中国经济展望_2026年核心主题与潜在意外_10页_8mb

China Economic Perspectives Summary for 2026

Core Content and Baseline Forecast

China's economic outlook for 2026 is characterized by a modest slowdown in GDP growth to 4.5%, down from 5% in 2025. This is driven by a decline in net export contributions, as export growth is expected to soften due to the delayed impact of US tariff hikes and global demand slowdowns. However, the US-China trade truce could offer a small offset.

• Exports: Expected to grow at 2.5–3%, with a notable divergence between US and non-US markets. US export growth is anticipated to improve, especially after April 2026, while non-US markets may see a moderation.
• Consumption: Will remain modest but softer, influenced by soft income growth and reduced fiscal subsidies. The government aims to increase household consumption share in GDP, but initial policy efforts are expected to be gradual.
• Property Market: The downturn is expected to continue but with smaller contractions. Property sales, new starts, and investment are projected to decline by 5–10% in 2026 and 0–5% in 2027, compared to 8%/21%/16% in Jan-Nov 2025.
• Investment: Manufacturing and infrastructure investment are expected to recover modestly from the sharp YoY decline in H2 2025, supported by delayed projects and new policy tools.
• Inflation: CPI inflation is expected to rise slightly to 0.4%, while PPI is projected to narrow its decline. The GDP deflator is likely to remain in a slight deflationary trend but less negative than in 2025.
• RMB Exchange Rate: The RMB is expected to appreciate against its currency basket but remain stable against the USD. A current account surplus of ~3% of GDP is anticipated, supported by strong export competitiveness.

Key Policy Themes and Structural Changes

The government is expected to adopt a modestly supportive and more balanced policy tone in 2026, focusing on high-quality growth and rebalancing the economy. The 15th Five-Year Plan emphasizes innovation as a top priority, with new economy sectors (like AI and tech) expected to grow faster than traditional sectors.

• Fiscal Policy: A modest broad fiscal expansion of 0.5–1% of GDP is anticipated, including a stable headline budget deficit at 4% and increased issuance of special CGB and LGB bonds.
• Monetary Policy: Another 20bps policy rate cut and 25–50bps RRR cut are expected by the end of 2026, with the PBC maintaining ample liquidity.
• Structural Reforms: Efforts to destock home inventory, streamline market access, and enhance property rights protection are likely to continue. The government may also focus on anti-involution and opening up service sectors and advancing RMB internationalization.
• Consumption Policies: A structural shift in consumption policies is underway, aiming to increase household income and create quality supply in services. However, initial efforts may be modest.

Possible Surprises and Uncertainties

There are several potential surprises and uncertainties that could impact the baseline forecast:

• Policy Support: The government may provide more than expected fiscal and monetary support to achieve a growth target of around 5%, especially if the property downturn and consumption growth are weaker than anticipated.
• Property Market: The trajectory of the property market remains uncertain, with the potential for earlier stabilization if the government implements more aggressive mortgage rate cuts and effective inventory reduction measures.
• Exports and RMB: Export growth may surprise on the upside due to stronger global demand or improved US-China trade relations, while the RMB could appreciate against the USD if the USD weakens more than expected or if foreign capital inflows increase.
• US-China Trade Tensions: If the US raises tariffs or tightens restrictions on Chinese tech and emerging sectors, it could bring downward risks to China's growth. Conversely, tariff reductions or exemptions could benefit exports.
• AI Development: The pace of AI development and adoption is uncertain. A stronger-than-expected AI investment could boost tech exports and productivity, while a global AI bubble burst could hurt growth through reduced demand and weakened tech sector CAPEX.

Key Uncertainties

• Policy Implementation: The timing and size of policy support remain uncertain.
• Global Demand: A faster-than-expected recovery in global demand could lead to a surprise in export growth.
• Domestic Confidence: The success of structural reforms and policy support will be crucial in boosting domestic confidence and economic growth.
• AI Bubble Risk: A potential burst in the global AI bubble could negatively impact China's tech exports and investment.

Analysts

• Ning Zhang – Economist, UBS AG Hong Kong Branch
• Jennifer Zhong – Economist, UBS Securities Co. Limited
• Grace Wang – Economist, UBS Securities Co. Limited
• Yu Song – Economist, UBS Securities Co. Limited

Summary of Figures

• Figure 1: Exports to moderate in 2026E with divergence between US and non-US markets.
• Figure 2: Property activities to decline further but by less in 2026-2027E.
• Figure 3: Retail sales growth to decelerate partly on diminishing support from trade-in subsidies.
• Figure 4: Infrastructure and manufacturing FAI growth to recover from the unexpected decline.
• Figure 5: CPI to edge up and PPI to narrow decline in 2026E.
• Figure 6: RMB to appreciate vs its currency basket but largely stabilize vs the USD.
• Figure 7: AFD to expand by 0.5–1ppt in 2026E, with stable headline fiscal deficit.
• Figure 8: PBC to cut policy rate by 20bps in 2026E.
• Figure 9: R&D spending to pick up further in the next 5 years.
• Figure 10: China to set an explicit target of consumption share of GDP in the new FYP.

Disclaimer

This document is prepared by UBS Securities Asia Limited, an affiliate of UBS AG. It is intended solely for authorized recipients. UBS may act as a principal in the debt securities or derivatives mentioned in this report. Views and forecasts are subject to change and are based on current information. UBS does not guarantee the accuracy or completeness of the data or the results. This document is not directed to, or intended for distribution to, any person or entity in jurisdictions where it would be illegal or unauthorized.

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