Citi expects China to step up policy support for domestic demand in H2

China is expected to step up efforts to bolster domestic demand and consumption in the second half of the year, with additional policy measures likely to be introduced in the third and fourth quarters, according to Citi.

Yu Xiangrong, chief China economist at Citi, said policymakers are likely to focus on raising household incomes and repairing household balance sheets to boost consumption.

"We need to see more systematic measures to strengthen household confidence, which in turn will support consumption," Yu said, adding that stabilizing the property market will be crucial to restoring household wealth.

He also called for stronger direct support for households, including scaled up childcare subsidies, more effective implementation of consumer trade-in programs, and greater support for young people and workers in flexible forms of employment.

Huang Qi contributed to this story.