Investment Rating - The report maintains a positive outlook on China's GDP growth, with full-year real GDP growth forecasts raised to 4.7% for 2025 and 3.9% for 2026, reflecting a slight adjustment from previous estimates [21]. Core Insights - China's Q2 GDP growth was reported at 5.2% year-on-year, slightly above market consensus, driven by strong industrial production but tempered by weak fixed asset investment and retail sales [20][6]. - Industrial production saw a significant increase of 6.8% year-on-year in June, attributed to faster export growth following the US-China trade truce, particularly in the chemical and computer manufacturing sectors [13][7]. - Fixed asset investment growth slowed to 2.8% year-to-date year-on-year in June, with notable declines in property investment, reflecting ongoing challenges in the real estate sector [8][14]. - Retail sales growth decreased to 4.8% year-on-year in June, below market expectations, influenced by an earlier online shopping festival and funding shortages in consumer programs [15][8]. - The services industry output index showed a year-on-year growth of 6.0% in June, indicating resilience in the services sector despite a slight moderation from May [17][9]. Summary by Sections Economic Performance - Q2 GDP rose 1.1% quarter-over-quarter non-annualized, with year-on-year growth moderating to 5.2% from 5.4% in Q1, slightly above the consensus of 5.1% [10][20]. - The nominal GDP growth declined to 3.9% in Q2 from 4.6% in Q1, indicating a negative GDP deflator [12]. Industrial Production - Industrial production growth increased to 6.8% year-on-year in June, up from 5.8% in May, with a sequential estimate of 0.9% month-on-month non-annualized growth [13][7]. Fixed Asset Investment - Fixed asset investment growth was reported at 2.8% year-to-date year-on-year in June, with a single-month estimate of 0.8% year-on-year, reflecting a slowdown from 3.7% in May [8][14]. Retail Sales - Retail sales growth fell to 4.8% year-on-year in June from 6.4% in May, with declines across various categories including online and offline goods sales [15][8]. Services Sector - The services industry output index grew by 6.0% year-on-year in June, showing a slight decrease from 6.2% in May, with a sequential growth estimate of 0.2% month-on-month non-annualized [17][9]. Property Market - Property-related activity remained weak, with sales volume down 5.4% year-on-year in June, and new home starts declining by 9.5% year-on-year [18][11].