All About Tech

Research evidence excerpt

All About Tech

Economics Research

22 June 2026 | 12:48PM HKT

CHINA MATTERS

n China’s May activity data continued to disappoint outside of exports and Hui Shan

+852-2978-6634 | hui.shan@gs.com

industrial production. With export growth contributing roughly 3pp to Goldman Sachs (Asia) L.L.C.

year-over-year real GDP growth, domestic demand appears to be growing at a

sluggish pace of only 1-2% yoy in recent months based on official data.

n We nudge down our Q2 real GDP forecast from 4.0% qoq annualized to 3.5% on

the back of weak April and May data, implying year-over-year growth of 4.5%

(vs. 4.7% previously). Assuming lower oil prices, faster fiscal spending, and

normalized weather conditions, we project Q3 real GDP growth to rebound to

5.0% qoq annualized (vs. 4.5% previously). Our full-year real GDP growth

forecast remains unchanged at 4.7%.

n The Chinese government focuses on its long-term objective of transforming the

economy into a tech-driven one. The divergence between high-tech/AI and

property/consumption continues to widen in both industrial production and

capital market data. Top leaders’ domestic travel, recent policy communications,

and our on-the-ground channel checks all suggest these trends will persist.

n While China’s long-term planning has proved valuable in weathering external

shocks such as the US-China trade war and energy price spikes, we believe

cyclical policies are crucial to ensuring a smoother path toward China’s strategic

goals. We discuss three channels connecting near-term policies with long-term

objectives.

n First, AI-related job displacement could amplify macroeconomic headwinds and

delay, if not derail, the recovery in the property market and household

consumption. Second, with export growth likely to remain strong over the next