Goldman Sachs(US:GS) Goldman Sachs·2026-01-09 05:13Investment Rating - The report projects a real GDP growth of 4.8% for 2026, which is above the consensus expectation of 4.5% [7]. Core Insights - China's manufacturing competitiveness and rare earth controls are expected to drive export volumes growth of 5-6% annually [7]. - The current account surplus is projected to be 4.2% of GDP, significantly higher than the consensus of 2.5% [7]. - Although the property market has not yet bottomed, its negative impact on GDP growth is expected to lessen [7]. - Government consumption growth is anticipated to increase, compensating for weak household consumption in 2026 [7]. - Investment is expected to rebound from 2025 to 2026 [7]. Economic Growth - The report anticipates a gradual reflation process in China, with PPI inflation expected to rise from -2.6% in 2025 to -0.7% in 2026 and headline CPI inflation increasing from 0% in 2025 to 0.6% in 2026 [7]. - The fiscal deficit is projected to widen by 1.2 percentage points of GDP, reaching 12.2% in 2026 [33]. Policy Outlook - The report expects a 20 basis points cut in policy rates and a year-end USDCNY exchange rate of 6.85 [7]. - The 15th Five-Year Plan continues to prioritize manufacturing, technology, and security [7]. Investment Trends - Investment growth is expected to rebound in 2026 due to policy support and a low base effect [42]. - The report highlights that the high-tech sector is projected to contribute an average of 1 percentage point to real GDP growth over the next five years [59].