PERSPECTIVES Weekly: The Investment podcast Two elephants – tariffs and China growth
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Jan 20, 2025 Stefanie Holtze-Jen, the Private Bank’s Chief Investment Officer in APAC, shares expert insights on two crucial topics: China's economic growth and the impact of U.S. tariffs on Asia. She highlights Asia’s quicker economic expansion compared to developed markets and discusses China's three-pillar strategy for economic management. Stefanie provides a neutral short-term outlook for Chinese equities while emphasizing a positive long-term growth potential, addressing risks and market dynamics that investors should consider.
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APAC as Growth Engine
- APAC will continue to be a key growth engine for the world in 2025.
- Emerging economies, especially in Asia, will drive global growth more quickly than developed economies.
China's Three-Pillared Growth Approach
- China is stimulating growth through a three-pillared approach: structural reform, monetary policy stimulus, and fiscal stimulus.
- Land and tax reforms aim to shift the economy towards domestic consumer-led growth.
Tariff Impact on China
- The impact of US tariffs on China will be less than 60% due to supply chain diversification and reduced reliance on US exports.
- China's GDP growth target has been adjusted to 4.2% for this year to account for the tariff impact.