Goldman Sachs China: Three Things in China
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Goldman Sachs highlights three key developments in China. First, March fiscal expenditure growth slowed to 1.0% year-on-year, down from 3.6% in January-February, despite revenue growth accelerating from 0.7% to 6.9%. The spending deceleration likely reflects timing distortions from the Lunar New Year, increased off-budget spending, and a deliberate policy pace adjustment following robust early-year data. The bank's estimated augmented fiscal deficit, on a three-month moving average basis, narrowed slightly.
Second, the bank maintains low expectations for the upcoming April Politburo meeting, anticipating no additional easing measures beyond what was outlined at the Two Sessions. With first-quarter real GDP growth tracking near the upper bound of the 4.5-5.0% annual target, policymakers are likely to focus on execution and risk management while awaiting greater clarity on Middle East dynamics. Officials are expected to express heightened concern regarding global energy shocks and geopolitical uncertainties.
Third, the State Council released guidelines targeting RMB 100 trillion in total services sector output by 2030. This implies average nominal growth of 4.3% during the 15th Five-Year Plan period, a notable deceleration from the 6.5% annual pace recorded between 2019 and 2025. The guidelines emphasize equal focus on producer and consumer services, consistent with China's long-term strategic shift from construction and real estate toward manufacturing and business services.