Goldman Sachs: China growth expectations broadly stable, while onshore and offshore investors differ on property and policy

Why are growth expectations stable but cautious?

After third-quarter GDP came in stronger than expected, 57% of respondents expect China’s growth momentum to remain broadly unchanged over the next six months, 36% expect it to slow, and only 8% expect it to accelerate.
Exports are a relatively stable source of support: against a backdrop of strong export growth so far this year, 49% expect export growth to remain broadly unchanged over the next six months. Among the remaining respondents, 34% expect a slowdown, more than the 17% who expect an acceleration.
This was Goldman Sachs’ first quarterly China macro client survey. It began on 20 October and ended on the 30th; offshore clients accounted for approximately 80% of respondents. Anonymous responses prevented Goldman Sachs from identifying each respondent’s specific investor type.

Against a backdrop of weak consumer confidence and fading policy support, 59% of respondents expect consumption growth to remain broadly unchanged over the next six months, 36% expect it to slow further, and only 5% expect a marked improvement. Goldman Sachs believes this reflects investor caution about a consumption recovery in the absence of significant policy easing.
For CPI inflation over the next six months, half of respondents expect it to remain broadly unchanged and more than a third expect it to slow, indicating continued concern about falling inflation. Among onshore respondents, 14% expect inflation to accelerate, compared with 5% offshore.

70% of respondents expect modest fiscal easing over the next six months, while 26% expect a broadly neutral stance. Goldman Sachs interprets this as investors expecting incremental support rather than the start of a large-scale, sustained easing cycle.
On whether policy rates will be cut over the next six months, respondents generally see the probability as close to fifty-fifty. Among offshore respondents, 27% consider a cut highly likely, compared with 7% onshore.
On the day the survey closed, the central bank announced a shift in its policy rate from the 7-day reverse repo rate to the overnight reverse repo rate. Goldman Sachs believes the adjustment could amount to an effective rate cut of 5 to 10 basis points.

For average residential prices in first- and second-tier cities over the next 12 months, 61% of offshore respondents expect them to remain broadly unchanged and 23% expect a decline of more than 3%. The corresponding onshore proportions are 50% and 36%, indicating greater caution about home prices.
For the renminbi against the US dollar over the next six months, 68% of offshore respondents expect an appreciation of 1% to 2%, while 15% expect it to fluctuate within 1% in either direction. The corresponding onshore proportions are 64% and 36%, making offshore expectations relatively more optimistic.

Regarding the contribution of AI applications and technological innovation to China’s growth over the next 12 months, 47% of respondents are slightly optimistic, 29% are moderately optimistic, and 11% are highly optimistic. Goldman Sachs believes optimism is concentrated at the milder end, indicating that investors recognize a positive effect but remain cautious about the scale of the near-term contribution.