Latest news with #HelenQiao
Yahoo
a day ago
- Business
- Yahoo
Why Chinese Stocks Are Defying Weak Economic Data
Chinese equities are surging even as the economy shows more signs of weakness, with recent credit and activity numbers fueling worries of a deepening downturn. BofA Global Research's Helen Qiao and BNP Paribas' Jason Lui share their insights on the divergence between China's macro environment and markets on "Bloomberg: The China Show." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
2 days ago
- Business
- Bloomberg
Why Chinese Stocks Are Defying Weak Economic Data
Chinese equities are surging even as the economy shows more signs of weakness, with recent credit and activity numbers fueling worries of a deepening downturn. BofA Global Research's Helen Qiao and BNP Paribas' Jason Lui share their insights on the divergence between China's macro environment and markets on 'Bloomberg: The China Show.' (Source: Bloomberg)
Euronews
4 days ago
- Business
- Euronews
Is China finally turning the corner on its economic slump?
Three years after a property crisis of historic proportions, China is beginning to show tentative signs of recovery. But for the world's second-largest economy—long hailed as a global growth engine—the path forward remains fraught with uncertainty, as the scars of the real estate downturn continue to weigh heavily on sentiment, investment and consumption. Property sector remains the core weakness The most entrenched source of China's economic weakness remains its housing sector. New home prices across 70 major cities fell by 3.2% year-on-year in June 2025, marking a continuation of the downturn that began in 2022. Although the rate of decline eased slightly from the 3.5% drop recorded in May, it still underscores the sector's persistent fragility. 'It is hard to conclude that the sector is out of the woods,' said Helen Qiao, Chief Economist for China at Bank of America, in a recent report. 'We expect an 8–10% decline in new home sales and a 15–20% contraction in residential new starts this year—similar to the pace seen in 2023–24. The downcycle remains prolonged.' She added, 'If we look at the length and depth of the current cycle, the downcycle is certainly the most severe since the commercialisation of China's property market in the late-1990s.' The Chinese housing downturn has triggered a deflationary impulse across the broader economy, with consumer prices declining on a year-over-year basis for much of the past three years. China's real GDP has stabilised around 5% annually—far below the near-7% average posted in the five years preceding the pandemic. The gap with respect to the US economy has grown significantly since the pandemic. China's nominal GDP edged up from $18.2 trillion in 2021 to $18.7 trillion by the end of 2024. In the same period, the US economy surged from $23.7 trillion to $29.2 trillion. Stock market performance reflects this divergence. As of mid-August 2025, the Shanghai Composite is trading at the same level as in late 2021—having endured a near 30% drop in the interim. By contrast, the S&P 500 has gained 40% over the same period, fuelled by strong consumer demand and dominance in AI and tech innovation. The market capitalisation of China's seven largest companies stands at $2.4 trillion—far behind the $19.5 trillion valuation of the top seven US firms. Trade risks and geopolitical tensions linger While a full trade war has been temporarily averted following a double 90-day suspension of additional US tariffs, the environment remains tense. 'We see upside risks to the existing 10% of reciprocal tariff rate to China,' said Qiao. 'Keep in mind that China currently faces around 40% of effective tariffs.' She broke down the composition: '11% pre-existing rate from Trump's first term, 20% fentanyl tariffs, and 10% reciprocal tariffs.' A partial rollback of fentanyl-related tariffs remains possible, which could reduce the effective rate to 30–35%, a 5–10 percentage point reduction from current levels. However, uncertainty remains elevated. 'Any perception of one side failing to fully uphold its promise could trigger a renewed escalation in tensions,' Qiao warned. She also pointed to potential penalties from China's continued crude oil imports from Russia. On Wednesday, US Treasury Secretary Scott Bessent said in an interview that during the most recent G7 summit in Canada, leaders discussed the possibility of imposing 200% tariffs on China over its continued purchases of Russian crude oil—though the proposal did not receive support from European counterparts. Beijing is throwing cash to consumers: Will it work? In response to faltering domestic demand, Chinese policymakers launched two interest subsidy programmes in August 2025 aimed at stimulating household consumption and supporting service-sector businesses. These measures include a 1 percentage point fiscal subsidy for consumer loans taken between September 2025 and August 2026, and targeted subsidies for businesses in eight service industries. Bank of America's Qiao described the initiative as significant in scope: 'It is the first time the central government has offered interest subsidies for personal consumption loans.' However, she expressed reservations about its potential impact: 'The subsidy of 1% through borrowing costs will unlikely make a meaningful difference in the purchase decisions made by those who need to borrow to spend.' A long road to recovery While Beijing's efforts to stabilise the economy are becoming more targeted, the challenges are structural as much as cyclical. Sentiment remains fragile, and analysts are reluctant to declare a turning point. 'We believe this latest credit policy could help support the recovery of household credit demand from the current low levels,' said Qiao. 'That said, the size of the impact is still questionable.' For now, China's economic recovery remains tentative—caught between weak property fundamentals, cautious consumers, and an uncertain geopolitical environment.
Yahoo
15-07-2025
- Business
- Yahoo
China's Growth Helped by External Demand, BofA's Qiao Says
China's economy grew more than expected in the second quarter, with GDP expanding 5.2% in the April-June period from a year earlier. BofA's Helen Qiao tells Bloomberg Television that "growth has been holding up but, to a large extent, helped by the external demand still." She says investment and consumption proxies are "not necessarily doing too well." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
15-07-2025
- Business
- Bloomberg
China's Growth Helped by External Demand, BofA's Qiao Says
China's economy grew more than expected in the second quarter, with GDP expanding 5.2% in the April-June period from a year earlier. BofA's Helen Qiao tells Bloomberg Television that "growth has been holding up but, to a large extent, helped by the external demand still." She says investment and consumption proxies are "not necessarily doing too well." (Source: Bloomberg)
