UBS On-Air: Market Moves Top of the Morning: US-China trade, China’s economy, Global diversification
Jun 16, 2025
Xingchen Yu, the Emerging Markets Strategist Americas at UBS, shares insightful updates on the intricate dynamics of US-China trade negotiations and their implications. He highlights China's ambitious self-sufficiency goals and explores how tariffs are reshaping its economy. The discussion also dives into the evolving landscape of China's offshore equity markets amid investor interest and AI advancements. Lastly, Yu emphasizes the importance of a diversified investment strategy, especially considering opportunities in both U.S. and international equities.
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Progress Amid US-China Trade Tensions
- US-China trade talks in London largely met expectations and built on earlier consensus from Geneva.
- Both sides showed progress on rare earth exports and export controls but strategic rivalry limits swift resolution.
China's Long-term Trade Strategy
- China's negotiation strategy aligns with its goal of tech self-sufficiency while maintaining global manufacturing ties.
- Beijing manages its rare earth dominance to keep supply chains dependent without pushing partners to diversify too quickly.
China's Economy Faces Export Challenges
- China's exports have been hit but front-loading and transshipment have managed the impact so far.
- Full-year export growth may drop to zero with tariff effects easing and slower US demand.