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China wins and loses from new US tariffs Chinese exports will become more competitive in the US once the new reciprocal tariff rates on other countries come into force next Friday – duties on most other Asian economies are rising by 5-15%-pts while those …
1st August 2025
President Trump’s latest flurry of tariffs implies that the US effective tariff rate will rise to about 17%, from 2.3% last year. That is a little higher than we assumed and so presents modest downside risks to our forecast for global GDP growth and a …
China Chart Pack (Jul. 25) …
31st July 2025
Plunge in HIBOR boosting consumption growth Hong Kong’s GDP growth surprised to the upside, expanding by a strong 3.1% y/y in Q2, up from a downwardly revised 3.0% y/y in Q1. In q/q terms the economy expanded by 0.4%. (See Chart 1.) While that's a much …
Domestic weakness weighing on growth This report was first published on Thursday 31 st July, covering the official PMIs. We added commentary on the Caixin manufacturing PMI on Friday 1st August. The PMIs suggest that China’s economy lost some momentum in …
The readout from today’s Politburo meeting strikes a less dovish tone compared with the previous meeting on economic affairs back in April and stops short of committing to any additional monetary or fiscal support. It did leave the door open to more …
30th July 2025
We spent last week in Beijing and Shanghai visiting clients. The mood in China was not as downbeat as a year ago and our sense is that many companies and residents have adapted to the new normal of slower growth. President Trump was widely perceived as …
29th July 2025
Hydro project is a drop in the fiscal ocean A fanfare about work beginning on a huge hydropower project in Tibet sent infrastructure stocks soaring this week. The series of dams will produce 300TWh of electricity annually once complete – enough to power …
25th July 2025
Our China Activity Proxy shows that China’s activity growth remains well below what official figures suggest. While industrial activity has held up surprisingly well in the face of US tariffs, the services sector has weakened substantially since the start …
24th July 2025
While China’s June trade data showed a pick-up in exports of rare earth elements (REEs), shipments remain well below pre-Liberation Day levels. A further warming of relations with the US could lead to more approvals being granted in the near-term, but …
23rd July 2025
US tariffs appear to have given renewed impetus to Chinese producers’ efforts to export to emerging markets, resulting in a widening trade surplus with the EM world in the first half of the year. But this is going to face growing headwinds, given the …
22nd July 2025
Signs of thaw, but risks remain A little over three weeks before the 90-day tariff pause agreed in Geneva is due to end, the US-China relationship is warming. Trump on Wednesday sounded positive about the prospects of an agreement on fentanyl – the …
18th July 2025
This week’s Central Urban Work Conference didn’t deliver the revival of the shantytown redevelopment scheme that helped stabilise China’s housing market a decade ago and that some had been hoping for. Policymakers appear to have concluded that any …
This page has been updated with additional analysis since first publication. Growth is weaker than official figures suggest Official GDP data came in a touch weaker in Q2. But the figures still overstate the strength of growth by around 1.5%-pts. And t …
15th July 2025
Credit growth nearing a cyclical peak The acceleration in broad credit growth last month, to a 16-month high, is a positive sign for the outlook and reduces the risk of a sharp declaration in near-term economic activity. But this tailwind looks set to …
14th July 2025
Exports set to slow again before long Growth in export values rebounded somewhat last month, helped by the US-China trade truce. But tariffs are likely to remain high and Chinese manufacturers face growing constraints on their ability to rapidly expand …
Supply-side approach has its limits Policymakers are becoming increasingly concerned about overcapacity and deflation, and are signalling a stronger intent to tackle the issue. On Wednesday, the People’s Daily ran a front-page commentary criticising the …
11th July 2025
Auto exporters in China have adapted to the EU’s tariffs on EVs by lowering export prices and focusing on vehicles that are not subject to tariffs. Even if trade restrictions were to remain in place, the extent of China’s cost advantage means that …
10th July 2025
This page has been updated with additional analysis since first publication. Rebound in core inflation likely to be short-lived Headline inflation came out of negative territory last month, with core inflation rising to its highest level in over a year, …
9th July 2025
Note: This report was first published on 8th July, when the scheme had yet to be confirmed. But the details match what was ultimately announced by the authorities on 28th July. The Chinese authorities are seemingly on the cusp of roll ing out nationwide …
8th July 2025
But China is less exposed than one might think The full details of the US-China trade “deal” that was signed last week still haven’t been made public. But the US has rolled back some measures against China in recent days, including its export controls on …
4th July 2025
Vietnam has had one of the weakest hands to play in its trade negotiations with the US. If it is confirmed that it has agreed to a 20% tariff, this isn’t a template that other countries will feel they have to follow. Instead, the key lesson for other …
2nd July 2025
PBOC turns less dovish despite deflation concerns One might have thought that fading concern about the exchange rate and growing concern about deflation would provide the perfect moment for the PBOC to step up monetary easing. But the Bank’s latest …
China is moving toward ending its decades-old system of “presales” for newly-built residential property. This would reduce risks for homebuyers. But hopes that the change would provide a material boost to home prices are likely to prove misplaced. …
1st July 2025
Momentum rebounds, but headwinds persist This report was first published on Monday 30th June, covering the official PMIs. We added commentary on the Caixin manufacturing PMI on Tuesday 1st July and Caixin services and composite PMIs on Thursday 3 rd …
30th June 2025
China Chart Pack (June 25) …
27th June 2025
Détente is on shaky foundations The understanding reached between the US and China during talks in Geneva and London has now been formalised, with the White House revealing that a written agreement was signed off two days ago. US officials have confirmed …
Overview – Exports would almost certainly have weighed on China’s growth whatever happened this year, but US tariffs – even at their reduced rate – will worsen the drag. Fiscal support has been propping up domestic demand but will provide less of a …
25th June 2025
Our China Activity Proxy suggests growth slowed further in May, with US tariffs weighing on industrial activity. While services growth did pick up, that seems to have been driven by a temporary boost from the consumer goods trade-in scheme. We expect …
24th June 2025
Europe is taking Trump’s side on China When President Trump returned to office, his aggressive treatment of traditional allies raised the possibility that the EU and China would come together in defence of free trade. But the opposite is happening: US …
20th June 2025
Consumption holds up, but broader economy still fragile The US-China trade truce was not enough to prevent a broader loss of economic momentum last month. With tariffs set to remain high, fiscal support waning and structural headwinds persisting, growth …
16th June 2025
Beijing continues to prioritise investment The State Council released another policy document this week promising to “further guarantee and improve people’s livelihoods.” But this latest pledge to support households is once again empty. The government has …
13th June 2025
The overnight strikes by Israel on Iran mark a major escalation in the conflict in the region and, with the oil market tighter than it was a few months ago, the risks to oil prices look more balanced than we’d previously thought (rather than skewed to the …
Private demand continues its decline Bank loan growth continued to slow last month, but broad credit growth held steady, thanks to the continued strength of non-bank borrowing. With deflation keeping real lending rates elevated, despite the recent small …
A deal with China is done, according to President Trump, but its scope seems to be limited to easing some recent non-tariff restrictions, including China’s rare earth export controls. The wider trade and economic issues that were supposed to be the focus …
11th June 2025
US tariffs start to weigh on overall exports The slowdown in export growth in May should partially reverse this month, as it reflects the drop in US orders before the trade truce, which took time to feed through to actual shipments. But with tariffs …
9th June 2025
Overcapacity set to keep China in deflation Headline inflation remained in negative territory last month but core inflation continued to recover and is now at its highest in almost a year. This improvement looks fragile, however, and we still think …
Xi finally talks to Trump Yesterday’s phone call between the Chinese and American heads of state reduces the immediate risk that the Geneva truce breaks apart but doesn’t make a more permanent reduction in tensions more likely. Based on what the two sides …
6th June 2025
China is mounting a push for global technological leadership by deploying industrial policy on a huge scale. Judging by how competitive many Chinese firms now are at the cutting edge, the effort is succeeding in many areas. But, according to Xi Jinping, …
2nd June 2025
Domestic weakness weighing on growth This report was first published on Monday 2 nd June, covering the official PMIs . We added commentary on the Caixin manufacturing PMI on Tuesday 3 rd June and Caixin services and composite PMIs on Thursday 5 th June. …
China Chart Pack (May 25) …
30th May 2025
US tariffs on China likely to remain high Just a day after the US Court of International Trade ordered the removal of Trump’s Liberation Day and fentanyl-related tariffs, a federal appeals court put that ruling on hold. If the appeals court upholds the …
This report is part of our Future of Europe series. Read more analysis, explore the supporting data, and learn about our broader European coverage on the dedicated Future of Europe page. Europe is being buffeted by geopolitical and geoeconomic shifts but, …
Update: On 31st July, the Trump Administration announced that transshipped goods will be subject to a 40% tariff instead of the regular reciprocal rates and that this will stack on top of any other tariffs applicable to the true country of origin. In …
29th May 2025
In this Update, we answer several key questions about how the US Court of International Trade (CIT) tariff ruling might affect the US and other economies. The outlook may now rest on the decision of the Republican-stacked Supreme Court. The upside risks …
Our China Activity Proxy suggests that the economy’s growth slowed in April. But, so far, US tariffs seem to have had a bigger impact on consumer sentiment than industrial activity, with rerouting and renminbi depreciation helping to offset the fall in …
28th May 2025
Fewer exports to US but more to other markets Chinese exports have so far held up much better than many had feared in response to US tariffs. In dollar terms they expanded a robust 8.1% in April . And there are few signs of weakness this month. Growth in …
23rd May 2025
PBOC’s easing will confer only marginal benefits Today’s reductions to both the one-year and five-year Loan Prime Rates (LPR) probably won’t be the last this year. But rate cuts are likely to remain modest as the PBOC appears to think they could hinder …
20th May 2025
Trade war starts to take its toll After an improvement in March, China’s economy looks to have slowed again last month, with firms and households turning more cautious due to the trade war. While the recent US-China tariff de-escalation will alleviate …
19th May 2025
We still expect a slowdown this year The tariff de-escalation agreed at the start of this week is good news for Chinese exporters who were facing a collapse in exports to the US. But we haven’t changed our growth forecasts for China’s economy for a few …
16th May 2025
