China's high-frequency economic activity remains divergent, while policy signals to stabilize growth continue
AI summary card
China's high-frequency economic activity remains divergent, while policy signals to stabilize growth continue
Goldman Sachs' weekly tracker shows mixed performance across China's consumption and travel, property, production, trade, energy, and policy indicators, suggesting that the economic recovery still requires observation of policy implementation and demand improvement.
- Primary home sales in 30 cities fell last week but were slightly above the same period last year, while secondary home sales in 16 cities edged down but remained above the same period last year.
- Traffic congestion declined and Morning Consult consumer confidence softened, indicating that the recovery in consumption and travel remains unsteady.
- Steel production continued to decline, while average daily coal consumption in coastal provinces continued to rise and stayed above the same period last year.
- Port container throughput and departing cargo volumes at 20 major ports fell last week and were below the same period last year; the report notes that Typhoon Bavi may have disrupted port data.
- Interbank repo rates were broadly stable, with overnight repo rates edging higher; CNY appreciated against USD but depreciated slightly against the CFETS basket.
- Since May, policy announcements have concentrated on boosting consumption, stabilizing growth, monetary policy, investment, the new energy system, urban renewal, and employment.
Report interpretation
Overview
This report is Goldman Sachs' weekly tracker of China's economic activity and policy, updating four groups of high-frequency indicators: consumption and travel, production and investment, other macro activity, and markets and policy. The core purpose of the report is not to provide a single-asset trading recommendation, but to track marginal changes in China's economic activity through indicators such as property transactions, flight cancellation rates, congestion, energy prices, consumer confidence, steel and coal consumption, port logistics, import and export prices, oil demand, repo rates, the renminbi exchange rate, and policy announcements.
Core views
The macro picture presented in the report is one of a divergent recovery rather than broad-based acceleration. Property transaction volumes remain above the same period last year in some areas, but home prices continue to decline; consumption- and travel-related indicators are weak, and consumer confidence has fallen; on the industrial side, steel production continues to soften, while coastal coal consumption is rising; external trade and logistics indicators are disrupted and weak; in financial conditions, repo rates are broadly stable, and the renminbi has appreciated against the U.S. dollar but is slightly weaker against the basket. Meanwhile, policymakers continue to focus on boosting consumption, stabilizing growth, monetary easing, investment, and employment.
Analysis framework
The report uses a high-frequency indicator dashboard approach, classifying multiple proxies of economic activity by sector, observing weekly sequential changes and relative levels versus the same period last year, and combining these with a timeline of policy announcements to assess the macro policy stance. Indicators cover property transactions, transport and travel, energy and chemical prices, consumer confidence, industrial production, coal consumption, local government special bonds, port logistics, trade prices, agricultural trade, oil demand, inventories, repo rates, exchange rates, and policy events.
Methodology notes
Multi-indicator weekly dashboard
It captures marginal changes in economic activity and policy direction through four groups of indicators: consumption and travel, production and investment, other macro activity, and markets and policy.
China oil demand nowcast
The report states that GS nowcast provides a high-frequency gauge of demand, while GS balances is based on supply-demand estimates updated roughly every six weeks.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- China macro assetsThe report directly tracks China's economic activity and policy impulse.
- Strengths
- Frequent policy announcements, along with some support from property transactions, coal consumption, and special bond indicators.
- Weaknesses
- Consumer confidence, steel production, port logistics, and home price indicators are weak.
- Comparison
- Compared with single monthly macro data points, weekly high-frequency indicators are better suited to observing marginal changes.
- Risks
- High-frequency data may be affected by weather, data source changes, and short-term disruptions.
- Renminbi and China ratesThe report covers repo rates, overnight repo rates, the implied countercyclical factor in the USDCNY fixing, and CNY performance.
- Strengths
- Interbank repo rates are broadly stable, and CNY has appreciated against USD.
- Weaknesses
- CNY has depreciated slightly against the CFETS basket, and overnight repo rates have edged higher.
- Comparison
- FX and funding rate indicators can be cross-checked against growth and policy signals.
- Risks
- The external U.S. dollar environment, policy communication, and capital flows may alter short-term trends.
- Commodities and the energy chainThe report tracks oil demand, coal consumption, refined oil prices, chemical prices, imported energy prices, and crude inventories.
- Strengths
- Coal consumption in coastal regions continues to rise and is above the same period last year, while China oil demand remains within the high-frequency tracking framework.
- Weaknesses
- The latest oil demand reading edged down to 16.5mb/d, and visible onshore crude inventories have risen since early July.
- Comparison
- Energy indicators, together with industrial production, transport, and trade logistics indicators, jointly reflect real demand.
- Risks
- Energy price shocks, inventory changes, and differences in measurement may affect demand assessment.
- China property chainThe report covers primary home sales, secondary home sales, secondary home prices, and rental yields.
- Strengths
- Transaction volumes in some cities remain above the same period last year, and rental yields were stable from May to June.
- Weaknesses
- Primary home sales in 30 cities and secondary home sales in 16 cities both declined last week, while secondary home prices in 70 cities continued to fall in June.
- Comparison
- Slightly stronger transaction volumes and continued price declines form a divergence.
- Risks
- Falling prices, suspended data releases, and weak confidence may drag on the recovery of the property chain.
Key data
- Primary home sales in 30 citiesDeclined last week, but slightly above the same period last yearFrom Exhibit 1.
- Secondary home sales in 16 citiesDeclined slightly last week, but still above the same period last yearFrom Exhibit 2.
- Traffic congestionDeclined last weekBaidu congestion data covers 98 cities; the data source switched from Amap to Baidu starting in 2022.
- Consumer confidenceDeclined somewhat last weekUses the Morning Consult consumer confidence indicator.
- Secondary residential home prices in 70 citiesContinued to decline in JuneFrom the NBS 70-city secondary home price indicator.
- Local government special bondsRMB 2.17tn issued year to dateFrom Exhibit 14.
- Average daily coal consumption in coastal provincesContinued to rise last week and was above the same period last yearData sources include Haver and CCTD.
- Port container throughputDeclined last week and was below the same period last yearThe report says this may be related to Typhoon Bavi.
- China oil demandLatest reading edged down to 16.5mb/dFrom the Goldman Sachs commodities team's nowcast.
- Interbank repo ratesBasically stable last weekOvernight repo rates edged higher last week.
- Renminbi exchange rateCNY appreciated against USD and depreciated slightly against the CFETS basketFrom Exhibit 24.
Impact & implications
For asset allocation, the report supports continued focus on the structural differences in China's macro recovery: volume and price signals in property are inconsistent, consumer confidence and travel indicators are weak, industrial and logistics chains remain disrupted, changes in energy demand and inventories affect commodity views, and frequent policy announcements provide support for expectations of growth stabilization. In the near term, investors need to track more closely the intensity of policy implementation, whether property sales and prices can stabilize, whether logistics and external trade recover, and whether rates and FX reflect clearer easing or growth expectations.
Risks
- High-frequency indicators may be affected by short-term disruptions such as typhoons and cannot be directly equated with trend changes.
- Continued declines in property prices may weigh on household confidence and related industry chains.
- Falling consumer confidence may weaken the momentum of the consumption recovery.
- Weakness in steel production and port logistics may reflect insufficient real demand or external trade pressure.
- There are many policy announcements, but the actual pace of implementation and multiplier effects still need to be verified.
- Changes in energy prices and inventories may affect judgments on inflation, corporate costs, and commodity demand.
What to watch
- Whether property transactions can remain above the same period last year and whether secondary home prices in 70 cities can stabilize.
- Subsequent changes in consumption and travel indicators such as consumer confidence, traffic congestion, and flight cancellation rates.
- Whether steel production, coastal coal consumption, and port logistics improve in sync.
- The marginal direction of China's oil demand nowcast, crude inventories, and imported energy prices.
- The pace of issuance of local government special bonds and implementation progress of consumption-boosting policies.
- PBOC monetary policy guidance, repo rates, the implied countercyclical factor in the USDCNY fixing, and the renminbi basket exchange rate.