September 24, 2025
Indeed—for any PhD studying "China Corporate Macroeconomics," this report offers nothing new. It's true that the stock market often leads macroeconomic developments, so the discrepancies we point out are merely lagging indicators. But equally true is our deep-seated belief that the Chinese macroeconomic situation will not improve in the long term, as the country faces significant challenges. Therefore, we believe this report remains relevant because it reiterates a bearish view on the macroeconomic outlook—especially given the current stock market rally.
Over the past 12 months, Chinese stocks have risen by 50%, but expected earnings per share for the next 12 months are declining.
The rise was not driven by macroeconomic factors.
Goldman Sachs: Our MAP Surprise Index (21-day average) shows that recent macroeconomic data has fallen short of market expectations.
Rise not driven by earnings
Revisions to industry profit forecasts in China over the past four weeks.
"Triple Challenge"
Goldman Sachs stated, "We remain cautious about China's real GDP growth in the medium to long term due to three challenges: demographics, debt, and de-risking. However, the accelerated adoption of AI and related productivity gains may pose some upside risks."
The PMI jump lacks support from financial conditions.
The housing price trend remains terrible.
Second-hand home prices continued to decline in August.
Weakened again
Data shows that the economy is showing signs of weakness again.
The downturn will last longer.
Demand for new homes in China is likely to remain low for an extended period.
The real estate crisis is not over yet.
Compared to global experience, China's real estate downturn is not yet fully over.
Deflationary countries
Goldman Sachs: "We expect China's CPI and PPI to be 0% and -2.8% respectively in 2025, lower than the market consensus."
Greater downside risk
Goldman Sachs points out that fiscal stimulus may bring a slight rebound, but the overall risks remain skewed to the downside.
