US-CHINA CHIP SPAT Threatens Fragile Truce As Markets Weigh Pboc Stimulus

“China has been Issued a statement on the US Adjusting Chip Export Controls, Claiming the Us’ Seriously UnderMined Consensus Reached at Geneva Talks. US-CHINA TRADE DEAL WAS REACHED. ”

The Latest Trade Developments Underscore How Fragile The Truce Remains, Particularly with US Effrts to Curb China’s Access to Advanced Technology.

China Economic Data Signals Risk To Consumption Shift While the Trade Deal May Reduce Stagflation Jitters, Recent Chinese Data Suggests Deeper Structural Issues. Industrial Production Rose 6.1% Year-on-Year (Yoy) in April, Down from 7.7% in March But Still Elevated. Meanwhile, Retail Sales Increased 5.1% Yoy After Rising 5.9% In March.

The Slowdown in Consumer Spending Came Despite Beijing’s Stimulus Efforts Aimed at Boosting Domestic Demand and Consumption. UNCERTAINTY STEMMING FROM The US-CHINA Trade War Likely Weighed on Consumer Sentiment, Impacting The Effectiveness of Beijing’s Stimulus Measures.

MOHAMED A. El-Erian, President, Queen’s College, Cambridge University, Commented:

“The Latest Chinese Macro Numbers Illustrate A Familiar Pattern in the Country’s Economy: Government Measures of FThen Succeed in Boosting Industrial Production, But Tenda St. Consumption. ”

Recent CPI and Producer Price Figures Also Reflected a Weak Demand Backdrop, Raising Concerns About China Achieving ITS AROUND 5% 2025 Growth Target. China’s Consumer Price Index Fell 0.1% Yoy in April, While Producer Prices, A Leading Inflation Indicator, Fell 2.7% Yoy After Declining 2.5% in March.

Natixis Asia-Pacific Chief Economist Alicia Garcia Herrero Remarked:

“While China has Clearly Outsmarted the Trump Adminstation, Reaching A Very Beneficial Deal, The Chinese Economy Is Not Doing Well PRICES), AND WEST GOT VERY Weak Loan/Total Social Finance Data.

Credit Data Reinforced that Concern. April’s New Yuan Loans Rose Just Cny280 Billion, A Sharp Drop From Cny3,640 Billion in March.

PBOC CUTS LOAN PRIME RATES TO BOOST DEMAND On Tuesday, May 20, The People’s Bank of China Cut the 1-YEAR AND 5-YEAR LOAN PRIME RATES (LPR) to 3% and 3.5%, Respectively, in a Bid to Revive Credit Demand. Meanwhile, Majoor State-Banks Lowered Renminbi Deposit Rates by Up to 25 BPS, accounting to cn wire.

While Lower Deposit Rates May Discouroage Saving, Ongoing Economic Uncertainty Couldy Have More Influence on Household Saving Trends. Trade Developments Will Remain Key to Influencing Consumer Confidentnce and SPEENDING.

Markets React to Pboc Move But Remain Cautious Investors Responed Favoryably to the PBOC’s Rate Cuts. The Hang Seng Index Advanced 1% on May 20, while the CSI 300 and Shanghai Composite Index Rose 0.21% and 0.1%, Respectively. Still, Caution Prevailad, Reflection Persertainty Surrowing Trade Negotias and Tech Restrictions.

Year-to-Date (YTD), The CSI 300 is Down 1.19%, While the Nasdaq have Fallen 0.49%. In Contrast, The Hang Seng Index Has Climbed 17.38%YTD, As Tech Advancements Sent The Hang Seng Tech Index Up 18.65%, While the RoundHill Magnificent Seven Etf Has Falen.