Our China Activity Proxy suggests that growth slowed further to just 1.3% y/y in August. This reflects lingering typhoon disruptions and continued weakness in fiscal spending, with local governments struggling to find viable investment projects. Exports remained the bright spot, continuing to perform strongly on the back of robust AI- and green-tech demand. We still expect faster fiscal spending to support growth over the rest of the year, but the risk that this boost falls short is growing.
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