Goldman Sachs updates the China economic activity and policy high-frequency tracker, with diverging signals across consumption and mobility, production and investment, broader macro activity, and market and policy.
AI summary card
Goldman Sachs updates the China economic activity and policy high-frequency tracker, with diverging signals across consumption and mobility, production and investment, broader macro activity, and market and policy.
The report tracks Chinese economic activity with weekly high-frequency indicators: property transaction volumes remain above year-on-year levels, domestic flights continue to recover, and traffic congestion has risen, while consumer confidence, auto sales, coal use, and some port and agricultural trade indicators still indicate pressure.
- Primary housing transaction volume in 30 cities declined last week but stayed above last year, while secondary market transaction volume in 16 cities fell slightly but remained above last year.
- Domestic air passenger flights continued to increase, flight cancellation rates continued to move back toward last year’s level, and urban traffic congestion rose slightly.
- Sales of new energy vehicles and total vehicle sales improved month-over-month in June, but were still below year-on-year levels.
- Steel demand remained stable and steel output declined slightly; daily coastal coal consumption rose slightly but stayed below year-on-year.
- Official port container throughput and outbound vessel cargo volume at 20 major ports fell or edged lower last week, but remained above year-on-year levels.
- On funding conditions, interbank repo rates edged lower last week; the renminbi appreciated against the CFETS basket while remaining range-bound versus the US dollar.
Report interpretation
Overview
Goldman Sachs updated four sets of high-frequency indicators in this issue of China Economic Activity and Policy Tracker: consumption and mobility, production and investment, other macro activity, and markets and policy. The report states that to monitor more closely the impact of energy price supply shocks on Chinese economic activity, this tracker is now published weekly. Overall, some mobility, property, port, and oil demand indicators still show resilience, while consumer confidence, year-on-year auto sales, coastal coal consumption, and U.S. soybean export sales to China remain relatively weak, suggesting that economic momentum is not evenly balanced.
Core views
The central conclusion is that Chinese high-frequency economic activity shows structural divergence: property transactions and some port indicators remain above last year year-over-year, while domestic flights and traffic congestion have continued to improve, indicating partial recovery in in-person activity; however, weakening consumer confidence, auto sales still below year-on-year levels, lower coal use than last year, and still-low U.S. soybean export sales to China suggest that demand-side and trade-related areas still require close monitoring. On the market policy side, funding rates are down, overnight rates are slightly below the 7-day OMO rate, and the renminbi has strengthened against the CFETS basket but remained range-bound versus the US dollar.
Analysis framework
The report uses a high-frequency tracking framework, combining indicators such as property transactions, flights, traffic congestion, energy and chemical prices, vehicle sales, steel demand and production, coal consumption, local government special bonds, port throughput, agricultural trade, oil demand, interbank rates, exchange rates, and policy announcements to observe China’s incremental economic activity changes and year-on-year status.
Methodology notes
high-frequency economic activity tracking
Use weekly or higher-frequency indicators on consumption, mobility, production, investment, trade, financial markets, and policy to monitor marginal changes in economic activity and strength relative to last year.
traffic congestion indicator
The report uses the ratio of actual travel time to free-flow travel time as the congestion measure, with higher values indicating more congestion, and notes that data sourcing switched from Amap to Baidu in 2022, resulting in a different city sample coverage.
China oil demand nowcast
The GS Commodities team provides a high-frequency measure of Chinese oil demand using a nowcasting method; the report distinguishes between this high-frequency nowcast and a supply-demand balance estimate updated every six weeks.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- China macro assetsdirectly related
- Strengths
- High-frequency indicators cover consumption, mobility, production, investment, trade, oil demand, funding rates, and exchange rates, which can be used to gauge marginal changes in economic activity.
- Weaknesses
- The report is primarily data tracking and does not provide a full forecasting model or quantitative asset allocation recommendations.
- Comparison
- Some indicators remain above year-on-year levels, while autos, consumer confidence, coal consumption, and soybean export sales are still relatively weak, creating a mixed picture of strength and weakness.
- Risks
- High-frequency data can be volatile, and changes in data-source coverage may affect comparability.
- Renminbi exchange raterelated
- Strengths
- The report tracks CNY performance versus the CFETS basket and the US dollar, as well as the implied counter-cyclical factor in USDCNY fixing.
- Weaknesses
- No explicit exchange-rate target or trading recommendations are provided.
- Comparison
- The renminbi appreciated versus the CFETS basket but remains range-bound versus the US dollar.
- Risks
- Changes in U.S. market moves, policy expectations, and capital flow patterns could alter short-term exchange-rate behavior.
- Rates and money marketrelated
- Strengths
- The report tracks the interbank repo rate and the relationship between overnight rates and the 7-day OMO rate.
- Weaknesses
- No guidance is given on the yield curve or bond duration positioning.
- Comparison
- Interbank repo rates edged lower last week, while overnight rates were slightly below the 7-day OMO rate.
- Risks
- Liquidity injections, fiscal issuance pace, and changes in policy rates could shift funding conditions.
- Commodities and energyrelated
- Strengths
- The report covers gasoline and diesel prices, coal consumption, chemical prices, oil demand nowcast, and U.S. soybean export sales to China.
- Weaknesses
- Commodity prices and demand indicators still need to be interpreted alongside supply, inventories, and global price factors.
- Comparison
- The latest oil demand reading rose slightly to 16.6mb/d, while coastal coal consumption remains below year-on-year levels.
- Risks
- Energy price supply shocks, overseas demand, weather, and policy interventions could affect readings.
Key data
- Indicator groups tracked4 groupsConsumption and mobility, production and investment, other macro activity, and markets and policy.
- Domestic gasoline and diesel price adjustmentGasoline cut by RMB950 per tonne, diesel cut by RMB915 per tonneOn July 3, domestic gasoline and diesel prices were cut.
- New energy vehicle salesIncreased in June but still below year-on-year levelsThe report chart shows month-over-month improvement in June NEV sales, but still weak versus year-on-year.
- Total auto salesIncreased in June but still clearly below year-on-year levelsTotal auto sales also show month-over-month improvement but year-on-year weakness.
- China oil demand nowcast16.6mb/dThe latest reading shows Chinese oil demand rising slightly to 16.6mb/d.
- Local government special bond issuanceRMB2.12bn year-to-dateThe report states that local government special bond issuance to date this year is RMB2.12bn.
- Funding ratesInterbank repo rates edged lower last weekThe overnight rate remained slightly below the 7-day OMO rate.
- Renminbi exchange rateAppreciation against the CFETS basket and range-bound against the US dollarThe report also notes that the implied counter-cyclical factor in USDCNY fixing declined recently.
Impact & implications
The implication of these high-frequency indicators for pricing China macro assets is that activity is not improving in one direction only; instead, mobility and some physical activity measures are recovering while demand and confidence remain relatively weak. For policy monitoring, the allocation of local government bond financing, liquidity corridor, funding prices around the OMO rate, and major macro policy announcements remain key clues to gauge the degree of counter-cyclical policy support. For markets, property, autos, steel, coal, oil, the renminbi exchange rate, and the rate curve are all likely to be affected by these marginal changes.
Risks
- High-frequency indicators can be affected by seasonality, weather, holidays, and data-source switching, so single-week changes should not be over-extrapolated.
- Weaker consumer confidence and continued year-on-year softness in auto sales may indicate that domestic demand recovery is not yet stable.
- Lower coal consumption than last year may suggest that industrial or power demand remains under pressure.
- Persistently low U.S. soybean export sales to China may reflect uncertainty in trade, pricing, or procurement pacing.
- Funding rates, exchange rates, and policy announcements are sensitive to market expectations, and asset responses could be swift if policy pace changes.
What to watch
- Whether primary and secondary property transaction volumes continue to stay above year-on-year levels.
- Whether domestic flight volume, cancellation rates, and traffic congestion continue to improve.
- Whether consumer confidence and year-on-year recovery in post-June vehicle and NEV sales persist.
- Whether steel demand, steel output, and coastal provincial coal consumption show synchronized improvement.
- Local government special bond issuance and use of proceeds, especially spending on municipal construction and industrial parks.
- Port container throughput, outbound vessel cargo volumes, and U.S. soybean export sales to China.
- Whether China oil demand nowcast remains above 16.6mb/d.
- The relative position of interbank repo and overnight rates versus the 7-day OMO rate, along with renminbi movements against the CFETS basket and US dollar.
- The persistence and implementation strength of major macro policy announcements since May.