US-China decoupling, property prices, trade outlook

The main event this week is the opening of the National People’s Congress (NPC) later today. We’ll publish our analysis of the key NPC reports once they are released.   The NPC aside, US-China tensions have dominated the headlines this week, with the latest US measures against Huawei highlighting how decoupling will not only impose near-term costs on Chinese firms but will also encourage a potentially counterproductive move to double down on industrial policy. Meanwhile, we think the official data on home prices may be painting an overly rosy picture, with sales prices reported by developers showing a much more pronounced decline. Finally, although Chinese exports will come under pressure in the coming months, the unusual nature of the current global downturn means that the impact on goods trade is shaping up to be smaller than we initially feared.