Asia Economic Weekly: China: ‘Six networks’ to drive an investment upturn

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Asia Economic Weekly: China: ‘Six networks’ to drive an investment upturn

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Asia Economic Weekly

China: ‘Six networks’ to drive an

investment upturn

This week in focus 29 May 2026

This week, both central banks in Korea and New Zealand kept policy rates unchanged at GEM Fixed Income Strategy &

the policy meeting, but signaled further tightening in the rest of this year. In China, Economics

Hukou reform is progressing toward residency-based public services to support labor Asia

mobility and urbanization, though implementation will likely be gradual amid fiscal

constraints. In India, the RBI’s record dividend offers limited fiscal relief, with deficit Table of Contents

risks still tilted higher. In Singapore, softer inflation gives MAS more time to assess, This Week in Focus 2

with no tightening expected in July.

China in Focus 3

China: ‘Six networks’ to drive an investment upturn Data Preview 5

We expect China’s fixed-asset investment to return to positive growth in 2026 despite a Macro Forecasts 6

setback in April, although the recovery is not broad-based. The earlier downturn in Research Analysts 11

2H25—driven by a “perfect storm” of fiscal tightening, producer price deflation, weak

exporter sentiment, and policy constraints—is now easing, but local government balance Helen Qiao

sheets still limit a full rebound. Policy is increasingly anchored on the “six networks”— China & Asia Economist

Merrill Lynch (Hong Kong)

spanning energy, digital, and logistics systems—with investment potentially reaching helen.qiao@bofa.com

around RMB7tn and forming a multi-year, AI-driven cycle. Crucially, funding is shifting Izumi Devalier

away from land-based and off-balance-sheet local financing toward more centralized Japan Economist

BofAS Japan