China Sticks With 2025 GDP Target As Investors Await Stimulus & Economic Releases
5 Min. Read Time
Key News
Asian equities were mixed overnight as India and Malaysia outperformed while Pakistan and Mainland China (Shenzhen) underperformed.
It was a relatively quiet night as value outperformed growth in China. Internet stocks were mostly lower except for Meituan, a significant recipient of Southbound Connect buying by Mainland investors.
China’s Politburo meetings have so far resulted in little new stimulus measures to move markets, though we expect more clarity in the coming days and we know that the meetings have been highly economy-focused. However, there are indications of a potential cut to the reserve requirement ratio (RRR), when the time is right.
AI plays were higher overnight after the Politburo indicated more support for the industry. Tourism stocks were also outperformers on talk of increased tax rebates for foreign visitors to China.
Temu, PDD Holdings’ international E-Commerce app, has introduced new levies for US customers to offset tariff impacts. It is reported that, in some cases, the levy is higher than the value of the items purchased. Meanwhile, prices for goods on fast-fashion giant Shein’s platform have more than tripled for US-bound purchases.
Trump’s team said that preliminary details of trade agreements to lower tariffs on 18 countries could begin to be released this week. Meanwhile, Trump said that China will not receive a tariff reprieve until they offer “something substantial” in return. China continues to deny that the two sides have begun negotiations.
China reiterated its continuing faith that it can reach its 2025 GDP target. This implies stimulus to offset the tariff impact. How much exactly and in what form it will come remain to be seen. Bloomberg reported that 2.3% of China’s GDP will be targeted by US tariffs, due to the US export exposure of the economy. Many would be surprised that it will only be 2.3%. This is precisely the number that we have been focusing on and why we believe China is relatively confident in its position going into negotiations.
The People’s Bank of China (PBOC) left the medium-term lending facility rate (MLF) unchanged overnight, which weighed on real estate, while President Xi travelled to Shanghai to meet with bank leaders. This week, starting Tuesday night, we will have economic data points coming out for China from April, including PMIs, which are likely to reflect front-loading of purchase orders ahead of tariffs.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0% |
| Hang Seng Tech | HSTECH Index | 0.1% |
| Hong Kong Turnover | HKTurn Index | -18.7% |
| Hong Kong Short Sale Turnover | HKSST Index | 6.2% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 16% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -40 |
| China (Shanghai) | SHCOMP Index | -0.2% |
| China (Shenzhen) | SZCOMP Index | -0.9% |
| China (STAR Board) | Star50 Index | -0.2% |
| Mainland Turnover | .chturn Index | -5.1% |
| Nouthbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.2% |
| Japan | NKY Index | 0.4% |
| India | SENSEX Index | 1.3% |
| Indonesia | JCI Index | 0.7% |
| Malaysia | FBMKLCI Index | 0.8% |
| Pakistan | KSE100 Index | -1.5% |
| Philippines | PCOMP Index | -0.3% |
| South Korea | KOSPI Index | 0.1% |
| Taiwan | TWSE Index | 0.8% |
| Thailand | SET Index | 0% |
| Singapore | STI Index | -0.3% |
| Australia | AS51 Index | 0.4% |
| Vietnam | VNINDEX Index | -0.2% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 94 | |
| Advancing Stocks | 38 (Hang Seng) | 106 (CSI 300) |
| Declining Stocks | 37 (Hang Seng) | 191 (CSI 300) |
| Outperforming Factors | Value, Large Caps | Value, Large Caps |
| Underperforming Factors | Small Caps, Growth | Small Caps, Growth |
| Top Sectors | Industrials, Utilities, Financials | Utilities, Financials, Consumer Staples |
| Bottom Sectors | Real Estate, Health Care, Information Technology | Real Estate, Consumer Discretionary, Communication Services |
| Top Subsectors | Consumer durables, Consumer services, Environmental Protection | Steel, Banks, Highways |
| Bottom Subsectors | Construction materials, Automobiles & Components, Coal | Household Products, Forest Industry, Real Estate Developers |
| Southbound Connect Buys | Akeso, Meituan, China Shenhu | N/A |
| Southbound Connect Sells | Alibaba, Tencent, Xiaomi | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 152 | -0.09 |
| Communication Services | 9 | -0.14 |
| Consumer Discretionary | 30 | -0.07 |
| Consumer Staples | 13 | -0.6 |
| Energy | 7 | -0.47 |
| Financials | 23 | 0.59 |
| Health Care | 13 | -1.99 |
| Industrials | 19 | 0.97 |
| Information Technology | 10 | -0.68 |
| Materials | 10 | 0.09 |
| Real Estate | 6 | -2.05 |
| Utilities | 12 | 0.77 |
| Mainland China Listed | 432 | -0.34 |
| Communication Services | 9 | -1.11 |
| Consumer Discretionary | 31 | -1.32 |
| Consumer Staples | 27 | -0.09 |
| Energy | 16 | -0.63 |
| Financials | 63 | 0.11 |
| Health Care | 40 | -0.92 |
| Industrials | 69 | -0.37 |
| Information Technology | 85 | -0.58 |
| Materials | 68 | -0.33 |
| Real Estate | 7 | -2.92 |
| Utilities | 17 | 0.77 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 0 |
| Alibaba HK | 9988 HK Equity | -0.3 |
| JD.com HK | 9618 HK Equity | 2.2 |
| NetEase HK | 9999 HK Equity | -0.8 |
| Yum China HK | 9987 HK Equity | -0.3 |
| Baozun HK | 9991 HK Equity | 0 |
| Baidu HK | 9888 HK Equity | -0.8 |
| Autohome HK | 2518 HK Equity | -0.1 |
| Bilibili HK | 9626 HK Equity | -0.5 |
| Trip.com HK | 9961 HK Equity | 0 |
| EDU HK | 9901 HK Equity | 0.6 |
| Xpeng HK | 9868 HK Equity | -0.9 |
| Weibo HK | 9898 HK Equity | -0.4 |
| Li Auto HK | 2015 HK Equity | 1.6 |
| Nio Auto HK | 9866 HK Equity | -0.3 |
| Zhihu HK | 2390 HK Equity | -0.2 |
| KE HK | 2423 HK Equity | -2.8 |
| Tencent Music Entertainment HK | 1698 HK Equity | 0.2 |
| Meituan HK | 3690 HK Equity | 0.6 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| MEITUAN-CLASS B | 0.6 |
| ALIBABA GROUP HOLDING LTD | -0.3 |
| TENCENT HOLDINGS LTD | 0 |
| BYD CO LTD-H | -4 |
| AKESO INC | -11.8 |
| POP MART INTERNATIONAL GROUP | 12 |
| XIAOMI CORP-CLASS B | -0.4 |
| BRIGHT SMART SECURITIES AND | 82 |
| JD.COM INC-CLASS A | 2.2 |
| SEMICONDUCTOR MANUFACTURING | 0.8 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TALKWEB INFORMATION SYSTEM-A | 3.2 |
| BYD CO LTD -A | -2.9 |
| GREE ELECTRIC APPLIANCES I-A | 2.9 |
| SUNGROW POWER SUPPLY CO LT-A | 6.4 |
| CAMBRICON TECHNOLOGIES-A | 3 |
| EOPTOLINK TECHNOLOGY INC L-A | -4.2 |
| MERIT INTERACTIVE CO LTD-A | 3.8 |
| CONTEMPORARY AMPEREX TECHN-A | -0.7 |
| EAST MONEY INFORMATION CO-A | -0.7 |
| LAKALA PAYMENT CO LTD-A | -0.3 |
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.29 versus 7.29 Friday
- CNY per EUR 8.29 versus 8.29 Friday
- Yield on 10-Year Government Bond 1.65% versus 1.66% Friday
- Yield on 10-Year China Development Bank Bond 1.69% versus 1.70% Friday
- Copper Price 0.32%
- Steel Price -0.38%
