On Thursday, Asia-Pacific markets largely reacted with cautious optimism. This just as a boom in the U.S. tech sector made other U.S. stocks soar and jolted Wall Street. The index increased 0.23 percent in Hong Kong, closing at 21,466.27. On the other hand, the CSI 300 Index hovered around the 3,761.23 as concerns on China’s economic growth continued.
China Ruyi Holdings recorded the largest decline on the day, losing 11.26% after its bond issuance went public. This announcement comes with plans to raise 2.34 billion Hong Kong dollars, roughly $301.74 million. This announcement raised eyebrows among investors, particularly given Tencent’s substantial stake in the company, which stands at 16.4%, making it Ruyi’s second largest shareholder. The impact of this bond issuance on Tencent and the market in general is still to be determined.
China’s first-quarter 2025 GDP numbers come out really soon. Even as China’s recovery was sputtering this spring, analysts were starting to fret over the country’s long-term economic course. UBS today reduced its estimated growth for China to 3.4%, down from 4%. They credit this downward revision to the anticipated resumption of tariff increases between the U.S. and China. This ongoing strain is likely to keep pressure on Beijing to announce more stimulus steps.
DWS’ Chief Investment Officer Vincenzo Veddapencils has predicted a further decline in China’s GDP, estimating a drop of 1.3 percentage points. Now investment houses are starting to get really bearish. They’ve continued to lower their forecasts for China’s growth of late as we’ve seen one bad economic indicator after another come out.
“We expect fiscal policies will take the lead, including support for infrastructure development, home purchases, and appliance upgrades. Meanwhile, with the weakening of the U.S. dollar, the PBoC (People’s Bank of China) will feel more comfortable cutting interest rates,” – Yan Wang
The People’s Bank of China is now able to look on interest rate cuts with greater favor. This change coincides with a time when the U.S. dollar is finally starting to lose its strength. This possible easing of monetary policy, if substantive and proactive, would pump in some much needed help for several beleaguered segments across the Chinese economy.
Beijing has directed Chinese commercial carriers to stop all equipment and spare parts purchases from U.S. firms. This decision stacks on top of the already complicated and crackling economic forces at work. This new directive only adds to the already heightened tension in the Sino-American relationship. Yet it might shatter global supply chains.
On the macroeconomic front, Vincenzo Veddapencils commented on the expected trends in the U.S., stating that growth could “drop by 0.6 percentage points while inflation could rise by one percent.” Such conditions can cause ripple effects in international markets and impact investor sentiment throughout the Asia-Pacific region.
China has seen an unexpected slowdown. UBS recently downgraded its growth projections for the country. It has held firm on its 2026 growth forecast—3%. Some analysts are optimistic that the Chinese government will soon roll back at least some of these recent increases in tariffs. This action may provide some relief for America’s businesses that have been affected by ongoing trade tensions.
As such, market participants are watching closely for the release of China’s first-quarter GDP data. At the same time, it is unclear what specific policies Beijing will pursue in any future initiative. As Yan Wang stressed, these numbers should help show what the government might do. Together, these actions are meant to help stabilize the economy and get it growing again.
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