UBS China Economics Expert Call Series #1: Economic Resilience
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UBS Chief China Economist Tao Wang highlights the resilience of China's macroeconomic fundamentals in 2026, supported by robust exports and improving domestic demand. Deflationary pressures are easing, while financial and geopolitical conditions remain relatively stable. Although April data slowed due to policy tightening, Wang expects looser policies to drive an economic rebound.
A structural transition is underway in commodity demand, shifting from traditional construction steel toward new infrastructure and energy transition metals like copper and aluminum. The property market remains weak but shows early signs of stabilization in transaction volumes and sentiment. However, policy aims to stabilize rather than stimulate the sector, meaning a recovery will likely be uneven and concentrated in tier-one cities.
Infrastructure investment is projected to strengthen compared to last year, driven by the new Five-Year Plan and the six-network concept, which targets energy, grids, and logistics. Execution risks persist at the local level due to debt constraints. Consumption should remain healthy but may slow year-over-year as the diminishing effects of subsidies and structurally high savings rates weigh on growth. Exports surged roughly 15% year-over-year early in 2026, with policymakers gaining confidence from the stable macro backdrop.