China’s GDP Hits All-Time High & Trump Tariff Threats Weigh On Risk Assets
6 Min. Read Time
Key News
Asian equities were lower, as India underperformed after a similar move yesterday, as President Trump’s EU tariff threat weighed on risk assets.
The Renminbi (CNY) hit another 52-week high versus the US dollar, closing at 6.96. The key point is that there are two Chinas from an equity investment perspective: Onshore China (Shanghai, Shenzhen, and the STAR Board) and Offshore China (Hong Kong and US ADRs).
Efforts to tap the brakes on the onshore rally, as evidenced by large redemptions in Mainland-listed ETFs, affect onshore China. For the last six days, the Mainland market has been flat. So, policymakers don’t want to kill the rally but would prefer a slow-and-steady one.
Offshore China is not a focus for policymakers, though Southbound Stock Connect inflows have slowed. Combined with slowing foreign flows, the offshore market has slowed over the last few months. Those foreign flows, like growth stocks such as internet stocks, explain why those names are off their highs.
Bytedance’s entry into cloud computing was a factor in Alibaba’s -3.49% decline yesterday. The SAMR investigation of Trip.com is exceedingly poorly timed, in my opinion, as it raises foreign investors’ concerns at a time when they are looking for growth opportunities, including in Hong Kong and Mainland China.
Hong Kong’s robust IPOs are more supply, which is a small factor, as eleven Hong Kong IPOs year-to-date (YTD) have raised $4B, according to the South China Morning Post. Ultimately, this correction, while not fun by any stretch, is healthy. Value stocks outperformed in both Mainland China and Hong Kong, while growth names were weaker, as tariff fears weighed on pharmaceuticals and technology hardware stocks.
Internet names were off again following yesterday's steep decline, an indication that foreign investors are taking a risk-off stance amid Trump’s chaos. It is worth noting that, in the data below, online retail sales increased by +8.6% year-over-year (YoY), though you had to dig into the data to find it. Pop Mart popped +9.07% on a buyback announcement. UB Tech gained +8.63% yesterday on an Airbus robotics order, which is interesting.
The Ministry of Finance’s Vice Minister Liao Min issued a press release announcing five loan subsidy policies to support domestic consumption and private investment. Supportive policies will “only strengthen but do not weaken”. The issuance of long-term Treasury bonds will support 14 key industries, including electric vehicles (EVs), robotics, medical equipment, and technology hardware. The National Development and Reform Commission (NDRC) stated that it will align with the Five-Year Plan by focusing on boosting domestic consumption. This follows yesterday’s symposium held by Premier Li, which was attended by a variety of participants, during which he reiterated policies supporting the 15th Five-Year Plan, including proactive fiscal policies and a loose monetary stance. Obviously, these supportive statements have no effect on equity markets, though in the medium- to long-term, they should.
Monday’s December Data Release:
- New Home Prices month-over-month (MoM) were -0.37% versus November’s -0.39%
- Used Home Prices MoM were -0.7% versus November’s 0.66%
- Q4 GDP YoY was 4.5% versus November’s 4.8% and expectations of 4%
- 2025 GDP growth year-over-year (YoY) was 5% versus 2024’s 5.2% and expectations of 5%. GDP exceeded RMB 140 trillion for the first time. See any headlines on China’s GDP hitting an all-time high? Me neither.
- December Retail Sales YoY were 0.9% versus November’s 1.3% and expectations of 1%
- 2025 Retail Sales were 3.7% YoY versus 2024’s 4%
- 2025 Online retail sales increased by +8.6% to RMB 15.972 trillion
- December Industrial Production was 5.2% versus November’s 4.8% and expectations of 5%
- 2025 Industrial Production YoY was 5.9% and 2024’s 6%
- 2025 Industrial Production YoY was -3.8% versus November’s -2.6% and expectations of -3.1%
- 2025 Residential Property Sales was -13% versus 2024’s -11.2%
- 1 and 5 Year Prime Loan Rate unchanged at 3% and 3.5% for the eighth straight month
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.3% |
| Hang Seng Tech | HSTECH Index | -1.2% |
| Hong Kong Turnover | HKTurn Index | 5.4% |
| Hong Kong Short Sale Turnover | HKSST Index | 21% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 13.8% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 467.76 |
| China (Shanghai) | SHCOMP Index | 0% |
| China (Shenzhen) | SZCOMP Index | -0.8% |
| China (STAR Board) | Star50 Index | -1.6% |
| Mainland Turnover | .chturn Index | 2.6% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -1.3% |
| Japan | NKY Index | -1.1% |
| India | SENSEX Index | -1.3% |
| Indonesia | JCI Index | 0% |
| Malaysia | FBMKLCI Index | -0.8% |
| Pakistan | KSE100 Index | 0.4% |
| Philippines | PCOMP Index | -1.3% |
| South Korea | KOSPI Index | -0.4% |
| Taiwan | TWSE Index | 0.4% |
| Thailand | SET Index | 1% |
| Singapore | STI Index | -0.1% |
| Australia | AS51 Index | -0.7% |
| Vietnam | VNINDEX Index | -0.1% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume % of 1-Year Average | 93% | 154% |
| Advancing Stocks | 274 | 2130 |
| Declining Stocks | 205 | 2895 |
| Outperforming Factors | Value, EPS Revision, Buyback | Value, Low Volatility, Dividend Yield |
| Underperforming Factors | Liquidity, Growth, Large Caps | Liquidity, Growth, Momentum |
| Top Sectors | Real Estate, Staples, Materials | Real Estate, Materials, Utilities |
| Bottom Sectors | Tech, Healthcare, Communication | Tech, Healthcare, Communication |
| Top Subsectors | Consumer Durables/Apparel, Construction Materials, Household/Personal Products | Petrochemical, Fertilizer/Pesticides, Aviation |
| Bottom Subsectors | National Defense, Tech Hardware, Pharmaceuticals | Communication Equipment, Aerospace/Military, Electronic Components |
| Southbound Connect Buys | Meituan, Tencent (Moderate), Hua Hong Semi, Pop Mart, Xiaomi (Small), Alibaba (Tiny) | |
| Southbound Connect Sells | SMIC (Moderate) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -0.38 |
| Communication Services | 11 | -1.14 |
| Consumer Discretionary | 28 | -0.28 |
| Consumer Staples | 13 | 0.98 |
| Energy | 6 | 0.06 |
| Financials | 25 | 0.51 |
| Health Care | 15 | -1.25 |
| Industrials | 21 | 0.16 |
| Information Technology | 12 | -2.37 |
| Materials | 10 | 0.84 |
| Real Estate | 7 | 2.77 |
| Utilities | 12 | 0.55 |
| Mainland China Listed | 386 | -0.15 |
| Communication Services | 8 | -0.37 |
| Consumer Discretionary | 28 | 0.19 |
| Consumer Staples | 21 | 0.2 |
| Energy | 12 | 0.57 |
| Financials | 66 | 0.6 |
| Health Care | 33 | -0.89 |
| Industrials | 57 | 0.18 |
| Information Technology | 91 | -2.19 |
| Materials | 49 | 1.29 |
| Real Estate | 6 | 2.49 |
| Utilities | 14 | 1.13 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.5 |
| Alibaba HK | 9988 HK Equity | -0.4 |
| JD.com HK | 9618 HK Equity | 0.1 |
| NetEase HK | 9999 HK Equity | -0.1 |
| Yum China HK | 9987 HK Equity | 0.6 |
| Baozun HK | 9991 HK Equity | -5.8 |
| Baidu HK | 9888 HK Equity | 0.9 |
| Autohome HK | 2518 HK Equity | -0.5 |
| Bilibili HK | 9626 HK Equity | 0.7 |
| Trip.com HK | 9961 HK Equity | 2.1 |
| EDU HK | 9901 HK Equity | -0.7 |
| Xpeng HK | 9868 HK Equity | -0.7 |
| Weibo HK | 9898 HK Equity | 0.2 |
| Li Auto HK | 2015 HK Equity | -1.1 |
| Nio Auto HK | 9866 HK Equity | -0.4 |
| Zhihu HK | 2390 HK Equity | -0.1 |
| KE HK | 2423 HK Equity | 1.9 |
| Tencent Music Entertainment HK | 1698 HK Equity | 0.3 |
| Meituan HK | 3690 HK Equity | -1.2 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -1.5 |
| ALIBABA GROUP HOLDING LTD | -0.4 |
| XIAOMI CORP-CLASS B | -2.7 |
| POP MART INTERNATIONAL GROUP | 9.1 |
| SEMICONDUCTOR MANUFACTURI-H | -3.2 |
| MEITUAN-CLASS B | -1.2 |
| CHINA LIFE INSURANCE CO-H | 4.3 |
| BAIDU INC-CLASS A | 0.9 |
| HUA HONG SEMICONDUCTOR LTD-H | -1.9 |
| TRIP.COM GROUP LTD | 2.1 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TBEA CO LTD-A | 0.9 |
| EOPTOLINK TECHNOLOGY INC L-A | -5.1 |
| ZHONGJI INNOLIGHT CO LTD-A | -3.4 |
| SHENZHEN SUNWAY COMMUNICAT-A | 4.3 |
| GUANGZHOU HAIGE COMMUNICAT-A | -6.7 |
| ZHEJIANG SANHUA INTELLIGEN-A | -1.2 |
| GOLDWIND SCIENCE & TECHNOL-A | -5.9 |
| BLUEFOCUS INTELLIGENT COMM-A | 5.1 |
| CONTEMPORARY AMPEREX TECHN-A | 0.2 |
| CHINA AEROSPACE TIMES ELEC-A | -0.8 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.95 versus 6.97 Friday
- CNY per EUR 8.16 versus 8.10 Friday
- Yield on 10-Year Government Bond 1.83% versus 1.84% Friday
- Yield on 10-Year China Development Bank Bond 1.96% versus 1.97% Friday
- Copper Price +0.59%
- Steel Price -0.64%
