top of page

Dragon Economy Healing ?


Since February 2024 CSI 300 Index has given a return of 15% and China's 10-year bond yield has fallen from 2.62% to 2.3% from the start of the year. This indicates that investors and corporates can see some level of recovery in the Chinese economy that is sustainable.


There have been several initiatives to ease the stress in the real estate sector from the finance and demand side. Overall bank deposits also have crossed RMB 300 Bn for the first time. All this has resulted in improvement in the service and manufacturing sector as well. 


As there are signs of reversal it is important to view this as an initial stage of recovery and as the government themselves mentioned it would be a volatile path. 


Within this, the “new products” that include EVs, solar panels and lithium-ion battery industry is facing new restrictions relating to its exports. The USA is supposed to implement new tariffs on Chinese EVs and the same might be done by Europe.


These measures along with other selective policies might prove to be a hurdle for this recovery as incremental demand becomes more volatile or unknown. That is why investors need to keep track of data and other trends to witness if the trend is about to pause in the next few months leading to a reversal in markets.

Since February 2024 CSI 300 Index has given a return of 15% and China's 10-year bond yield has fallen from 2.62% to 2.3% from the start of the year. This indicates that investors and corporates can see some level of recovery in the Chinese economy that is sustainable.


There have been several initiatives to ease the stress in the real estate sector from the finance and demand side. Overall bank deposits also have crossed RMB 300 Bn for the first time. All this has resulted in improvement in the service and manufacturing sector as well. 


As there are signs of reversal it is important to view this as an initial stage of recovery and as the government themselves mentioned it would be a volatile path. 


Within this, the “new products” that include EVs, solar panels and lithium-ion battery industry is facing new restrictions relating to its exports. The USA is supposed to implement new tariffs on Chinese EVs and the same might be done by Europe.


These measures along with other selective policies might prove to be a hurdle for this recovery as incremental demand becomes more volatile or unknown. That is why investors need to keep track of data and other trends to witness if the trend is about to pause in the next few months leading to a reversal in markets.

留言


bottom of page