Goldman Sachs expects China's real GDP growth to slow to 4.5% in the fourth quarter, with exports remaining resilient but domestic demand weakening

Goldman Sachs expects China's industrial production year-on-year growth to rise from 4.8% in November to 5.4% in December, as the manufacturing Purchasing Managers' Index (PMI) and export data exceeded expectations, reflecting an improvement in manufacturing momentum. However, the growth in automobile production has further slowed, and the year-on-year decline in steel production has widened.

On a monthly basis, the bank expects the year-on-year decline in fixed asset investment in December to remain at 8.9%, compared to 10.7% in November, reflecting statistical corrections from previously overstated data and some structural headwinds, such as the "anti-involution" policy and the long-term slump in the real estate market. The bank anticipates a cumulative year-on-year decline in fixed asset investment from the beginning of the year to December of 3.3%.

Additionally, retail sales growth may further slow to a year-on-year 0.6%, reflecting a decline in automobile sales growth, as well as weak growth in home appliance sales due to a shortage of funds and diminishing effects from the home appliance replacement program.

The bank maintains its forecast that real GDP in the fourth quarter will slow from 4.8% in the third quarter to 4.5%, although exports remain resilient, domestic demand has shown signs of weakening