Several major global financial institutions have recently raised their 2025 economic growth forecasts for China, highlighting strong macroeconomic policies, vibrant market trends, and robust industrial performance.
Goldman Sachs increased its forecast by 0.6 percentage points, with UBS matching this upward revision and J.P. Morgan raising its estimate by a slightly higher 0.7 points. Analysts attribute these optimistic adjustments to the positive impact of China's series of policy measures implemented since September 2024.
"I would summarize it as a two-phase approach. From September to December last year, the focus was on monetary policy easing by the central bank. This year, we've seen the fiscal deficit ratio exceed four percent for the first time during the Two Sessions, and the scale of special bonds issued by both central and local governments has reached a historic high. This marks the second phase -- fiscal stimulus taking the lead to further boost the economy," said Zhu Haibin, chief China economist at J.P. Morgan.
China's consistent and open policies have become lasting anchors for foreign investment. By streamlining the market access negative list, pioneering innovations in free trade zone policies, expanding cross-border service trade liberalization, and refining data flow regulations, the country is breaking down institutional barriers. This commitment to openness is evident in the establishment of 18,832 new foreign-invested enterprises in the first four months of 2025, a year-on-year increase of 12.1 percent.
Zhang Ning, a senior economist at UBS, said the institution's upward revision of China's growth forecasts was primarily driven by these policies.
"The policies include deepening opening-up, improving the business and tourism environment, accelerating pilot programs for service sector liberalization, promoting Chinese enterprises' global expansion, actively diversifying overseas markets, and speeding up overseas capacity investments and mergers and acquisitions," he said.
Capital markets have reflected sustained optimism, with "smart money" from global investment banks maintaining overweight positions in Chinese equities. Since the beginning of this year, Hong Kong's IPO fund-raising surged to nine billion U.S. dollars, or an increase of 320 percent compared with the same period last year.
"We maintain an overweight recommendation on Chinese equities -- whether A-shares or Hong Kong stocks -- relative to the broader Asia-Pacific region. From a liquidity perspective, we believe AI-related trends could drive approximately over 200 billion U.S. dollars in inflows into A-shares over the next year or two," said Liu Jinjin, chief China equity strategist at Goldman Sachs.
Int'l financial institutions optimistic about China's 2025 economic growth
