China Economic Outlook. June 2025

Summary

We raise the China GDP forecast based on the recent China-US Geneva Agreement and the 3nd round stimulus. We also analyze the recent economic development and the policy outlook.

Key points

• Key points:
• We review the timeline of the China-US trade war and focus on the recent China-US Geneva Agreement, we also summarize China’s possible future reactions amid the China-US confrontations.
• Recent China-US Geneva Agreement and the 3nd round stimulus made us raise our China 2025 and 2026 GDP forecasts.
• The 3nd round stimulus package includes RRR and rate cut as well as a series of other monetary policy support measures, such as re-lending facilities, housing market support and capital market support.
• Housing prices started to bottom out particularly in tier-1 cities as the leading indicator, although other real estate indicators just marginally shrank their decline.
• Deflation environment is difficult to change amid supply-demand mismatch and weak sentiments; export figures have been significantly disordered by the trade war progress.

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