UBS On-Air: Market Moves Top of the Morning: Investing in China & EM Equities - Themes, opportunities, risks
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Sep 19, 2025 Xingchen Yu, Emerging Markets Strategist at UBS, shares intriguing insights into investing in China and emerging markets. He breaks down three crucial themes for China investors, discussing macroeconomic challenges, shifts towards tech and services, and external tensions. Xingchen highlights investment opportunities in Chinese tech driven by attractive valuations. He also examines post-Fed cut performance in emerging markets, spotlighting Brazil's re-rating potential and India’s tax cuts spurring consumption. A must-listen for savvy investors!
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China's Near‑Term Growth Slowdown
- China's economy cooled after a strong first half of 2025, with property and retail weakening and exports decelerating.
- UBS expects GDP growth to slow to about 4% in H2 and 4.7% for full-year 2025, prompting likely monetary easing.
Structural Shifts And Strategic Self‑Reliance
- China is shifting structurally toward services, experiences, and domestic tech innovation like AI LLMs and advanced manufacturing.
- External uncertainty eased but remains, so China doubles down on self-reliance and initiatives like Made in China 2035.
Evaluate Liquidity‑Driven Rallies Carefully
- Treat recent mainland China equity rallies as liquidity-driven and assess sustainability through fundamentals and earnings trends.
- Watch for slowing growth and negative earnings revisions before increasing allocation.