J.PMorganEconomicResearchNovember2025China 2026 economic outlook: More challenging than meets the eyeTingtingGeAcJiayiLiGreaterChinaEconomicResearch,GreaterChinaEconomicResearch,+85228000143+85228005229tinatina.qe@jpmorgan.comjavi.c.i@jpmorgan.comUPMorgan ChaseBankNA,HongKongUPMorgan ChaseBankN.A,HongKongTonafanaYuanGreaterChinaEconomicResearch+85228000085tongfang,yuan@jpmorgan.comJPMorganChaseBankN.A,HongKongSeethe end pages of this presentation for analyst certification and important disclosures
Global macro backdropGlobal outlookscenariosChinaGDPdeviationfromtrendGlobaloutfookscenarios,2026ChinaGDPdeviation fromtrendProbabiltiesGodiocks:15%%-pt, deviation of GDP levelTrendgrowth,inllationandpolcwralesreturnsfopre-COVIDnons八AExpansionStickyskuggish:20%Sendtrnend, tadedragsAnger, intlaton265%andratesaresiciyLosingbalance:30%Labur demandrecouplstbweaklabor supply,inlafon sficlyandpressure to hike buidsRecessionUSfalisbyitself20%35%USrecessionwithout largespalovers心心Alfalldown:15%USbreaisalongsidefinandialmarketsSGarce JIP. Morgan 20-23trendbared on 2014-19 angrowth,24-26 based on 3.75% trendSourox.JP.MorpanGlobolEconomivcsUS averagetariff rateUShyperscalercapexUS tariff rateHhyporscalerepo,actladconsonsusforecatSbn.bars labeled with percent arowdthe%observedthruAugust18%700EffectiveResting35%各2(based on theforecast2024basket)50068%1540062%200200Observed(basedon1005calculated duties)20232024202520262027Jan24Jan25Jul25Jul24Sure Buorterg.JP? Mrypn ntlutsAMZIN,G0O;,META,MNSF,andGROSauce.CensusBurea,JP.MorganIN1Jcan
Global macrobackdropRealGDPrelativetopre-pandemictrend pathGrowthforecastrevisionsRealGDP relativeto pre-pandemic potentialpathJ.P.MorganglobalGDP%6 deviationYarhgsar festydaemade,back ine s poermal3.02Q251H262.53Q252.04025EM ex-Chn心EMU0.5China0.02022Sep24Dec24Mar25Jun 25Sep2520202021202320242025Soure.JP.MoganGiobelEconomcsSource.JP.MorganGlcbadEoonamicsInflationforecastrevisionsDMpolicyratechangeJ.P.Morgan CPlForecastRevisionIndex,CentralbankpolicyratesCumdlaive %revisionto rolinyea-aheadinflation forecast(since Jan 2021)%6p.aJP.MorganUSforecastsEuroareaEuroarea------UKSwedenCanadaUsChina1202120232024201720182019202020212022023202420520020222025Source:J.P.MorganSource:JP.MorganIN1Jgan
Two key factors affecting the 2026 Chinese economy@Tarifftensions2.0underTrump2.0:Higher.broader.moredisruptiveUS-China tradeO Punitive tariff rates and tit-for-tat retaliation from Chinatensions@Are-escalation of US-China tensions, tariffs remain the key uncertaintyUS-Chin a fifth-round trade talk in Malaysia, followed by a Presidential summit at APECPolicyshiftsinceSeptember2024:Athree-arrowapproach Policv swine between cvclical and structural rebalancing. which is data-dependentPolicvshifts and@Timeinconsistencvin economic transformation15thFYP#Boostinedomesticdemand/consumotion/serviceconsumotion@Hioh.endmanufacturinaand tech eelf.eufficiencutonthe15thFVP tacke0 UInified nationalmarket and anti-involutionTN1can
Tariff tensions 2.0Tarifftensions2.0underTrump2.0arethebiaaestexternalriskforChina in2025JPM baseline assumption (Nov-2024): US tariffs on China up from 20% to 60%; tariffincrease on China'stransshipments (V...
