China Local Markets Weekly: Waiting for a summer reset

研报英文原文证据摘录

China Local Markets Weekly: Waiting for a summer reset

J P M O R G A N Global Markets Strategy

24 July 2026

China Local Markets Weekly

Waiting for a summer reset

Emerging Markets Strategy

Tiffany Wang AC

(852) 2800-1726

tiffany.r.wang@jpmorgan.com

J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

Morgan Broking (Hong Kong) Limited

• Since the publication of our Mid-Year Outlook, much of the earlier Arindam Sandilya

optimism priced into China-linked assets has faded, leaving financial markets (65) 6882-7759

starting 2H26 with a broadly neutral risk premium on China. The latest 2Q GDP arindam.x.sandilya@jpmorgan.com

data confirmed a moderation in growth and continued softness in domestic JPMorgan Chase Bank, N.A., Singapore Branch

demand, although recent activity indicators suggest conditions may be

stabilizing at the margin. Market attention has now shifted to the upcoming

July Politburo meeting, where policymakers are expected to reiterate their

commitment to supporting growth. However, expectations for a large-scale

stimulus package remain low.

• Government bond issuance has picked up since June, but the overall pace

continues to trail last year, with special local government bond issuance

particularly subdued. Although the unspent quota leaves room for a pickup in

coming months, tighter LGFV financing rules, greater oversight of local

borrowing, and slower policy bank bond issuance have led investors to

downgrade expectations for fiscal/quasi-fiscal support. Against this backdrop,

Chinese bond yields remain well anchored, while LGB-CGB spreads have

compressed to multi-year tights amid persistent duration demand.

• At the same time, foreign appetite for Chinese bonds remains robust.

Inflows through both CIBM and Bond Connect channels have stayed strong in