In December, China’s macroeconomic data showed growth inclined towards exports and industrial production. Retail sales and investment showed a weaker trend.<\/p>\n
China’s growth is expected to slow to 4.7% in 2026, influenced by US tariffs and a higher export base. Global technology demand may however offer some positive influence.<\/p>\n
The 7-day reverse repo rate remained unchanged recently, and banks’ loan prime rate fixings are expected to remain stable. There is an assumption for a 10-basis-point policy rate reduction and a 50-basis-point reserve requirement ratio cut within the year. <\/p>\n
This would adjust the 7-day reverse repo, 1-year LPR, and 5-year LPR to 1.30%, 2.90%, and 3.40% respectively. The National People’s Congress starting in March will set the 2026 growth target. The expectation is an ‘around 5%’ target.<\/p>\n
We see a clear divergence in the Chinese economy, with fourth-quarter growth moderating to 4.5% year-on-year, bringing the full year 2025 growth to 5.0%. Recent data confirms this split, as December’s industrial production rose a solid 6.8%, while retail sales growth disappointed at just 2.9%. This suggests that strategies favoring industrial and export-oriented sectors over domestic consumer-facing ones may continue to outperform in the near term.<\/p>\n
The weakness in domestic demand stems heavily from the ongoing property crisis, which remains a significant drag on investment. Looking back at 2025, we saw property investment contract by 9.6%, marking the third consecutive year of decline and weighing heavily on sentiment. This persistent weakness in gross capital formation makes broad-based long positions on Chinese equity indices like the CSI 300 or Hang Seng China Enterprises Index appear risky.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" China’s 2025 GDP growth met target at 5.0%, with consumption leading; 2026 forecast slightly lower.<\/p>\n","protected":false},"author":62,"featured_media":16964,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-39514","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t