China’s Economy Faces Headwinds Amid US Tariffs and Deflation Risks

Umich Expectioned Change in Prices Durying The Next Year China’s Economic Outlook Remains Uncertain While US Tariffs Pose Risks to The US Economy, China Faces Similar Challenges. 10% US Tariffs on Chinese Goods Took Effect on February 4. White Less Punitive Than Trump’s Threat of 65% Tariffs, These Levies May Impact The Chineomy.

S&P Global Recently Forecast that China’s GDP Growth May Slow to 4.1% in 2025 if the USImposyd 10% Tariffs on Chinese Goods. The US RATING AGENCY ADDEDED THAT HIGher Tariffs would Likely Lead to an Even Sharper Slowdown.

Despite Trade Conceerns, Beijing May Feel Temporiarily Relieved AFTER RECENT CONSUMPTION TRENDS, PETENTILLING SUPPORTING AN Official 5% Growth Target for 2025.

Natixis Asia Pacific Chief Economist Alicia Garcia Noted:

“On a More Positive Note, The Chinese New Year Consumption Data Has Been Robust, ShowCASING The Resilience of the Economy. Speciliary, Durying the Holiday Period, Bank Card Transactions, Box Office Revenue, Tourist Numbers, and Restaurant Consumption All ExperienCed Robust Growth. ”

Beijing Reinforced It Commitment to Boost ConSumption on February 10, with Plans to Focus More on Driving Consumption.

However, Private Sector Pmi Data Raises Concerns About the Effectiveness of the Tese Effrts. January’s CAIXIN PMI SURVYS REVEALED THAT ManUFACTING AND SERVICES Sector Firms Are Cutting Jobs Amid Economic Uncertainty. Furthermore, A Continued Deterioration in Labor Market Conditions Could Pressure Wages and Consumer SPEENDING.

Commenting on China’s Economic Environment, García Herrero Added:

“The (China’s) Deflationary Environment Further Echoes the Weak Investment in China, WHICH DOES NOT Bode Well For Investment Growth, A Critical Driver of Economic Growth. This Sity May Ultimately Lead to Further Contraction in Employment and Wage Growth, Undermining the Sustainability of Consumption Growth. ”

Fiscal and Monetary Policy Maneuvers Critical For Growth Considering a potential US Tariffs-Driven Slump in Exports and Deflation, Beijing’s Fiscal Stimulus Maneuvers and The People’s Bank of China (PBOC) Monetary Policy Decisions Coulings Coulings Coulings Couling.

Garcia Herrero Concluded:

“SO FAR, IT APPEARS THAT HINESE GOVERNMENT IS Poured to Reaffirm of the 5% GDP Growth Target for 2025, Sustaining the Momentum Ganed During the Chinese New Year and Replicating ICCC VE Upgraded Our Forecast to 4.7% from 4.5% for 2025. ”

Further Stimulus and Monetary Policy Moves Could Also Coincide with The Emergence of ai-Driven Opportunities, Such As DEEPSEEK, Which May Bolster Sentiment And Con.

Market Trends: Mainland Markets Remain Cautious Concerns About A US-CHINA Trade War Have Pressure Mainland Markets in Early 2025. Year-to-Date, The CSI 300 and The Shanghai Composite Index have Declined by 0.23% And 0.0.0 However, The Hang Seng Index Has Rallied 10.33%, Fueled by Ai-Related Gains in Hong Kong-Listed Tech Stocks, With Alibaba (9988) Soaring 43.45% in Early 2025.