Goldman Sachs from earlier this week (Bloomberg TV interview) on Chinese equities. Analysts at GS say stocks in China are supported on a dip in price next year. Chinese stocks face limited downside in 2025. GS cite:
- market has factored in trade tension risks already
- domestic stimulus measures offer a buffer against any further selloff
- market participants expect more concrete measures to boost consumption
- equity valuations have come off their October peak
- potentially improving fundamentals for companies
- GS forecasts 7% earnings growth for the MSCI China gauge in 2025, and 10% in 2026
- 60% US tariff hike on Chinese goods is unlikely, but if so 10% valuation downside from the current level
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We've just had some announcements from China's Ministry of Finance on further stimulus measures ahead (nothing specific yet):
Reuters collated the headlines more broadly:
- China will step up fiscal spending and accelerate the pace of spending in 2025, according to the Finance Ministry.
- Fiscal spending will focus more on improving people's livelihood and boosting consumption, the Finance Ministry stated.
- The government will arrange for larger-scale issuance of government bonds to provide additional support for stabilizing growth, the Finance Ministry reported.
- Efforts will be made to fend off risks in key areas, said the Finance Ministry.
- The government will further increase transfer payments to local governments to strengthen their financial capacity, according to the Finance Ministry.
- China will support the expansion of domestic demand, said the Finance Ministry.
- The Finance Ministry announced plans to appropriately increase the basic pensions for retirees and raise the basic pensions for urban and rural residents.
- Support will be provided for building a modern industrial system in 2025, with full efforts directed toward achieving breakthroughs in core technologies, the Finance Ministry stated.
- The government will actively expand effective investment, reasonably arrange bond issuance, and use government investment to drive more social investment, the Finance Ministry said.
- Efforts will be made to resolutely prevent issues such as arbitrary charges, fines, and unreasonable distribution of costs, according to the Finance Ministry.
- Tariff policies will be improved, and cooperation with 'Belt and Road' countries will be deepened, the Finance Ministry reported.
- China will comprehensively deepen fiscal and tax system reforms and effectively prevent and resolve local government debt risks, the Finance Ministry stated.
