The Trivium China Podcast Ep 61 - A stress test at the worst possible moment
Mar 29, 2026
Jeremy Stevens, Beijing-based China economist at Standard Bank with 16 years' experience, and Joe Peissel, Trivium's lead macro analyst, unpack recent monthly macro data. They highlight where growth is fragile, why manufacturing and services are unevenly strong, how exports and Africa ties matter, and why the Iran conflict could become a serious stress test for China’s fragile recovery.
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Manufacturing Growth Fuels A Fragile Investment Pickup
- Manufacturing is robust (manufacturing +6.6%) and concentrated in high value-added sectors like industrial equipment and electrical machinery.
- That strength has boosted investment cyclically but makes the cycle vulnerable to external shocks.
Investment Uptick May Be Seasonal And Vulnerable
- Some indicators suggest the profit recovery was largely base effects and banking liquidity is tight, so recent investment signs may be seasonal.
- Depleted excess reserves (~1.2%) and stabilised but low loan demand keep growth fragile.
Policymakers Try To Stimulate Consumption Through Supply
- Beijing aims to boost consumption indirectly via supply-side upgrades, expecting latent demand to be unlocked by better quality goods and services.
- Policy bets on industrial upgrading and services supply rather than direct demand stimulus.