Chinese growth favorably surprises

Since our recommendation for repositioning on Chinese actions in January 2025. Therefore, Chinese values have experienced a rather positive stock market, outperforming both developed countries, Europe and S&P 500.

While Chinese values could have been the most affected by the American president’s desire to penalize China’s exports. Meanwhile, they ultimately resisted any pressures rather well. Consequently, The Hang Seng index has increased almost 25% since the start of the year. Meanwhile, while the CSI 300 index, more domestic, is barely up to 5% and therefore very withdrawn from the previous one.

From an economic point of view. the publication of Chinese GDP proved to be slightly better than expected with an increase of 5.2% at the end of June. Industrial production exceeded projections by recording an increase of 7.4% in June. This result was obtained despite a fall of 24% of exports to the chinese growth favorably surprises United States in the second quarter. Inflation is not on the rise in this context. Budget recovery measures supported domestic demand and construction. Beijing therefore has a certain room for maneuver to deal with new potential political tensions. Nearly $ 1 trillion is estimated that the available funds can support growth in the second half.

Deflation remains the main threat. but we believe that Chinese values could benefit from a more positive look of investors looking for diversification in the coming months. The Hang Seng index only treats the benefits for a similar multiple of the CSI 300 (14x).

The main Chinese values can benefit from better visibility. new interest in Western investors very little exposed in our opinion in titles of the second economy in the world.