The many gaps in China

Research evidence excerpt

The many gaps in China

Jahangir Aziz (1-212) 834-4328 Feng Zhu (852) 2800 1745 North America Economic Research J P M O R G A Njahangir.x.aziz@jpmorgan.com feng.zhu@jpmorgan.com

J.P. Morgan Securities LLC JPMorgan Chase Bank, N.A., Hong Kong Branch 03 August 2026

Tingting Ge (852) 2800-0143

tingting.ge@jpmorgan.com

JPMorgan Chase Bank, N.A., Hong Kong Branch

The many gaps in China Manufacturing and infrastructure investment have also

declined sharply, with the level of investment well below pre-

• China’s post-pandemic GDP remains ~1.5% below COVID trends, pointing to further headwinds to domestic

trend, despite 4.5%–5.5% headline growth demand.

• Weak consumption is the oft-cited culprit This note re-examines post-COVID growth through an

• But the bigger miss is investment, now extending expenditure-side GDP lens, unpacks the drivers of the surge

beyond property to manufacturing and infrastructure in net exports, and assesses how exposed the 4.5% growth

• Exports have become indispensable to growth, but are target is amid unusually weak consumption and investment

vulnerable to tariff increases and trade tensions and the role of macro policy.

• 2H growth depends on faster fiscal deployment after

1H under-execution Well-recognized weakness in consumption

• Bond issuance is a signal, but key is recovery in infra- Weak consumption has been the most widely recognized fea-

structure (and manufacturing) investment; otherwise ture of China’s post-COVID recovery. Household expenditure

meeting growth target may require more stimulus has underperformed nominal GDP growth, reflecting weak

income expectations, elevated precautionary savings, hous-

China’s post-pandemic recovery has underwhelmed, weighed ing-related wealth losses, and job security concerns. While