Something curious is going on with Chinese retail sales. In contrast to the official consumer confidence index, which has been booming – around multi-decade highs (highest since the early-1990’s), retail sales growth has been on a declining path, and was particularly weak in May. But one detail sticks out to me: headline retail sales YTD were up 9.5% vs 2017, yet online sales were up 30%. Online sales, by the official statistics account for around 1/5th of total retail sales – and this could be understated, and one reason for the apparent divergence against consumer confidence. As important as the booming online sales are though, the property market has been softening (which I have been talking about for a while) – and property still remains a key driver for the Chinese economy, so it may also be a reflection of actual slowing in activity also.