Global investors maintain positive outlook on China’s economy, vast market: analyst

⁠⁠⁠⁠⁠⁠⁠Global investors are increasingly optimistic about the long-term value of Chinese assets due to their confidence in China's economy and enormous market potential, according to a financial expert.

Recently, multiple foreign financial institutions have released reports expressing their positive outlook on Chinese assets. Goldman Sachs raised its target price for Chinese stocks last month, estimating that the adoption of artificial intelligence (AI) could boost earnings growth and potentially bring in 200 billion U.S. dollars of inflows. Meanwhile, Citigroup and HSBC have upgraded their ratings for Chinese stocks from "Neutral" to "Overweight", reflecting growing investor confidence.

Since the start of the year, China's innovations in cutting-edge sectors like robotics, AI, and game development have garnered global attention. These advancements highlight China's growing influence in technology and its potential to lead in emerging industries.

China's economic data further supports this optimism. Recent reports show the country's economy is accelerating. In February, the Small and Medium Enterprises Development Index reached its highest level in nearly four years, while the purchasing manager index (PMI) of the country's manufacturing sector increased by 1.1 percentage points, signaling a strong rally in the manufacturing sector.

Additionally, China has made significant strides in opening up its service sector to foreign investment. New pilot programs have been launched in areas like value-added telecommunications and healthcare, further attracting international attention.

Duan Bing, an analyst of China's technology and telecommunications industries at the global financial services group Nomura, emphasized that China's large tech user base and their high level of acceptance of new technologies are key drivers behind the country's technological growth.

According to Duan, this dynamic is one of the primary reasons institutional investors have increased their focus on China's technology-related assets.

"China's technology sector boasts a favorable environment for growth. The country also has a vast number of enterprises and consumers who are highly receptive to new technologies and applications. All this serves as a continuous driving force for innovation. As a result, we believe this is why global institutional investors are increasingly interested in Chinese assets, particularly in technology-related sectors," Duan shared.

The inclusion of stabilizing the housing and stock markets in this year's Government Work Report has introduced new drivers for the long-term stability of Chinese assets, further boosting global investor confidence.

Additionally, the policy insights from the just-concluded annual sessions of China's top legislature and advisory body, which emphasize developing more dynamic emerging and future industries, have highlighted China's growth potential, drawing more interest from foreign institutions.

Global investors maintain positive outlook on China’s economy, vast market: analyst

The escalating trade measures taken by U.S. President Donald Trump have created huge uncertainty in international trade, dented world economic growth and will only serve to harm the interests of all parties concerned, a Polish economist has warned.

Since returning to the White House in January, Trump has been pushing his so-called "America First" agenda by threatening a new trade war against multiple countries. He has already introduced 25 percent tariffs on imports from Mexico and Canada - with some exemptions - and brought in a 20 percent levy on Chinese goods.

Last Wednesday, the U.S. imposed a 25-percent tariff on all steel and aluminum imports from around the world, prompting the European Union (EU) to take countermeasures.

Trump then threatened to impose a "200 percent tariff" on alcohol from EU countries unless the 27-nation bloc scrapped its planned 50-percent tariff on U.S. whiskey.

Highlighting Trump's seemingly unpredictable nature, Lukasz Goczek, a professor at the Department of Macroeconomics and Theory of Foreign Trade with University of Warsaw, warned the tariffs could have a destabilizing effect which may upend global trade.

"He (Trump) imposes a lot of uncertainties on international trade and, in general, international trade is good for all of us. So what's bad for international trade means it's bad for all of us," he said.

Goczek said another round of the tit-for-tat tariffs which persisted during Trump's first term in office has discouraged businesses and hampered investment around the globe.

"On one hand, Donald Trump proposes a lot of uncertainty to the system and uncertainty is always bad for business. And on the other hand, he's like constantly going back and forth, backtracking, and he's always subject to retaliation by his partners. So it makes it very difficult to actually understand where this is going," he said.

As other countries choose to hit back with high tariffs on American goods, Goczek said Trump's overall tariff strategy could backfire as these retaliatory moves will inflict significant harm on the U.S. economy, adding there will ultimately be no winners from such a trade war.

"The European Union has a big surplus in terms of goods with the U.S. It has a large negative account in terms of services, so when it comes to services like the big tech giants like Google, Apple and so on, they tend to sell us a lot of their services. And in service terms, we have a debt that's almost as large as the surplus in goods. So if Donald Trump wants to get rid of our goods from their markets, we can do the same and get rid of American services, and obviously it's something that we will both lose," he said.

US tariffs create business uncertainty, lead to lose-lose situation: Polish expert