China's economy remains resilient in April despite US tariffs
China's economy stayed resilient, despite an ongoing trade war with the US. Data released for the month of April showed stable growth, with a mild softening in consumption and investment. Retail sales of consumer goods grew 5.1% on-year, despite missing analysts' estimates of 5.5%. Moving forward, analysts see more downside risks ahead, but investment banks are raising their forecasts for China's economic growth. Tan Si Hui reports.
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Business Times
2 hours ago
- Business Times
China didn't just survive decoupling, it turned it into strategy
WHEN the first Trump administration pushed for decoupling from China, it was framed as a geopolitical warning shot. Decoupling was meant to be a chokehold – a way to cut China off from capital, consumers, and core technologies. However, Beijing did not panic, it treated the move as a strategic signal. Rather than resist, China began quietly reconfiguring its global economic footprint. Washington thought it was cornering China. US President Donald Trump thought he held the cards, controlled the chips and set the rules. But he missed one inconvenient truth: Most of those cards were printed, packed, and shipped from factories in China. No grand speeches. No drama. Just deliberate moves: Diversifying supply chains, investing abroad, and pushing local tech to close the gap. While American legislators staged hearings, Chinese firms inked deals. While one side debated restrictions, the other redrew its map. The result? A calibrated diversification of supply chains, not as an act of retreat, but of repositioning. Supply chains with Chinese characteristics Over the past five years, Chinese firms have accelerated investments across South-east Asia, particularly in Vietnam, Indonesia, and Malaysia. These moves weren't just about evading tariffs; they reflected something deeper – the private sector's instinct to escape the involution of domestic competition. Rather than grind through China's crowded and laser-thin margin markets where capital quickly pile into the same trends, many entrepreneurs sought arbitrage abroad. Lower labour costs, less stiff competition and higher margins. In other words: less involution, more unfair advantage (over the local players in the overseas markets) . BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up But this wasn't a solo act. Beijing provided the scaffolding – through bilateral free trade agreements, infrastructure lending and sometimes diplomatic cover. It's market-driven, but state-supported. A relay race between private initiative and public policy. The numbers are telling. China's foreign direct investment into Asean nearly tripled, from around US$9 billion in 2016 to over US$25 billion in 2023. Bilateral trade with Asean grew from US$486 billion to nearly US$700 billion over the same period. And critically, much of this new value chain – from intellectual property (IP) to logistics to upstream components – remains under Chinese control. What's emerging is not just offshoring, it is a China-centric supply chain, just not physically in China. Washington turns inward, Beijing looks outward While China was expanding outward, the US focused inward. Rather than competing through innovation or strengthening ties, Washington's toolkit leaned heavily on bans and restrictions – cue TikTok, Huawei, WeChat, DJI. Legislative energy went into hearings and symbolic gestures. Meanwhile, Chinese companies opened factories, expanded exports, and deepened market ties. Firms like Midea acquired global assets such as Germany's robotics maker KUKA and Spanish appliance manufacturer Teka Group. BYD set up electric vehicle (EV) plants in Hungary and Brazil, while Wuling manufactured their mini EVs in Indonesia. Consumer names such as Mixue, Luckin Coffee and Chagee have also become household names across South-east Asia in recent years. Industrial giants such as the likes of CATL, Trina Solar, and Sungrow now dominate global energy supply chains. Technological independence under pressure Despite export bans and semiconductor restrictions, China has made visible progress in core technologies. Domestic players have achieved 7nanometre (nm) chip production and are pushing into DUV (deep ultraviolet) and potentially EUV (extreme ultraviolet) lithography. AI chips are now a top priority for firms like Huawei and SMIC. In aviation, Comac's C919 took flight, further reducing dependency on Airbus and Boeing. In rare earths, China has not only consolidated upstream and midstream operations but also introduced tighter controls and oversight. This has significantly strengthened Beijing's ability to enforce export restrictions and wield rare earths as a strategic bargaining chip in ongoing trade negotiations. Early signs of strategic payoff Recent trade data shows that China's preparations since Trump's first term are bearing fruit. In May 2025, despite a sharp 35 per cent drop in exports to the US, overall exports rose 4.8 per cent year on year. This plunge in exports to the US was somewhat cushioned by strong performance in Asean (15 per cent), the European Union (12 per cent), and Africa (33 per cent). Germany and Vietnam both saw a 22 per cent jump in imports from China. 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CNA
2 hours ago
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There's more to Chengdu than just pandas: How to have a chic getaway in this Sichuan city
At first glance, Chengdu seems to run entirely on the panda economy and to some extent, it does. As the capital of Sichuan province and home to major panda conservation and research centres, the city has fully embraced its status as the spiritual home of China's most beloved furball. No wonder the city is overflowing with panda-themed everything. From panda-shaped ice cream to black-and-white bubble tea, exclusive merch (even from collectible chain Pop Mart) and plushies galore. It is cute, kitsch and completely unavoidable. But Chengdu has also been quietly upping its style game. In recent years, luxury fashion houses like Bottega Veneta, Loewe and Dior have launched striking flagships and exclusive concepts. Louis Vuitton, for example, opened its third China Maison here, featuring The Hall – its first restaurant in China – inside the century-old Guangdong Hall. This understated cool is embodied by locals: designer handbags slung over relaxed silhouettes, vintage touches and sneakers with attitude. No wonder coveted French label and champion of quiet luxury Lemaire recently opened its inaugural store in China at the unique Taikoo Li development, which features the adaptive reuse of Qing dynasty courtyard houses and traditional architecture for luxury retail and F&B concepts. To immerse in this heritage-meets-contemporary vibe, check into The Temple House, arguably the most distinctive of Swire Hotels' three House Collective properties, alongside hotels in Hong Kong and Shanghai. Designed by architectural firm Make Architects and adjacent to Taikoo Li, Temple House, which features 100 hotel rooms and 42 serviced apartments, is part of the city government's conservation project to preserve the heritage buildings in the vicinity. Named after the 1,600-year-old Daci Temple on whose grounds it now stands, the hotel draws on a rich past. This storied sanctuary has welcomed emperors, poets and seekers of wisdom including the monk Xuanzang, whose epic pilgrimage inspired Journey to the West. Today, the main temple complex still stands in the middle of Taikoo Li, offering an interesting counterpoint to the sleek storefronts and buzzy eateries surrounding it. This essence of cultural depth is echoed in The Temple House, which thoughtfully incorporates its reverence for history with a modern, minimalist sensibility. The entrance is set in a painstakingly restored hundred-year-old Qing Dynasty Chinese courtyard building, once home to scholars who had travelled to study in Chengdu. It is a humble, historic entryway that sets the tone for the hotel's quietly memorable hospitality. Checking into my chic Deluxe Temple Suite, a blend of dark timber accents and sunlit tones of white and oak, I am welcomed with playful local touches – a dessert platter styled like hotpot, freshly brewed tea and a cuddly panda plushie for company. If Taikoo Li is where Chengdu shows off its polished, Prada-wearing side, then Dong Jiao Memory Cultural and Creative Park is its artsy counterpart who listens to vinyl and thrift shops for upcycled secondhand finds. Just two metro stops or a 15 minute drive from The Temple House, this former factory site has been transformed into a sprawling creative park, while still preserving its industrial facade. Sprawling factories have been transformed into indie retail outlets, cool cafes like popular chain Manner and bubble tea joints abound and there are art installations, galleries and live music gigs to uncover. This is also where the Xiaohongshu-famous brick wall bearing the Chinese characters Chengdu is located. Get in line to snap a selfie but know everyone takes their sweet time perfecting their shot. Of course, no trip to Chengdu is complete without feasting on its signature culinary highlights, chief among them, the obligatory communal, tongue-numbing Sichuan hotpot. For an over-the-top experience, head to The Way of the Dragon, a theatrical hotpot restaurant tucked along Kuan Zhai Alley, one of the city's best-preserved historic streets, now buzzing with shops, street snacks and teahouses. It's a full-blown spectacle, with servers presenting platters of meats, mushrooms and offal (if you dare) on dragon- or boat-shaped vessels. There is also a nightly show with classic Sichuan acts including musical recitals, kung fu demonstrations and the crowd-pleasing bian lian (face changing) opera performance. After all that spice and spectacle, Chengdu's teahouse culture, popular among locals as a place for relaxation and socialising, is a welcome palate cleanser. The Temple House's Mi Xun Teahouse – also where the hotel's excellent spa is located – is situated within a standalone courtyard building next to the hotel and elevates this concept to an artform. The Michelin Green Star teahouse offers a refined vegan menu inspired by the healthful dishes once served at Daci Temple with delicious meatless versions of Sichuan specialties such as dan dan mian noodles and mapo tofu. Both were layered with such bold, satisfying flavours that not a single soul at the table missed the meat. The menu also celebrates the seasons with elegant, farm-to-table dishes crafted from locally sourced produce, offering a lighter perspective to Sichuanese cuisine. Naturally, there is a broad selection of tea varieties to pair with the food. Alternatively, head sommelier Cederic Yao will happily share his recommendations for highly rated and rare Chinese wines. Tip: When the weather is good, ask for a table in the red lantern-lit courtyard for an atmospheric meal. The Temple House is also home to Tivano, a Michelin-listed Italian spot led by chef Riccardo Baronchelli (ex-Mandarin Oriental Singapore), known for its open kitchen, wood-fired pizzas and handmade pastas. Afterwards, head to cocktail bar Jing, where Boston Baijiu Bar alum Nick Lappen serves globally inspired drinks in a sultry, low-lit setting. Just beyond the hotel, alleys brim with eateries, including stalls selling the classic Chengdu snack of stewed rabbit heads. Locals swear by them but I chickened out. I had better luck at the one Michelin-starred Ma's Kitchen, a Chengdu institution that began as a humble eatery in 1923. It is famed for elevated versions of comfort dishes like kung pao prawns with eggplant, twice-cooked pork and cold chicken in green Sichuan pepper and every bite was wiped clean. Pro tip: they do not take reservations, so go early or expect a queue. For those who are game for a day trip that is off the well-trodden panda path, visit the Sanxingdui Museum, about an hour's drive away. This fascinating museum houses one of China's most intriguing archaeological finds - the remains of a mysterious Bronze Age civilisation that thrived over 3,000 years ago and then disappeared without a trace or any form of writing. A new extension by Chinese architecture firm CSWADI opened in 2023, more than doubling the exhibition space and bringing renewed attention to Sanxingdui's mind-boggling discoveries. There are a staggering array of artefacts including delicate gold sceptres, an intricate bronze tree of life, and countless ceremonial masks with wide, staring eyes and razor-sharp geometric features. These objects are so otherworldly they have sparked countless theories of time travel, alien contact or lost advanced civilisations. I was mesmerised by how strangely modern many of them appear. A stone stele had engravings that looked like they were made by laser and the masks looked like they belonged in a superhero movie. The piercing gazes of the bronze masks lingered in my mind long after I left the museum.
Business Times
4 hours ago
- Business Times
Hong Kong – Canary in a goldmine
THE perception of Hong Kong's decline as a financial hub and desirable place to live is both understandable yet overstated. During a recent business trip to Europe, one consistent reaction stood out: Clients' faces flashed with concern and sympathy when I mentioned I was based in Hong Kong. I get it. For years, the narrative around Hong Kong has been relentlessly downbeat: falling property prices; the 2019 protests; Covid lockdowns; expat departures; strained US-China relations; and renewed worries about the stability of the HKD-USD peg. The concerns are valid but, as I argue below, also misplaced. Which major equity market has outperformed most others in 2025? Which market ranks fourth globally by capitalisation, trailing only the United States, mainland China, and Japan? Which market raised more in IPOs than Europe's exchanges combined this year? And which economy welcomed more tourists than Japan from January to May 2025? If you answered Hong Kong to all, you're absolutely correct. Surprised? Let me explain. Golden goose My optimism about Hong Kong's future hinges on its currency: the Hong Kong dollar (HKD). Within the Greater China region, no other city matches its currency's liquidity and convertibility (with apologies to Macau's pataca). Corporate China's unquenchable demand to recycle hard currency is well known, and until the renminbi becomes convertible – likely a distant prospect – Hong Kong's role as China's premier funding conduit remains secure. But what about the HKD-USD peg's vulnerabilities? Recent media reports have highlighted pressures on the peg, and these concerns are reasonable. Yet, the strain isn't from capital flight; it's the opposite. Inflows from IPOs, dividends, and investment opportunities are so robust that the Hong Kong Monetary Authority (HKMA) had to sell some HK$47 billion (S$7.6 billion) in May 2025 to temper HKD appreciation. Of course, an appreciating currency is a nice problem to have, as are interest rates at – or close to – record lows. But, either way, both are still problems if allowed to endure, potentially distorting the allocation of capital. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up To be fair, the allure of a USD carry trade (selling HKD and investing in US money market funds for example) has seen the HKD's value normalise. But even two weeks on from the last mega-IPO, the monetary system remains awash with liquidity, allowing banks to reset mortgages rate lower and allowing refinancing opportunities for the beleaguered commercial real estate sector. Local hero With roughly comparable populations, land mass, and economic size, the friendly competition between Hong Kong and Singapore as rival business centres is as storied as it is long-running. Anyone who has recently visited Singapore will have been mightily impressed by the energy, opportunity, and confidence that the city state currently exudes; and might conclude – reasonably – that Hong Kong has (temporarily) lost its mojo to its ascendent challenger. Yet, Hong Kong's role as China's financial gateway also gives it both a role and an edge, certainly in the ability to offer local companies liquidity for financing purposes. For example, Hong Kong's stock market has a total market capitalisation of US$6.3 trillion, entirely dwarfing Singapore's at merely US$0.5 trillion, a 13-fold difference. As China corporates consider delisting from the US or dual list in Hong Kong, one can assume Hong Kong's market capitalisation may likely increase. Admittedly something of a stealth rally, the Hang Seng Index (HSI)'s year-to-date performance – largely complementing and reflecting renewed interest in China – may also have attracted international investors. At time of writing, the HSI was up 21 per cent on the year, outperforming the majority of competitor markets. My sense is as investors rotate thematically from US exceptionalism to – among other things – (China-centric) emerging market opportunities, local equities may further benefit in the months and quarters to come. Canary's fragility Yet for all Hong Kong's recent positives, as a financial entrepot it is both sensitive and vulnerable to the volatilities of global trade. And that is unlikely to change anytime soon. Thus, strained trade relations between the US and China – and the risk of high tariffs being imposed by the former on the latter – will negatively impact the city's fortunes. Inevitably, Hong Kong reliance on mainland inflows – with some 80 per cent of Hong Kong Exchanges and Clearing's market cap tied to Chinese firms – exposes it to China's economic slowdown risks. Escalating geopolitical tensions or a faltering Chinese economy could trigger occasional liquidity shocks, potentially derailing Hong Kong's markets for a while. At Lombard Odier, we are overweight equities, including those in emerging markets. Our preferred way to access China risk is via Hong Kong's H Share market. Thus far, it has been a satisfactory trade. But Hong Kong's East-West history positions it – somewhat uniquely – in the crosshairs of tensions between the world's two great superpowers. Hong Kong's resilience is well known and well regarded; but shouldn't be taken for granted. The writer is chief investment officer, Asia, at Lombard Odier
