China’s Recovery Hinges on Spending Smarter, Not Just More, Nomura Says

China’s economy is likely to see uneven growth in 2026, with a slow start followed by a stronger second half, according to Nomura’s chief China economist Lu Ting. He urged Beijing to prioritize fiscal support over monetary easing, arguing that the effectiveness of public spending depends more on how funds are used than on their overall size.

Speaking at a media briefing, Lu forecasted that China’s economic growth this year would likely follow a “low-to-high” trajectory, with the first half weighed down by persistent headwinds and a lack of clarity around stimulus measures. He said more concrete policy signals will probably emerge after March’s Two Sessions political meetings. By the second half, growth should gain traction, aided by a lower statistical base from late 2025.