中国经济尚未迎来转机：国内需求疲软加速，消费与地产是增长主要拖累

Turnaround yet to be seen Domestic demand weakening accelerates, with consumptionandpropertythekeydragsongrowth.Wemaintainourbelow consensus growth forecast of 4.5% for 2026, with riskstilted to the downside should fiscal support be delayed. Thepost-Politburo infrastructure push is beginning to gaintraction. +852 2903 2653 yingke.zhou@barclays.comBarclays Bank, Hong Kong +85229032652ying.zhang3@barclays.comBarclays Bank, Hong KongJian Chang Following weaker-than-expected inflation and loan data, July activity indicators point to afurther loss of momentum in domestic demand.Amid a rising unemployment rate, retail salesgrowth slowed to 0.6% y/y from 1% in June, missing expectations for a modest recovery. Fixedasset investment also disappointed, with YTD growth weakening to -6.7% y/y from -5.7% in H1,reflecting broad-based weakness acrossinfrastructure,property,and manufacturinginvestment.Despiteresilientexports,industrialproductiongrowthsoftenedto4.5%y/yinJulyfrom5.3%previously,suggesting that strong external demand is increasinglyinsufficienttooffsetweaknessin thedomesticeconomy. +852 2903 2654jian.chang@barclays.comBarclays Bank, Hong Kong Wethink consumption and property, which togetheraccount for around 70% of GDP, remain thetwo key variables shaping China's growth trajectory. .Onconsumption,webelievelabourmarket developments remaincriticaltothedomesticdemand outlook,alongside policy support and household balance-sheet conditions.Despitefavourable base effects in H2,weexpect retail sales growthto slow sharplyto around1%in2026 from3.7% in 2025.A record 12.7mn university graduates entered the labour market thisyear, adding to already intense competition forjobs. At the same time,flexible employmenthas expanded rapidly.AccordingtotheChina Association ofEmployment Promotion(中国就业促进会),thenumberofworkerswithoutpermanentfull-timecontracts is estimatedtoriseto320mn in2026from280mn in2025,equivalent to around 44%of the workforce.Whileflexible employment has helped absorb workers displacedfrom the technology,manufacturing,and property sectors, it isgenerally associated with lowerincomestabilityand weaker social protection, which could continue to weigh on household spending andconsumerconfidence. ·Onproperty,the broad-based deterioration across keyindicators,including investment,housing starts, and home prices, reinforces our view that the market has yet to find a bottom.Weexpectproperty investmentto contractby20% in2026,following an averageannualdecline of 12%during 2022-24.This would leave property investment at just 45% of its 2021peak, underscoring the depth and persistence of the downturn. While the sector's directcontribution toGDP hasfallen significantly,to around13% in 2025 from 25% in 2021,itsindirect spillovers remain substantial. Continued weakness in property is weighing onemployment, income expectations,and consumer confidence through a persistent negativewealtheffect,makingit an important downside risk toboth consumption and thebroadergrowth outlook. continued to outperform. Output growth in industrial robots, NEVs, and semiconductorsacceleratedfurtherto 30%,21%, and 31% y/y,respectively,in July,building on already stronggrowth rates in H1 and throughout 2025. This resilience is also reflected in credit data. Whilebank lending to the propertysector continued to contract, loans to green industries grew 14.7%y/y and lending to high-tech sectors increased 14.6% y/y, led by ICT, pharmaceuticals, andaerospace.These trends underscorethe ongoingreallocation of capital and resources awayfrom property and traditional industries toward China's strategic growth sectors. Wemaintainourbelow-consensus2026GDPgrowthforecastof4.5% (vs.Bloombergconsensus of 4.6%). However, the risks are skewed to the downside should additional (quasi)fiscal supportbe delayed.On a quarterly basis, we expect growthmomentum toremain subdued inQ3(Barclays:4.3%y/y;Bloombergconsensus:4.6%)beforeimprovingmodestlyinQ4aspolicyrelated negative wealth effect, and ongoing household deleveraging, we expect consumption toremain a key drag on growth in H2, alongside a roughly 20% y/y contraction in propertyinvestment. Nevertheless, we expect additional policy supportto put a floorundergrowth in H2,with theimpact becoming more visible in Q4, and help stabilize activity toward year-end.The JulyPolitburo meeting suggests that policymakers remain committed to achieving this year'sgrowth target of around 4.5-5.0%, with an emphasis on faster fiscal spending, more rapidutilization of bond proceeds, and stronger implementation of the"Two Major" and"Two New"initiatives."Two Major" refers to investment in strategic infrastructure and national security-related projects, such as energy, digital infrastructure, and Al-related developments, while"TwoNew"focuses onboosting domestic demand through equipmentupgrades and consumertrade-in subsidies. Together, they remain the government's primary policy tools for supportinggrowththrough investmentand consump