JP Morgan Private Bank expects China's GDP growth rate to be around 4.3% this year and does not anticipate a significant adjustment to policy interest rates

Looking ahead to 2026, JPMorgan Private Bank believes that policy and economic growth paths across Asia may diverge, leading to a diversified market landscape. Among them, JPMorgan Private Bank's global investment strategist Chen Weiheng expects China's real GDP growth rate in 2026 to be around 4.3%, with a growth range estimated between 4.1% and 4.6%, a decline compared to 2025, mainly due to a high base for export growth. On the policy front, moderate support is expected to be maintained, with a fiscal stance likely to remain expansionary, keeping the budget deficit around 4% of GDP and obtaining additional support through policy banks and local government debt management mechanisms.

Chen Weiheng pointed out that the trajectory of the Chinese economy may continue the current trend, but overall should trend towards "returning to normal." The structural imbalance in the driving forces of China's economic growth remains prominent. In the context of a persistently sluggish real estate sector, even if export performance reaches new highs, trends of weak consumption and low investment willingness may continue.

He believes that the People's Bank of China is likely to continue adopting precise control strategies, seeking a balance between stabilizing growth, preventing inflation, and maintaining banking profitability. It is expected that policy interest rates will not be significantly lowered, and he believes the central bank may rely more on liquidity operations and adjustments to the reserve requirement ratio.

Additionally, he expects that major consumer stimulus policies will continue to be implemented in 2026, but given the gradual decline in the effectiveness of previous subsidies, the scale may be reduced in the future. It is estimated that there may be consumption subsidies targeting the service industry and resident transfer payment projects; however, fundamentally, the main factors constraining resident consumption are the weak labor market and income growth expectations. Due to limited policies targeting the job market, and some industrial policies aimed at reducing capacity, the outlook remains highly uncertain