Publications

In this report, we are trying to explain the puzzle of why China’ trade surplus has kept expanding in 2025 during the trade war by the US as presumably people believe exports should decline due to high tariffs.

China’s Outward Direct Investment (ODI) flows are undergoing a structural reconfiguration driven by geopolitical risk and protectionism. Investment is shifting sharply away from Global North countries and toward the Global South due to increased scrutiny. Future expansion will emphasize deep localization in key regions.

October economic activity indicators showed continuing sliding. All of these activity indicators are below the previous month’s readings and the market consensus amid the weak market sentiments.

China's 4% official GDP deficit for 2025 doesn't fully capture its fiscal stance due to a complex budget structure. The Government Funds Budget, reliant on land sales, significantly influences the economy via its total spending. A spending shortfall here signals demand weakness and deflationary risks.

We elaborate on the recent developments of China's monetary policy framework, including introducing new policy rate, upgrading "corridor" and developing new monetary policy tools.

We raise the China GDP forecast based on the recent China-US Geneva Agreement and the 3nd round stimulus. We also analyze the recent economic development and the policy outlook.

China’s banks face headwinds in 2025 amid weak credit growth, low profitability, and property sector stress. Narrowing interest margins and declining lending rates have pushed ROA and ROE to record lows. Real estate woes, LGFV debt, and US tariffs weigh heavily on the sector, while links to shadow banking grown modestly.