Citigroup: If growth remains resilient and prices improve, the attractiveness of Chinese assets will further increase.

Citibank released its domestic macroeconomic outlook for the second half of 2025. Citibank's Director and Chief Economist for Greater China, Yu Xiangrong, believes that while continuing to consolidate actual growth momentum, it is both necessary and possible to focus on repairing nominal growth in the second half of the year. If growth remains resilient and prices improve, the attractiveness of Chinese assets will further increase. In terms of exports, Yu Xiangrong predicts that export growth will slow down in the second half of the year as the base rate increases, but it will not collapse. Full-year exports are expected to achieve mid-single-digit positive growth, a sharp contrast to the pessimistic market forecasts at the beginning of the year. Regarding domestic demand, Yu Xiangrong believes that domestic demand will show a differentiated recovery trend in the second half of the year, with uneven performance among industries, but overall growth will not derail. New economy sectors such as artificial intelligence, new consumption, and innovative drugs are thriving and making an increasingly larger contribution to overall growth. Yu Xiangrong notes that recent growth momentum in domestic demand has weakened, and differentiation between domestic and foreign demand has intensified. He believes that large-scale stimulus is not a policy option, but incremental policies are likely to be implemented more quickly, and policy execution will accelerate. On the supply side, attention should be focused on the substantial actions taken by the Central Finance and Economics Commission to combat "internal circulation" issues within industries.