Goldman Sachs: April PMI Signals Structural Transformation; Property Policy Tailored by City

Overview

This report is a quick commentary by the Goldman Sachs Macro team on three key recent macro developments in China, primarily covering the tone set by the April Politburo meeting, April PMI data performance, and the latest developments in the real estate market. The report argues that although top leadership expressed satisfaction with early-year economic performance, high-frequency data indicates profound changes in the internal economic structure, specifically a transition from traditional construction-driven growth to manufacturing-driven growth. Policymakers will maintain strategic focus, prioritizing structural adjustments and risk prevention rather than launching large-scale comprehensive stimulus.

Core views

Policy Tone and Structural Priorities: The April Politburo meeting expressed satisfaction with year-to-date economic growth, stating key indicators were 'better than expected.' Consequently, cyclical policy will concentrate on risk management and effective implementation. The meeting reiterated structural priorities such as artificial intelligence, 'anti-involution,' and urban renewal. Regarding consumption promotion, policy may focus more on the supply side, pledging to 'expand the supply of high-quality goods and services' to boost consumption rather than providing direct demand-side subsidies. PMI Data Reveals Structural Transformation: April PMI data presented mixed signals. The official NBS Manufacturing PMI was 50.3, above the market consensus of 50.1; the unofficial RatingDog Manufacturing PMI was 52.2, above the consensus of 51.0. However, the NBS Non-Manufacturing PMI was 49.4, below the market consensus of 49.8. Notably, prior to 2024, the NBS Construction PMI consistently outperformed the Manufacturing PMI, but this trend reversed in 2026, highlighting a structural shift from construction to manufacturing. Real Estate Market: City-Specific Policies: The Politburo meeting on April 28 proposed 'striving to stabilize the real estate market.' Goldman Sachs believes this does not signal significant nationwide real estate easing. Instead, the central government will continue to allow individual cities to tailor easing measures to local conditions. On April 29, Shenzhen announced relaxed purchase restrictions. Given stronger fundamentals and increased local easing efforts, Shanghai and Shenzhen are expected to lead real estate market stabilization among tier-1 cities.

Analysis framework

The report employs a methodology combining high-frequency data tracking with policy text interpretation. First, by interpreting the Politburo meeting communiqué, it extracts policymakers' assessment of the current economic situation ('better than expected') and subsequent policy focus (risk management, structural priorities). Second, it utilizes PMI sub-indices (Manufacturing vs. Non-Manufacturing, particularly historical comparisons between Construction and Manufacturing) to verify actual changes in economic structure, pointing out the logic of structural transformation behind the data. Finally, combining specific city-level policy actions (Shenzhen), it infers the market evolution path under the central 'city-specific' framework, avoiding misinterpretation of nationwide broad-based stimulus policies.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  Supply-Side Perspective on Consumption Promotion Policy

  The research note indicates that policy tends to promote consumption by 'expanding the supply of high-quality goods and services,' reflecting an analytical shift from demand-side management to supply-side optimization, i.e., stimulating potential consumption demand by enhancing product attractiveness.

• Cycle and Sentiment FrameworkSentiment Inflection Point Analysis

  Reversal in Relative Strength of Manufacturing vs. Construction PMI

  By comparing historical trends of Manufacturing PMI and Construction PMI, a structural inflection point emerging in 2026 is identified, where manufacturing sentiment recovers relative to construction, reflecting a switch in economic growth drivers.

Key data

• April Official Manufacturing PMI50.3Above market consensus of 50.1, in expansion territory
• April Official Non-Manufacturing PMI49.4Below market consensus of 49.8, in contraction territory
• RatingDog Manufacturing PMI52.2Above market consensus of 51.0, indicating a more optimistic private survey reading

Impact & implications

For the macro economy, the report advises investors to pay attention to the structural conversion of economic drivers, gradually shifting from past infrastructure and real estate investment-driven growth to manufacturing and high-tech industry-driven growth. For the real estate market, a nationwide broad-based rally is unlikely to recur; opportunities will be concentrated in core cities with better fundamentals and faster policy relaxation (such as Shanghai and Shenzhen). On the policy front, there will be no large-scale aggregate stimulus in the short term; structural industrial policies (such as AI and urban renewal) will be the key areas of support.

Risks

• Increased external uncertainties may affect exports and manufacturing sentiment
• Real estate market stabilization progress falls short of expectations, dragging down overall economic recovery
• Slow recovery in the non-manufacturing service sector constrains employment and income growth

What to watch

• Whether other tier-1 cities like Shanghai will follow suit with similar real estate relaxation policies
• Whether the Manufacturing PMI can sustain expansion in subsequent months and consolidate its advantage over the construction sector
• The actual impact of increased supply of high-quality goods and services on consumption data