Topic of the Month: Focus on China
- China’s leadership explicitly advocates for unconventional policies that include monetary easing and a more expansionary fiscal policy. However, we believe these policies will not offset the existing structural drags and US tariff impacts completely.
- We expect China’s growth to remain on a downward trend, slowing from 5.0% in 2024 to 4.1% in 2025, and 3.6% in 2026.
- In the case of aggressive US trade protectionism and export controls, China should keep its expansionary fiscal stance for longer than currently expected.
- Chinese equity will be influenced by the incoming Trump administration’s foreign policy, while additional stimulus could support Chinese markets, particularly domestic stocks. We maintain a neutral stance favouring domestic markets.
Summary
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