中国展望：不均衡复苏

Uneven recovery June PMl and high frequency data continued to paint apicture of export-led growth recovery, while domesticdemand and labour market remained subdued, with theproperty market weakening further and 618 shopping festivalgrowth slowing sharply. Next week, credit and inflation dataarein focus. +85229032654 jian.chang@barclays.comBarclays Bank, Hong KongYingke Zhou +85229032653yingke.zhou@barclays.comBarclays Bank, Hong Kong June PMis: Modest improvement with sectoral divergenceChina's June PMl and high frequency data continued to paint a picture of export-led (production-led)growth recovery,while domestic demand and labourmarket remainedsubdued, with the property market showingmore signs of weakness in June and the 618shoppingfestival growthslowing sharply.The June manufacturing PMI rose to 50.3in Junefrom50.0 in May,above both ourforecast and consensus of 50.1.Theproduction sub-indexedgedhigher, while new export orders hit the 2nd highest print this year. The June PMI suggests atech products,lower energy prices,and a normalization in productionfollowing holiday-relateddisruptions in May.That said, headline PMI remained only slightly above the 50 threshold, whileunderlying sector performance continued to diverge. +85229032652ying.zhang3@barclays.comBarclays Bank, Hong Kong Sector performance remained uneven.The June PMI details continued to point to a bifurcatedrose to 53.5 from 52.9 in May, reaching its highest level in more than two years and remaining inexpansionforthe17thconsecutivemonth.Equipmentmanufacturingalsostrengthenedtoathree-year high of 52.5. Notably, both the production and new orders indices for sectors such asspecial equipment and computers, communications and electronicequipment, remained above54. In contrast, traditional industries remained weak. Oil-related sectors,including chemicalfibers, and rubber and plastic products, stayed in contraction, while ferrous metals processing isfacing headwindsfromthe prolonged property sectorweakness.Consumergoodsmanufacturing improved but continued to lag the headline PMl, underscoring still-soft domesticdemand. Recent high-frequency indicators reinforce this picture of a two-speed economy, with resiliencein high-tech and export-oriented sectors, but weakness in traditional industries and domesticdemand(China:Domestic demand searchesfora bottom,24 June2026).On thedomesticdemand side, major e-commerce platforms reported slower sales growth during the midyearshopping festival, while auto sales remained in a double-digit decline. Property marketindicators also softened, with new home sales growth slowing furtherfrom May and secondary-market transactions easing slightly, albeit still recording low double-digit growth. In contrast,external demand remained resilient, with port cargo throughput expanding by an average of5.2% y/y in June, up from 4.6% in May, suggesting continued strength in exports. On prices, manufacturing prices weakened, with the input price index falling to 54.2 and the output price index slipping back into contractionary territory at 48.2, both below theirFebruary survey readings which were collected before the Middle East conflict broke out onafter reaching a four-year high of 8.6pp in April-May, reflecting some relief from lower inputcosts.That said, the gap remained wider than the roughly 5pp average seen in JanuaryFebruary before the conflict, indicating that margin pressures have eased but have not fullyreturned to pre-conflicts levels. edgedup 0.2pp,to 51.4, while the new orders PMI returned to expansion territory at51.2from49.9 in May.The improvement was accompanied by a rebound in the new export orders PMl,which rose to 50.1 in June afterfalling to 48.6 in May.The RatingDog China manufacturingPMi,whichhasgreaterexposuretoexport-orientedfirms,remainedbroadlystableat51.6inJune.This capped the strongest quarter since Q42020,supported by robust export activity. 53.5inJunefrom52.9inMay,thehighestinmorethantwoyearsandabove50forthe17thstraight month. Equipment manufacturing also strengthened, reaching a three-year high of52.5. Consumer goods manufacturing returned to expansion territory,at 50.2 (May: 49.7),though it continued to lag the headline PMl, while manufacturing in energy-intensive sectorsremained weak at 47.1. Following a strong start in Q1, major economic indicators in April-May point to a sharp perspective,we expect thegovernment to havea clearerassessment of whether China is at riskof missing its growth target by 19 October, when Q3 GDP data are released. This will likelyinform the decision on whetherto step up additional stimulus. As a result, the late-OctoberPolitburo meeting (orthe NPC Standing Committee meeting around that time)will be a keyevent to gaugepotential new stimulus, alongside the late-July Politburo meeting.Forcontext,China announced additional quasi-fiscal stimulus of CNY5oobn in theform of a new financialpolicytoolin H22025 (late September2025),and had also unveileda CNY10trnpackag