The beginning of the New Year in China is already yesterday, the next important date in the calendar is the inescapable Congress of the Chinese Communist Party, a meeting whose start is indicated with red in the calendar of analysts and investors for this Wednesday, March 5. Market expectations are loaded with optimism about the measures that Xi Jinping can takePresident of the People’s Republic of China, To reactivate the economy of the Asian giantafter a 2024 marked weakness and before current perspectives that are not entirely encouraging. Meanwhile, the main selective arrive at this event With its quote in a very different way so far from 2025: The Hang Seng scores 15% upload since the beginning of the year, on the other hand, the CSI 300 is quoted on the annual negative terrain, giving 1% in the parquet, a gap of almost 16 percentage points.
He Hang Seng managed to finish turning his annual price after the emergence of Deepseek in the international technological scene. This artificial intelligence, financed by the Chinese government and generated with cheaper chips than those of its American counterparts, was a Great blow For firms related to these pages, especially in the United States, and ended the Rally that technology companies lived in the West.
And investors migrated their dollars to China, to the heart of their selective with the greatest technological composition, the Hang Seng, whose price came to 20% upload in the yearalthough now it touches 15%after a 3% correction in the latest February sessions.
The most upward companies of this selective are SMIC, one of the main semiconductor manufacturers in the world, with an advance of 62%, followed by the holding company of the Alibaba group and its other subsidiary dedicated to health, which total 58% and 56% so far this year due to their relationship with China.
Meanwhile, the bars of the 300 Chinese firms of the CSI are different from the bulls of their counterpart. The index yields 2% in the year, despite having managed to get positive in the year in mid -February, although this rise failed to exceed 1% per year in the 3,978 points, compared to the 3,888 points in which he currently quotes. The sector that drags the most to this index is energy, with 15% annual decrease.
The senior quantitative analyst of Generali Investments, Vladimir Oleinikov, explains that the rise has been due to several “triggering factors, which were the launch of Deepseek (a profitable alternative to Openai), softer commercial tensions than expected, an important infraval of the Chinese variable rent and, finally, finally, finally, finally, finally, finally, finally, finally, finally, final But no less important, the growing expectations of a policy of support for the economy“
And, the expert anticipates that for “Chinese markets continue to improve it will be necessary for the economy to successfully pass from a growth model driven by industry to another driven by consumption. The third annual meeting of the Chinese Popular Party will be key, since it will provide details about the expected fiscal stimulus and other support measures” Oleinikov warns that for China “the risk of tariff climbing persists, high tariffs of up to 60% on imports from China and reciprocal encumbrances, but we confirm our light Over -loss In China, “says the analyst.
Trump tariffs
From the rental analysis team 4 indicate that the relevance of this event is that it is the place where “the official GDP growth objectives will be established by 2025, around 5% growth, for whose achievement new monetary and fiscal stimuli could be announced, as is a possible greater fiscal deficit planned and greater emission of bonds of local governments, than They should be aimed especially to recover consumer confidence and with it private consumption“, the financial entity is scored. Even so, they consider that China is in” an international context that complicates its traditional growth model out And before a real estate sector that tries to stabilize, but still shows no recovery signs. “
It is impossible to ignore the series of challenges in front of the giant, to which this new obstacle adds: the new tariffs of the Donald Trump administration to their products, which enter into force on Tuesday. And it is that at the 25% rate that the Republican had promised, it has already added 10% more tax imposition to its products and that with economic weakness can pass an additional invoice to the economy of China, which also opens the door to begin a commercial war between both giants.
And is that the chief economist of Bloomberg Economics In Asia, Chang Su, says that “without a doubt, the commercial war will be one of the priority issues on the closed door of the National Popular Assembly. With the imposition of the last tariffs, just one day before the opening of the meetingit is unlikely that China’s budget posture immediately change. But with the increase in external pressures, political leaders could accelerate the application of stimulus measures. “
From Bankinter they also point out that, despite “positive reading of the PMIS (internal monetary product) when the records are placed in the expansion zone, greater than 50”, which is a stable economy, they argue that it is “thanks to an improvement in production for greater internal demand.” “However, these data are irrelevant to the imminent entry into force of additional tariffs of 10% by the US announced by Trump,” says the analysis house. “It will be necessary to be attentive to the response of the Chinese government, which meets from this Wednesday in the National Popular Assembly. It is expected that in the face of 2025 it will announce an approximate 5% growth objective and an extension of the target of the deficit to 4%, versus the 3% in 2024,” they point out from the entity.
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