Greater China

Research evidence excerpt

Greater China

nal fiscal support to provide a lift in 2H, keeping reflect a high-tech buildup and commodity stockpiling.

full-year growth within the 4.5–5% target range. A key chal- Accordingly, we have revised 2Q growth downwards to

lenge is to revive private investment and consumption with 3.3%q/q saar (Table 1).

adequate and sustained fiscal outlays.

Table 1: China GDP forecast revision

Activity remained soft in May 2026 1Q26 2Q26 3Q26 4Q26

May activity data was weaker than expected. Industrial pro- %q/q, saar

duction increased 4.5%oya or 0.2%m/m sa, after April’s Old 6.7 4.0 3.2 3.2

sharp contraction. Underlying momentum remained soft, with New 6.7 3.3 3.5 3.7

the trend pace slowing to 1.0%3m/3m saar. Industrial upgrad- %oya

ing continued. High-tech and equipment manufacturing out- Old 4.7 5.0 4.9 4.8 4.3

performed amid a tech-cycle upswing and policy support, New 4.7 5.0 4.7 4.7 4.3

accelerating to 15.1%oya and 9.5%, respectively. Output of Source: NBS, J.P. Morgan

3D printing equipment, lithium-ion batteries, industrial robots

and integrated circuits also increased. NEV production We see modest upside to 2H real GDP growth. Several poten-

rebounded strongly amid higher gasoline prices. tial support factors could be at play. Exports have held up,

and the mid-May Trump–Xi summit may reduce trade uncer-

Figure 1: Key economic indicators in China tainty, while global IP/tech strength could continue to buoy

4Q19 = 100, seasonally adjusted Exports China’s high-tech cycle. A tentative US–Iran agreement and

200 FAI (excl. real estate) possible reopening of the Strait of Hormuz could ease energy

180 IP pressures and support activity. Most importantly, the under-

delivery of fiscal support in 2Q leaves room for stronger stim-