China's National Bureau of Statistics (NBS) reported that retail sales in May surged by 6.4 percent year-on-year, amounting to 4.13 trillion yuan (approximately $575.08 billion).

This marks the fastest growth rate since December 2023 and surpasses major forecasts as analysts had predicted a rise of 4.9 to 5 percent.

The acceleration of retail sales expanded by 1.3 percentage points compared to the previous month, attributed by NBS spokesperson Fu Linghui to strong consumer activity during the May Day and Dragon Boat Festival holidays, alongside the impact of the '618' shopping festival promotions and an effective consumer goods trade-in program.

Despite initial fears surrounding the China-US trade conflict during the months of April and May, the economic data reflected a resilience that contradicted earlier pessimistic outlooks.

Experts, including Cong Yi from the Tianjin School of Administration, highlighted that a framework of measures reached in trade talks and a 90-day tariff suspension helped bolster market confidence significantly.

Cong emphasized the effectiveness of the consumer goods trade-in program in mitigating economic pressures during the April-May period, aligning with observations from Yang Delong, chief economist at First Seafront Fund, who noted that consumption has become the leading driver of economic growth, now outpacing investment and exports.

Coordination of fiscal and monetary policies was indicated as a crucial factor, promoting growth in infrastructure and emerging industries.

Experts pointed to improved sentiment regarding China-US trade relations as contributing to heightened business confidence and overall market vitality.

In response to inquiries about the implications of recent economic figures relating to the Geneva trade discussions with the US, Fu acknowledged the beneficial outcomes and consensus from these talks, relating them to broader improvements in bilateral economic relations.

The NBS also revealed that the total value added of industrial enterprises above the designated size rose by 5.8 percent year-on-year, while national fixed-asset investment increased by 3.7 percent.

Fu noted significant advancements in industrial upgrading, driven by innovation in sectors such as high-end manufacturing, the digital economy, and new energy industries.

High-tech manufacturing output expanded by 8.6 percent year-on-year, with digital product manufacturing growing 9.1 percent, both outpacing overall industrial growth.

In terms of foreign trade, Fu reported diversification and growth, particularly with ASEAN and Belt and Road Initiative partner countries, with a noted expansion in exports of high-tech products despite challenges from a sluggish global economy and reduced trade with the US.

As discussions surrounding the economic outlook for the second quarter unfold, Fu indicated that, despite external challenges, the foundations experienced in the early quarter positioned the economy for continued stability.

He highlighted the importance of the recent meetings between China and the US, which intended to reinforce economic and trade relations and promote stability in global economic conditions.

Yang noted potential challenges in the second quarter due to tariffs, underscoring the significance of bolstering domestic demand as essential for achieving a full-year GDP growth target of around 5 percent.

Fu reiterated the critical role of China's large population and expanding middle-income demographic as a solid basis for domestic demand, offering resilience against external economic fluctuations.

With a commitment to active macroeconomic policies and strengthening internal growth drivers, experts indicated that these measures are crucial as China navigates potential uncertainties in the global economic landscape.