Citi(US:C) 券商中国·2025-07-23 06:22Core Viewpoint - Citi Group's Chief Economist for Greater China, Yu Xiangrong, emphasizes the importance of nominal growth recovery in the second half of the year, alongside maintaining real growth momentum, which will enhance the attractiveness of Chinese assets [3]. Economic Growth Forecast - Citi has raised its GDP growth forecast for China to 5% for the year, with actual growth in the first half reaching 5.3%, providing a solid foundation for achieving the annual target [2]. Export Performance - Exports are expected to slow down in the second half due to higher base effects but are likely to continue exceeding expectations, with a forecast of mid-single-digit positive growth for the year [6]. - In the first half of 2023, China's total export value reached 13 trillion yuan, a year-on-year increase of 7.2%, with machinery and electronics exports accounting for 60% of total exports [6]. Domestic Demand Recovery - Domestic demand is anticipated to show a differentiated recovery, with varying performance across industries, but overall growth is expected to remain on track [9]. - New economic sectors such as artificial intelligence, new consumption, and innovative pharmaceuticals are increasingly contributing to overall growth [10]. Consumer Behavior - Consumer confidence is gradually improving, with demand for travel, entertainment, and experience-based consumption rising, contributing to GDP growth [12]. - The sales of certain new energy vehicles, despite higher prices, indicate that consumer purchasing power remains robust for quality products [13]. Investment Trends - New capital expenditures and service sector investments are flourishing, with AI-related investments projected to contribute approximately 500 billion yuan to GDP growth [14]. Policy Outlook - Macro policies are expected to focus on coordinated supply and demand measures, with incremental policies likely to accelerate [15]. - Fiscal policies will emphasize new measures rather than budget modifications, including enhanced trade-in policies and timely childcare subsidies [16]. Real Estate Support - New supportive policies for the real estate sector are anticipated, including potential easing of restrictions in high-tier cities and adjustments to down payment ratios for second homes [17]. Supply-Side Reforms - The focus will be on substantial actions to address low-price competition and promote the orderly exit of outdated capacities [18]. - Specific measures may include tightening financial regulations and enhancing industry standards [19]. Conclusion - A new phase of supply-side reform is expected, which, if effectively implemented alongside demand-side stimulus, could lead to price recovery and bolster market confidence [20].