中国：最坏的情况是否已经过去？

China - What if the worst is over? China growth has stabilised, but meeting the 5% target willlikely require more stimulus, which won't be rushed. YetChinese stocks keep rallying and EU Chinaproxies (BCEUCHIN) have stopped underperforming. Wediscuss catalysts & opportunities, and stay OW FTSE100 asdualtariffhedge & China play. European Equity Strategy Emmanuel Cau, CFA+44 (0)20 3134 0475emmanuel.cau@barclays.comBarclays, UK Matthew Joyce, CFA+33 (0)1 4458 3341matthew.joyce@barclays.comBBI, Paris Listen Magesh Kumar Chandrasekaran, CFA+44 (0)20 3134 5983magesh.kumarchandrasekaran@barclays.comBarclays, UK Incremental stimulus should put a floor to China growth.Following the stronger-than-expected H1 growth, we believe growth momentum will slow down given the worseningproperty indicators and payback in exports, while forecasting consumption to moderate yetremain resilient. We think the new fiscal stimulus will likely emerge around orafterthe Sep-Octhigh level meetings, but remain conservative about its size and impact. The Chinesegovernment's recent focus on tackling excessive competition and price wars amid persistentdeflation and falling profitability is worth noting. Arihanth Bohra Jain+91 (0)22 6175 1406arihanth.bohrajain@barclays.comBarclays, UK Emmanuel Makonga+44 (0)20 7773 2593emmanuel.makonga@barclays.comBarclays, UK China equities in the lead, EU China proxies stabilising.Chinese equities are ahead of thepack ytd. Gains have mainly come from H-listed shares, helped by CNY stabilisation, with Tech,Healthcare, and Mining sectors leading. LOs and Macro/CTA funds have turned more positive,but overall positioning does not appear stretched and valuations remain depressed. In contrast,the European stocks most exposed to China have underperformed sharply ytd, fuelling moredomestic-exporters polarisation. We note, however, that these EU China-exposed stocks havegenerally started to rebound since early summer, likely due to better data, signs of a US-Chinatrade war detente, expectations of more stimulus, and, more broadly, nascent momentumreversal. Economics Jian Chang(ii)+852 2903 2654jian.chang@barclays.comBarclays Bank, Hong Kong Yingke Zhou(ii)+852 2903 2653yingke.zhou@barclays.comBarclays Bank, Hong Kong Potential catalysts to watch. Given the stronger growth delivery in H1, our economists do notexpect new policy stimulus to be announced at the Politburo later this month. This is morelikely to happenafterthe summer, at the NPC standing committee meeting. Meanwhile, the EU- Ying Zhang(ii)+852 2903 2652ying.zhang3@barclays.comBarclays Bank, Hong Kong China summit on 24-25 July and the August 12thdeadline for the US and China to reach a trade Barclays Capital Inc. and/or one of itsaffiliatesdoes and seeks to do business with companiescovered in its research reports. As a result, investors should be aware that the firm may have aconflict of interest that couldaffectthe objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision. This research report has been prepared in whole or in part by equity research analysts basedoutside the US who are not registered/qualified as research analysts with FINRA. (ii)This author is a member of the Fixed Income, Currencies and Commodities Researchdepartment and is not an equity or debt research analyst. deal will also matter with regards to external demand conditions for China, and are likely to setthe tone for the China trade in H2. We advise selective exposure to China.We reiterate ourFTSE100 OW, as we see its barbelldefensive & commodity tiltofferingan interesting hedge againsttariffsrisk in Europe, as well asupside exposure to China macro, at a cheap valuation. Our basket of EU China-exposed stocks(BCEUCHIN)is down 3% ytd vs. SXXP up 7%, and thus is likely to benefit the most in case ofgood news. The basket P/E has re-rated recently and we expect high dispersion under the hood,though, so have screened for stocks with negative performance but positive EPS momentum.Sector wise, we stayMW Miningfor now. A weaker dollar, doveish Fed expectations andinflation hedging could fuel more short squeeze, and EPS momentum is improving, but Augustseasonality is very negative for the sector, and we want to see more green shoots in Chinesedata. Within consumer, we are tacticallyOW Luxurypost our recent upgrade, which is also aplay on top-end US consumer and USD stabilisation, butUW Autosas we do not see structuralissues going away. We stayMW Capital Goods, as the sector earnings look robust butvaluations are rich andtariffsrisk looms into 1 Aug. Economics: Incremental stimulus to put a floor togrowth Jian Chang(ii)Barclays Bank, Hong Kong | Yingke Zhou(ii)Barclays Bank, Hong Kong |Ying Zhang(ii)Barclays Bank, Hong Kong Chinese government continues to prioritise equity market revitalisation... Entering 2025, the DeepSeek moment, the generally stronger-than-expected economic data,and the US-Chinatar