J.P. Morgan Upgrades H2 China Growth View Post Yesterday's Industrial Profits Data

The US bank has upgraded its second half China GDP view post yesterday's industrial profits data, see below for more details.

• J.P. Morgan: "Looking ahead, industrial enterprise profit should improve further. On the domestic front, the series of growth-stabilization measures announced since mid-August have been incremental, but extensive, the impact of which will likely steadily feed through into the real economy in the coming months. With the stronger-than-expected August activity data, and the gradual feed-through of policy support impact on the real economy, we have revised up our 2H23 growth forecast, and our full-year growth forecast is now 5.0% for 2023 (previously: 4.8%) and 4.4% for 2024 (previously: 4.2%). Meanwhile, PPI deflationary pressure will likely ease steadily going forward, though the PPI print will likely still stay in the annual deflation zone through 1Q24.However, trade remains a major uncertainty for China, given the concerns on global supply chain relocation. Overall, although the cumulative industrial profit decline is still large, we expect the marginal improvement to continue in the near future."