China Three things in China

Economics Research 13 September 2026 | 10:53PM HKT

Three quick highlights from China: Hui Shan | Goldman Sachs (Asia) L.L.C. n Trade surplus increased again: China’s trade growth accelerated from July to August in year-over-year terms. Exports rose 24.9% yoy in nominal USD terms and imports grew 28.2%, lifting the trade surplus to $119bn. In the first eight months of the year, China’s trade surplus totaled $806bn, $24bn higher than in the same period last year. This is remarkable given that China is a net oil and semiconductor importer, and that oil and semiconductor prices have climbed significantly this year.

Chinese exports continued to increase in August

Source: China Customs, Goldman Sachs Global Investment Research

n Inflation ticked up: Both CPI and PPI inflation increased in August: CPI inflation rose from 0.5% in July to 0.8% in August, while PPI inflation increased from 3.5% to 3.8%. Details beneath the headlines do not suggest strong demand, however. Much of the increases can be attributed to higher energy prices, higher computer and communication equipment prices amid the AI boom and chip shortages, and higher prices for other commodities such as gold. Rent CPI and car prices continued to decline in August (rent inflation -0.6% yoy and car price inflation -1.6% yoy).

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Headline CPI inflation ticked up on higher energy prices

Percentage Percentage 6 6 Year-over-year Headline CPI Inflation 5 Core 5 Food 4 Energy 4

Source: NBS, Goldman Sachs Global Investment Research

n Capital injection mostly about financial stability: The Ministry of Finance announced the issuance of RMB300bn in Central Government Special Bonds (CGSB) for the recapitalization of select commercial banks, policy banks, and insurance companies. This is not new news, as the quota was approved at the March “Two Sessions”, following last year’s RMB500bn CGSB issuance for commercial bank recapitalization. With the deep housing downturn and multi-year economic slowdown, losses need to be recognized in the financial system even if a financial crisis is averted. According to PBOC data, the number of banks in China declined from 4,602 in 2021 to 3,619 in 2025. As smaller, weaker regional banks are absorbed by larger banks, capital injection is needed to ensure financial stability among large SOE financial institutions.

The number of banks declined by over 20% in China from 2021 to 2025

Number Number 5000 5000 Number of banks in China 4800 4800

3000 3000 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 Jun-25

Recent GS China macro research

Asia in Focus: China: Gauging the Impact of Government Bond Supply on Bond Yields, 13 September 2026

Asia in Focus: China: Property Downturn Keeps Straining Local Government Finances, 7