Citi expects more stimulus measures from China, focus on demand-side support and anti-involution

China is likely to roll out more incremental policy measures in the coming months, with a focus on boosting demand and curbing excessive market competition, Citigroup said in a research note.

The bank expects the country’s economic activity to show resilience this summer, supported by stabilizing growth momentum.

The report noted that China’s policymakers appear increasingly attentive to nominal growth—a key concern for markets—amid steady real gross domestic product expansion.

While July’s weak credit data initially raised concerns, Citigroup believes the People’s Bank of China may hold off on an immediate rate cut this month, given recent signs of improvement in exports.

However, the bank anticipates growing pressure on real growth by autumn, maintaining its forecast for a 10-basis-point rate cut and a 50-basis-point reserve requirement ratio reduction in the second half of the year.

It also expects US-China tariff risks to largely fade over the next three months.