High-Frequency Tracking of China's Economic Activity and Policy

Overview

This report provides Goldman Sachs’ high-frequency tracking of China’s economic activity and policy, with data updated through May 14–15, 2026. It covers four main sections: (1) Consumption & Mobility: including new and resale home transactions, civil aviation, congestion indices, NEV and auto sales; (2) Production & Investment: covering crude steel output and demand, coal consumption, and special bond issuance progress; (3) Other Macro Activities: including port cargo and container throughput, U.S. soybean exports, China’s crude oil demand, and refinery margins; (4) Markets & Policy: covering crude oil inventories, interest rates, exchange rates, policy financing data, and recent policy developments. The report aims to track the impact of energy supply shocks on China’s economic activity.

Core views

**Consumption and mobility show clear divergence.** In property, new home sales area in 30 cities rose 6.9% year-over-year (vs. 2025) as of May 14, while resale home transactions (in 16 cities) increased 25.2% YoY, indicating a modest recovery in the property market. However, mobility has weakened significantly: domestic flight volumes fell 12.7% YoY as of May 14, with flight cancellation rates rising 12.9 percentage points above 2025 levels; traffic congestion indices in major cities dipped slightly by 0.8% YoY as of May 13. In auto sales, April full-month NEV sales declined 6.1% YoY, and total auto sales dropped sharply by 21.4% YoY, with absolute monthly sales in 2026 consistently below 2025 levels. **Production-side performance is mixed.** Steel demand was essentially flat (-0.2% YoY) as of May 15, while crude steel output fell 3.2% YoY—both weaker than last year. In contrast, coal demand remained strong: daily coal consumption by power plants in the coastal eight provinces rose 17.6% YoY as of May 12. **Foreign trade and logistics activities remain resilient.** Port container throughput grew 7.2% YoY as of May 11, though vessel departure deadweight tonnage from the top 20 ports declined 5.5% YoY as of May 14, signaling marginal softening in freight volumes. **Energy prices surged due to Middle East tensions.** China’s gasoline and diesel prices have risen in tandem with international crude (Brent) since early 2026. In import price indices, both crude oil and refined product import prices began climbing sharply around March, with refined product export prices showing similar surges. Among chemical feedstocks, sulfuric acid prices rose most notably since just before the Ukraine war (March), while methanol and polypropylene also increased. **Money market rates remain accommodative.** The 7-day interbank repo rate (DR007) stays below ~1.5%. The 7-day reverse repo rate (OMO) has held at ~1.45% since the rate cut at end-2024, showing no signs of monetary tightening. On FX, USD/CNY stabilized and rebounded from end-2024 levels, with CNY strengthening against the CFETS basket; the PBOC’s countercyclical factor in the daily fixing has shown a stronger bias toward appreciation (neutral-to-appreciation stance).

Analysis framework

The report employs a high-frequency nowcasting approach, updating over 30 indicators weekly. By comparing time series against 2025 baselines, it identifies marginal changes in economic activity. The core logic is that under external shocks (e.g., Middle East geopolitical tensions driving up energy prices), high-frequency data can reflect real-time economic shifts more promptly than monthly or quarterly GDP. All indicators are smoothed using 7-day moving averages to reduce daily noise and are benchmarked against corresponding periods in 2024 and 2025, enabling readers to intuitively assess whether current activity is above or below trend.

Methodology notes

• Industry/sector analysis frameworkSupply-demand framework

  Supply-demand framework

  Tracks supply-side output via high-frequency data (e.g., coal consumption, steel production, port throughput), then cross-validates with demand-side indicators such as prices, inventories, and mobility to assess actual economic strength.

• Macroeconomic framework

  Nowcasting (high-frequency real-time tracking)

  Estimates current economic conditions in real time using daily/weekly high-frequency indicators (e.g., flight volumes, property transactions, coal-fired power generation), offering faster updates than traditional monthly/quarterly data—especially useful during periods of frequent external shocks.

• Cycle and sentiment frameworkInflection point analysis

  Inflection point analysis

  Assesses whether economic activity is turning by observing synchronized weakening or strengthening across multiple high-frequency indicators. For example, this period shows weakening in autos and flights but strength in property and ports, suggesting a divergent—not systemic—recovery.

• Industry/sector analysis frameworkUpstream-midstream-downstream transmission

  Upstream-midstream-downstream transmission

  Tracks how energy price increases transmit through the industrial chain: from crude oil import prices (upstream) → refined products/chemical prices (midstream) → downstream consumer behavior (e.g., mobility).

• Fixed income and credit analysisSpread analysis

  Spreads and asset quality

  Compares DR007 (interbank rate) with OMO policy rates to gauge liquidity conditions in the banking system and the stance of monetary policy.

Key data

• New home sales area in 30 cities (7-day moving average)+6.9% yoy (vs 2025)As of May 14, up vs. 2025
• Resale home sales area in 16 cities (7-day moving average)+25.2% yoy (vs 2025)As of May 14, up vs. 2025
• Domestic flight volumes (7-day moving average)-12.7% yoy (vs 2025)As of May 14, down vs. 2025
• Domestic flight cancellation rate+12.9 percentage points (vs 2025)As of May 14, up vs. 2025
• Traffic congestion index in major cities-0.8% yoy (vs 2025)As of May 13, slightly down YoY
• Monthly NEV sales-6.1% yoy (vs 2025)Full April data
• Total monthly auto sales-21.4% yoy (vs 2025)Full April data
• Daily coal consumption by coastal eight provinces’ power plants+17.6% yoy (vs 2025)As of May 12
• Weekly crude steel output-3.2% yoy (vs 2025)Week ending May 15
• Weekly steel demand-0.2% yoy (vs 2025)Week ending May 15
• Port container throughput (major ports)+7.2% yoy (vs 2025)Week ending May 11
• Deadweight tonnage of departing vessels from top 20 ports (7-day moving average)-5.5% yoy (vs 2025)As of May 14
• Cumulative local government special bond issuance30.9% of annual quotaAs of May 15
• Visible crude oil inventory in China (as of May 11)Approx. 1,238 million barrels; equivalent to 73.2 days of demandPer chart descriptions in report; broadly stable since March
• DR007 (7-day interbank repo rate)Below ~1.5%As of latest data

Impact & implications

High-frequency data shows China’s economy is diverging amid surging energy prices: property and infrastructure-related activities (new home sales, coal consumption) remain relatively resilient, while mobility-driven consumption (aviation, autos) is under clear pressure—indicating that high oil prices are beginning to dampen discretionary spending. On the trade front, container throughput remains elevated, but dry bulk shipping volumes have turned negative year-over-year, suggesting shifts in cargo composition due to price and demand dynamics. Money market rates remain low, reflecting an overall accommodative policy stance.

What to watch

• Further transmission of rising energy prices to downstream consumption and industrial production
• Whether weekly high-frequency data on property, aviation, autos, and ports stabilizes or deteriorates
• Progress of local government special bond issuance and fiscal expenditure
• Whether the PBOC maintains current accommodative rates or adjusts OMO rates further