth" and warned that "Beijing has no room for complacency." Societe Generale economists noted that the data "should keep PBOC easing — RRR and even rate cuts — firmly on the table." However, HSBC's chief economist Jing Liu maintained that "the stance still seems to be to play cautiously," with the bank's base case being no extra stimulus for the time being. The government reduced fiscal spending in March, and the central bank has refrained from hinting at any further policy loosening, citing ample market liquidity and weak credit demand. According to CNBC International, the underwhelming April data has reinforced expectations for massive new stimulus package to get the economy going again, particularly as the global energy crisis continues to impact manufacturing and export demand.
The consumer economy continued to struggle with car sales plunging 15% in April from the previous year, marking the steepest contraction since mid-2022 when the country was under Covid restrictions. As reported by Business Standard, purchases of home appliances and furniture declined at a double-digit pace, while gold, silver and jewellery sales plunged 21%. In contrast, electronics production expanded 15.6% in April, the fastest pace in two years, lifted by strong global demand for artificial intelligence chips, and automobile industry growth reached 9.2% as overseas electric vehicle sales surged. The government has scaled back subsidies for electric vehicle purchases this year, while the Iran oil shock hurt sales of petrol-powered cars. According to CNBC International, the energy-driven inflation is biting the US, Europe and Australia right now, flowing straight into groceries and household bills, with central banks raising rates unable to create more oil supply.
The Communist Party's Politburo is scheduled to meet in July to review economic growth and policy, making it the next likely window for any adjustment in stimulus measures. According to Business Standard, Chinese households net repaid the largest amount of loans in April since comparable records began in 2010, highlighting continued weakness in domestic consumption. Despite the challenging data, Chinese exports are expected to remain strong after climbing 15% in the first four months of the year, supported by stabilising trade ties with the US. Fu Linghui, spokesperson for the National Bureau of Statistics, described the deterioration as "a normal fluctuation from month to month" while acknowledging persistent supply-demand imbalances and complex global conditions. As CNBC International notes, the reporting should reflect that the global economy battered by energy costs will always transmit that shock to its manufacturing centre, creating a global structure problem rather than a uniquely Chinese one.
