China’s Trade Shows Resilience as Technology Tensions Rise and Policy Turns to Structural Support: HSBC
U.S.-China technology tensions continue to escalate, with the United States imposing additional sanctions on Chinese universities and companies and China introducing countermeasures.
U.S.-China technology tensions continue to escalate, with the United States imposing additional sanctions on Chinese universities and companies and China introducing countermeasures. Despite the tensions, the two sides have maintained high-level contact, and the overall trade relationship has remained stable.
Beijing has recently eased home-purchase restrictions and raised the maximum loan amount under the housing provident fund. Other first-tier cities are expected to follow. The policy focus is shifting toward medium- and long-term structural support.
Some commercial banks have introduced loans linked to DR001 to improve the effectiveness of monetary-policy transmission, but these products are not expected to replace the existing LPR-based lending system.
Macroeconomic data show that China’s exports and trade surplus remain resilient despite continued external disruptions. At the policy level, the focus is shifting from “protecting growth” to “promoting structural adjustment.”
HSBC’s one-line conclusion is that U.S.-China technology tensions will have a limited short-term impact, while China’s domestic-demand stimulus is shifting toward structural support and the economic fundamentals remain resilient.
The note identifies China’s real-estate sector—particularly developers and property-services companies in first-tier cities—as a potential beneficiary, along with domestic-consumption stocks. It says the market has already priced in some of the negative expectations surrounding technology tensions, while the potential follow-through from the easing of real-estate policy has not yet been fully reflected in share prices.
Key catalysts are: the extent to which other first-tier cities follow with additional real-estate measures; substantive progress in high-level U.S.-China contacts; and the scale and effectiveness of the rollout of DR001-linked loans.
Beijing has recently eased home-purchase restrictions and raised the maximum loan amount under the housing provident fund. Other first-tier cities are expected to follow. The policy focus is shifting toward medium- and long-term structural support.
Some commercial banks have introduced loans linked to DR001 to improve the effectiveness of monetary-policy transmission, but these products are not expected to replace the existing LPR-based lending system.
Macroeconomic data show that China’s exports and trade surplus remain resilient despite continued external disruptions. At the policy level, the focus is shifting from “protecting growth” to “promoting structural adjustment.”
HSBC’s one-line conclusion is that U.S.-China technology tensions will have a limited short-term impact, while China’s domestic-demand stimulus is shifting toward structural support and the economic fundamentals remain resilient.
The note identifies China’s real-estate sector—particularly developers and property-services companies in first-tier cities—as a potential beneficiary, along with domestic-consumption stocks. It says the market has already priced in some of the negative expectations surrounding technology tensions, while the potential follow-through from the easing of real-estate policy has not yet been fully reflected in share prices.
Key catalysts are: the extent to which other first-tier cities follow with additional real-estate measures; substantive progress in high-level U.S.-China contacts; and the scale and effectiveness of the rollout of DR001-linked loans.