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ABN Amro Sees More China Targeted Support to Safeguard GDP Growth in 2026

BY MT Newswires | ECONOMIC | 12/03/25 09:22 AM EST

09:22 AM EST, 12/03/2025 (MT Newswires) -- China's PMIs for November, published over the past couple of days, confirm a further weakening in growth momentum, on balance, said ABN Amro.

To start with the manufacturing side, the official index published by NBS on Sunday rose modestly to 49.2, from October's 49.0, but a bit less than expected, with consensus at 49.4, wrote the bank in a note. This marked the eighth consecutive month that this index remained below the neutral 50 mark separating expansion from contraction.

Meanwhile, the alternative manufacturing PMI -- published by RatingDog on Monday -- which had been in expansion territory throughout most of 2025, fell by 0.7 point to 49.9, the first below-50 reading in four months.

The larger NBS survey has a stronger coverage of larger, state-owned firms, while RatingDog's survey is more focused on smaller, private, export-oriented firms, pointed out ABN Amro.

All in all, the November PMIs, coupled with the latest hard macroeconomic data, paint a picture of the Chinese economy losing further steam as the year nears its end, stated the bank.

While the 2025 GDP growth target of around 5% is still within reach, ABN Amro thinks the Chinese government will add further targeted stimulus and resume piecemeal monetary easing to safeguard GDP growth in 2026.

Particularly against the background of the ongoing United States-China power play, it's unlikely that Beijing would tolerate a sharp deceleration in annual GDP growth in 2026, added the bank. In the run-up to the annual Central Economic Work Conference held later this month, Chinese authorities are said to be considering some measures to support the ailing property sector, such as mortgage subsidies for new homebuyers, income tax rebates for mortgage borrowers, and the reduction of home transaction costs.

These measures should also stem lingering risks in the financial system, as the property slump doesn't show signs of abating, according to ABN Amro.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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