Goldman Sachs: China — Three Things to Watch in China
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Goldman Sachs' China economics team offers three quick takes. First, government bond issuance is accelerating: 61% of the full-year Rmb11.9tn quota had already been issued, up from 56% a week earlier, and back-to-back NDRC meetings — an August 25 session on coordinating the six major networks and an August 28 national investment conference — suggest state-led investment is speeding up to support the growth target. Second, on August 28 the PBoC and the NFRA issued guidance reforming property credit: maximum mortgage tenors extend from 30 to 40 years, and mortgage disbursement for pre-sold homes is deferred until project completion to protect buyers and reduce delivery risk. Goldman views the longer tenor as a trade-off — lower monthly payments but higher lifetime interest — that may help liquidity-constrained buyers, yet with weak home-price expectations, uncertain incomes and mortgage rates still high relative to rental yields, the demand boost is likely limited.
Third, ahead of this week's official PMIs, Goldman forecasts manufacturing PMI inching up from 49.2 to 49.4 — early-quarter months tend to mark seasonal lows — while typhoon and flooding disruptions pull non-manufacturing PMI down from 49.0 to 48.8; both calls sit below Bloomberg consensus.