Analyts at JP Morgan note that they maintain their constructive outlook on the Chinese economy, citing four key reasons.

“1. Chinese money supply is moving up ... and credit impulse is improving. This has historically been key for the Chinese activity momentum.

2. More policy stimulus is likely, in order to deliver "stability.” Our economists are looking for an acceleration in government incentives to boost infrastructure FM in 3Q, on top of the rate cuts and tax rebates seen recently.

3. The COVID situation remains highly uncertain, but there is a potential for restrictions to ease further.

4. Base effects are very easy in 2H, as 2nd half of last year has been hit by multiple shocks. This will add to the perception that the Chinese growth momentum is turning higher.”