ECONOMY

China Growth Cools as Policy Timing Drives Cycles, UBS Economist Says

Published: May. 21, 2026 5:31 p.m. GMT+8

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China’s economy slowed broadly after a stronger-than-expected first quarter, with activity weakening across most major indicators outside exports, highlighting a recurring pattern driven by the timing of policy implementation, according to UBS Securities Chief China Economist Song Yu.

China’s first-quarter performance beat expectations, but momentum weakened in April, continuing a pattern seen in recent years in which strong first-quarter data are followed by second-quarter slowdowns.

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China's economy slowed broadly after a stronger-than-expected first quarter, with activity weakening across most major indicators outside exports.
UBS economist Song Yu cites a recurring pattern tied to policy sequencing: support measures in Q4 boost Q1, then momentum fades as focus shifts to risk control and debt management.
Song recommends earlier policy easing, noting room for interest rate cuts and property-sector easing, with timing as the key issue.

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Who’s Who

UBS Securities: UBS Securities Chief China Economist Song Yu noted that China's economy slowed after a strong Q1, following a pattern tied to policy timing. He highlighted that support measures often come in Q4, boosting early-year growth, then fade. Song sees room for rate cuts and property easing, with timing being the key issue.

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What Happened When

2026 (ongoing)：: The 15th Five-Year Plan (2026–2030) began, with strong exports and early project starts supporting growth, though the subsequent slowdown was sharper than seasonal patterns suggest.

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