Deutsche Bank expects policy support, services boom to lift China's economy

Deutsche Bank expects stronger policy support and lower oil prices to bolster China's domestic demand, particularly in the services sector, helping sustain economic growth in the second half of 2026.

The bank maintains its forecast of 4.7 percent GDP growth for the year, within the government's target range of 4.5-5 percent, said Xiong Yi, chief economist for China at Deutsche Bank.

Xiong said China's long-term competitiveness will increasingly be driven by technology, artificial intelligence and advanced manufacturing as more college students choose science and engineering over business majors.

He also highlighted recent government measures to stimulate services consumption, including longer holidays, expanded leave, support for elderly care and childcare subsidies. Combined with continued policy backing, these initiatives are expected to make services spending a key engine of consumer demand and economic growth over the next five to 10 years.

Huang Qi contributed to this story.