China Chart Pack (July 26)

At around 3.2% y/y, China’s growth in Q2 was over 1%-pt weaker than official figures suggest. But growth has held steady in the face of the Iran war. Exports have continued to surge, largely driven by strong AI-related demand. And, with households seemingly shifting their spending away from goods, services sector activity is recovering. The budget for 2026 suggests that fiscal spending should ramp up significantly over the rest of the year. Provided local governments make full, productive use of their budgets, that should boost growth over Q3 and Q4.