GLOBAL MACRO VIEWS – China pulse check

Amid changing macroeconomics, it’s worth checking in on China

China Pulse Check

The U.S. economy is slowing under the weight of prolonged tariff uncertainty, while prospects for Europe brighten amid a fiscal thrust. Despite the escalation of U.S. tariffs, China is showing signs of stabilizing, attracting investor interest alongside a robust year-to-date equity rally.

There remain reasons for caution, with U.S. tariffs coming faster and higher than anticipated, warranting a selective investment approach.

Tariff red lines temper green growth shoots

The Chinese economy has been showing tentative bright spots, supported by fiscal and monetary easing that began in late 2024. Solid Lunar New Year spending, signs of bottoming in property and equity markets and a lift to exports from front-loading ahead of tariff threats have provided further tailwinds.

Even so, the structural backdrop remains challenged due to industrial overcapacity, low confidence and worsening demographics. Sharply rising trade tensions further threaten the main engine of growth, industrial exports.

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