Policy Momentum and Structural Upgrades Drive Economic Optimism
SHANGHAI, June 10 – Major international financial institutions including Goldman Sachs, JPMorgan Chase, and UBS have collectively upgraded their 2025 growth forecasts for China’s economy, signaling renewed confidence in the world’s second-largest economy. The revisions reflect improving policy effectiveness, market performance, and industrial upgrading trends.
Coordinated Forecast Upgrades
Goldman Sachs raised its projection by 0.6 percentage points, matching UBS’s adjustment, while JPMorgan increased its estimate by 0.7 points. Analysts attribute this optimism to China’s policy package introduced since September 2024, which has begun yielding measurable results.
“We observe a two-phase approach,” said Zhu Haibin, Chief China Economist at JPMorgan. “The initial monetary easing through the People’s Bank of China has now transitioned to unprecedented fiscal stimulus, including a budget deficit ratio exceeding 4% and record special bond issuance.”
Structural Strengths Emerging
Three key factors underpin the upgraded assessments:
Policy continuity: Negative list adjustments and free trade zone innovations demonstrate China’s commitment to institutional opening
Foreign investment rebound: 12.1% year-on-year growth in new foreign-funded enterprises during the first four months
Capital market confidence: Hong Kong IPO fundraising surged 320% to $9 billion year-to-date
Goldman’s Chief China Equity Strategist Liu Jingjin maintains an “overweight” recommendation on Chinese stocks, anticipating $200+ billion in AI-related capital inflows over the next two years.
Resilience Against Headwinds
Despite U.S. tariff increases, analysts highlight China’s economic durability. “Domestic growth continues demonstrating remarkable resilience,” noted UBS Senior China Economist Zhang Ning. Morgan Stanley’s Xing Ziqiang added that China’s “steady policy rhythm provides global investors with much-needed certainty.”
Fidelity International’s APAC Investment Director Stuart Rumble observed Chinese companies “fortifying market positions while diversifying away from U.S. dependence through overseas production expansion.”
Tech-Consumption Dual Engine
Institutional research converges on two transformative trends:
- AI leadership: Morgan Stanley’s 100-page blueprint details China’s closed-loop AI ecosystem across 60 leading firms
- Consumption upgrade: Rising interest in quality retail, cultural tourism, and domestic brands
“The consumption recovery now extends beyond policy-supported goods to dining, sporting goods, and furniture,” Rumble noted. JPMorgan’s Zhu highlighted particularly strong performance in “interest-driven consumption categories.”
This synchronized upgrade cycle suggests global capital is rediscovering China’s growth narrative, with technology innovation and consumption transformation creating new investment magnets. The challenge remains sustaining this momentum through continued structural reforms and market-opening measures.
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