Key Focus :

• Challenges in China's property sector persist, weighing on economic growth.
• Industrial, tech, and export developments provide potential offsets.
• Monetary easing and corporate lending show early signs of recovery.
• Strong export performance, green transition, and tech innovation are key drivers.
• Stock market rebound and improved sentiment, particularly in the tech sector.
• Geopolitical risks remain, with a focus on domestic resilience and non-US trade.

China’s property sector remains under pressure due to weak transactions, unsold inventory, and struggling developers. Despite government interventions, real estate is unlikely to drive near-term growth. However, strength in industrial, tech, and export sectors suggests that China has alternative growth drivers.

Key Highlights :

• Monetary Cushion & Corporate Lending
• Authorities are countering debt-deflation risks with monetary easing.
• Interest rate cuts and liquidity injections have lowered borrowing costs.
• Corporate lending shows early signs of recovery, an essential step toward economic stabilisation.
  
  
• Resilient Export Performance & High-Tech Investment
• Exports grew 5.9% year-on-year in 2024, reaching record highs.
• Investments in green energy, semiconductor manufacturing, and AI are gaining traction.
• Chinese electric vehicle (EV) and battery makers are expanding product offerings and market share.
• Local DRAM chipmakers are becoming competitive players in the global semiconductor industry.
• The release of DeepSeek’s R1 AI model signals China’s growing influence in AI innovation.
  
  
• Stock Market Rebound & Tech Revival
• China’s stock markets have performed strongly in 2024.
• Hang Seng China Enterprises index is up 18% year-to-date (YTD), and the Shenzhen composite is up 7.4% YTD.
• Alibaba has surged 69% YTD, reflecting renewed investor confidence.
• Jack Ma’s reappearance and Alibaba’s AI initiatives mark a turnaround for the tech sector.
  
  
• Geopolitical Uncertainty & Strategic Adjustments
• Potential US trade restrictions, particularly under a possible Trump presidency, pose risks.
• China is focusing on strengthening domestic demand, enhancing industrial capabilities, and diversifying global trade partnerships beyond the US.

Conclusion :

While China’s property market remains a drag, alternative growth drivers—particularly in exports, tech, and industrial innovation—offer hope. Monetary easing is supporting recovery, and the stock market rebound signals improved confidence. However, geopolitical tensions remain a key challenge, requiring China to balance external pressures with internal economic resilience.