中国图景：贸易不确定性中的韧性

Hazel LaiHazel-a.lai@db.comDeyun OuDeyun.ou@db.com Deutsche BankResearch•Economics:Growth remained robust at over 5% in the first five months of the year, fueled by resilient exports despite tradetensions, as well as recovering services and consumption due to policy support. While activity may moderate in June asholiday and subsidy impacts wane, Q2 growth is likely to stay above the government's growth target.The strong performance thus far likely reduces the urgency for additional broad-based policy support until after thesummer. As such, we have postponed our 10bp policy rate cut forecast from Q3 to October. Likewise, we believe any fiscalbudget revision, if necessary, is likely to be pushed to Q4. More policy measures for the property sector may be on the way,though, as the State Council has committed to increase its support. On the trade deal with the US, our base case is for theUS to maintain additional 25-30% tariffsonChina through year end. The upcoming rounds of negotiations are likely tofocus on export control issues, such as chips and rare earth materials.We have raised our 2025 GDP growth forecast to 4.8% YoY (+0.1ppt), and our Q2 and Q3 forecasts to 5.1% YoY (+0.3ppt)and 4.5% YoY (+0.1ppt), respectively.•FX:The recent shifts in capital flows further strengthen our case for a stronger RMB. Domestic residents have been netsellers of USD for the third consecutive month, while foreign investors are gradually returning to China’s equity market,despite recent bond outflows. In addition, equity outflows via Southbound trading are moderating, likely due to improvinginvestor sentiment. These flow dynamics, coupled with the ongoing lower USD/CNY fix, reinforce our outlook for the RMBand support our 3M USD/CNH put spread trade. Moving forward, a key factor will be whether we see additional FXconversions, especially as we approach the 7.1 level.•Rates:Considering the recent open-market operations, we believe the PBoC will maintain accommodative monetarypolicy conditions in H2. Consequently, the front-end rates should be well anchored at the current low level. However, wesee limited room for a further rally, as 10bp is already priced in. While net CGB supply is anticipated to add pressure tolong-dated CGB yields, the potential pick-up in lifers’ premium growth in the next two months is likely to keep the curvesteepening at a gradual pace.Keytakeaways Economics Deutsche BankResearchSequential GDP growthBreakdown of GDP growthGrowth remained strong atover 5% in the first five months, but a slowdownis likely going forward•Despite rising trade tensions, China maintained 5.4% real GDP growth in Q1 and 5.8% YoY growth in May, above the government’s5% growth target.•We revise up our Q2 and Q3 GDP growth forecasts to 5.1% YoY (+0.3ppt) and 4.5% YoY (+0.1ppt), respectively. Our 2025 GDPgrowth forecast is revised up to 4.8% (+0.1ppt) .•Activity will likely moderate in June as the positive impacts from holidays and subsidies fade. Nevertheless, Q2 growth willlikelystay above the government's growth target, which will likely reduce the urgency for additional broad-based policy support untilafter the summer.Data source: Deutsche Bank Research, NBSData source: Deutsche Bank Research, NBS4.64.04.43.5-0.25.31.03.12.62.81.91.81.11.5-0.80.3-0.50.70.61.70.5-0.6-1135792016201820202022ConsumptionNet exports%-2024681020212022202320242025Real GDP growth estimate, monthlyReal GDP growth, quarterly% YoY Deutsche BankResearchShips departing from ChinaUS-bound container prices and ship departuresExports remained resilient despite trade tensions•Exports grew by 6% YoY in the first five months of the year, demonstrating resilience despite trade tensions. This can be partlyattributed to the re-routing of exports to other regions such as ASEAN (averaging 17% YoY in April-May).•Exports to the US dropped substantially in April and May (averaging-25% YoY). However, we expect a rebound going forward dueto the temporary trade agreement made on May 12, as indicated by the elevated US-bound container future prices.•We expect overall exports to stabilize at around 4% for the remainder of the year, resulting in annual growth of 3%.Data source: Deutsche Bank Research, CEIC,Bloomberg Finance LPData source: Deutsche Bank Research, CEIC, Wind20004000600080001000012000USD/container020406080100120140160180200220240Apr-23Oct-23Apr-24Oct-24Apr-25Ship depature to the world, 20 major portsShip depature to US, rhs Deutsche BankResearchHousehold income and spending growthHousehold spending improved modestly in Q1•Coupled with increased consumption subsidies, household spending increased by 0.7ppt to 5.2% YoY, approaching the rate ofincome growth.•As a result, the seasonally adjusted savings rate decreased to 31.5%, a full percentage point decline compared to Q4 2024.Data source: Deutsche Bank Research, NBS-10-50510152020172018 2019 2020 2021 2022 2023 2024 2025Spending growthIncome growth% YoY Household savings rateData source: Deutsche Bank Research, N