Week in Review

• Asian equities were mostly higher this week as India outperformed and Hong Kong outpaced Mainland China, rebounding on the US’ announcement that electronics would be exempted from China tariffs and stimulus expectations.
• China experienced stronger-than-expected growth in Q1 gross domestic product (GDP), March credit (aggregate financing in RMB terms), and March retail sales, according to data releases this week, though imports declined by more than expected, mostly driven by commodity price movements.
• Mainland investors continued their strong net buying of Hong Kong stocks this week, pouring a total of $2.9 billion into the market.
• Electric vehicle battery maker CATL reported a preliminary net profit increase of +32% for the first quarter of 2025.
• We published an article this week addressing the rumors that China stocks could be delisted from US exchanges.

Key News

The handful of Asian markets that were not closed for Good Friday were higher despite a stronger US dollar overnight, as Japan, India, and Malaysia outperformed, and Mainland China underperformed.

President Trump’s comments yesterday that US tariffs on imported goods from China would slow consumer demand due to high prices was widely featured in Mainland media. While some locals interpreted the comments as a crack or at minimum an acknowledgement of the retail demand destruction coming, the US Trade Representative announced that shippers from China utilizing China-made made ships will be charged $50 per ton starting in six months with an additional $30 a ton added each year, while non-China shippers utilizing said ships would also face new fees. The Wall Street Journal noted the decision was announced despite “sharp criticism from a raft of industries that warned of devastating costs to consumers and businesses”.

Pinduoduo’s TEMU and fast fashion retailer Shein announced their prices will increase on April 25^th, due to tariffs. The price hike tsunami is on the horizon, so hopefully the US and China can negotiate, as President Xi is back from his trip to Vietnam, Malaysia, and Cambodia. Time to put China’s new trade minister to work!

Mainland markets had a lackluster day, as investor sentiment continues to be concerned by the trade war, as the International Monetary Fund (IMF) warned of the risks to the global economy due to the US tariffs. Several of the ETFs favored by China’s “National Team”, or investment firms associated with sovereign wealth, had very strong volumes going into the close, which lifted markets.

Premier Li and the State Council stated they will focus on “stabilizing the stock market and promoting the steady and healthy development of the real estate market." Historically, it is very rare for the top leaders of the government to mention the stock market, which makes today’s price action disconcerting. The market sentiment needs a boost from further policy measures as talk is cheap.

The Ministry of Finance (MoF) announced that the Q1 general public budget expenditure increased by +4.2% year-over-year (YoY), though the national tax revenue was down -3.5% YoY.

Delivery companies face new regulations, including using requirements to use more recyclable and/or degradable packaging.

Sunday’s announcement on the Loan Prime Rate should be interesting as the 5-year rate determines real estate mortgage rates. Time to push the button!

Yesterday, delivery giant SF Holdings announced that March revenues increased by almost 10% YoY.  In comparing SF’s revenue to E-Commerce companies, including Alibaba, JD.com, PDD, and Vipshop, there appears to be a high correlation in their revenue, other than Vipshop. More deliveries mean more packages ordered. Hopefully, this is a good signal for Q1 financial results from these companies!

Last Night’s Performance

Country/Index	Ticker	1-Day Change
China (Hong Kong)	HSI Index	Closed
Hang Seng Tech	HSTECH Index	Closed
Hong Kong Turnover	HKTurn Index	Closed
HK Short Sale Turnover	HKSST Index	Closed
Short Turnover as a % of HK Turnovr	N/A	Closed
Southbound Stock Connect Net Buy/Sell (US $ Millions)	Closed	230.5
China (Shanghai)	SHCOMP Index	-0.1%
China (Shenzhen)	SZCOMP Index	0%
China (STAR Board)	Star50 Index	-0.8%
Mainland Turnover	.chturn Index	-8.5%
Nouthbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	Not Available
Jing Daily China Global Luxury Index	CHINALUX Index	0%
Japan	NKY Index	1%
India	SENSEX Index	2%
Indonesia	JCI Index	Closed
Malaysia	FBMKLCI Index	1.1%
Pakistan	KSE100 Index	0.4%
Philippines	PCOMP Index	Closed
South Korea	KOSPI Index	0.5%
Taiwan	TWSE Index	0.3%
Thailand	SET Index	0.8%
Singapore	STI Index	Closed
Australia	AS51 Index	Closed
Vietnam	VNINDEX Index	0.2%

MSCI China All Shares Index	# of Stocks	Average 1-Day Change (%)
Mainland China Listed	432	-0.07
Communication Services	9	0.36
Consumer Discretionary	31	-0.48
Consumer Staples	27	-0.91
Energy	16	-0.43
Financials	63	0.7
Health Care	40	-0.63
Industrials	69	-0.17
Information Technology	85	-0.03
Materials	68	-0.1
Real Estate	7	0.15
Utilities	17	0.09

Shanghai and Shenzhen's Most Heavily Traded by Value	1-Day Change (%)
TALKWEB INFORMATION SYSTEM-A	3.2
VICTORY GIANT TECHNOLOGY -A	6.2
ZTE CORP-A	3.9
EAST MONEY INFORMATION CO-A	1.1
ZHEJIANG HAIKONG NANKE HUATI	6
HONGBAOLI GROUP CORP LTD-A	10
SHIJIAZHUANG CHANGSHAN BEI-A	5.1
KWEICHOW MOUTAI CO LTD-A	-0.3
YONGHUI SUPERSTORES CO LTD-A	-4.6
LUXSHARE PRECISION INDUSTR-A	1.7

Last Night’s Exchange Rates, Prices, & Yields

• CNY per USD 7.30 versus 7.30 yesterday
• CNY per EUR 8.31 versus 8.30 yesterday
• Yield on 10-Year Government Bond 1.65% versus 1.65% yesterday
• Yield on 10-Year China Development Bank Bond 1.69% versus 1.69% yesterday
• Copper Price +0.20%
• Steel Price -0.42%