Alice Han

So an uptick in both monetary and fiscal should be supportive of more Chinese equities. And so we really get this bifurcation. The stocks look pretty attractive, but at the same time, we've got these deep-seated macro issues that aren't going away anytime soon.

So an uptick in both monetary and fiscal should be supportive of more Chinese equities. And so we really get this bifurcation. The stocks look pretty attractive, but at the same time, we've got these deep-seated macro issues that aren't going away anytime soon.

So an uptick in both monetary and fiscal should be supportive of more Chinese equities. And so we really get this bifurcation. The stocks look pretty attractive, but at the same time, we've got these deep-seated macro issues that aren't going away anytime soon.

Well, deflation is a sign of weak demand internally. And in the case of China, this is borne out by two major factors.

Well, deflation is a sign of weak demand internally. And in the case of China, this is borne out by two major factors.

Well, deflation is a sign of weak demand internally. And in the case of China, this is borne out by two major factors.

One is the fact that domestic demand has been hit hard by a number of factors, the financial repression of the household sector, the fact that interest rates remain extremely low at the expense of the household sector, and the fact that COVID really had long-term consequences on the household balance sheets.

One is the fact that domestic demand has been hit hard by a number of factors, the financial repression of the household sector, the fact that interest rates remain extremely low at the expense of the household sector, and the fact that COVID really had long-term consequences on the household balance sheets.

One is the fact that domestic demand has been hit hard by a number of factors, the financial repression of the household sector, the fact that interest rates remain extremely low at the expense of the household sector, and the fact that COVID really had long-term consequences on the household balance sheets.

Not to mention, obviously, the real estate crackdown that has obviously hit the net wealth effects for households. So we're seeing a very weak consumer environment. That has pushed prices down. Meanwhile, China is using more of its export engine machinery and manufacturing sector to try to offset some of the slowdown in the private consumption and the real estate sector.

Not to mention, obviously, the real estate crackdown that has obviously hit the net wealth effects for households. So we're seeing a very weak consumer environment. That has pushed prices down. Meanwhile, China is using more of its export engine machinery and manufacturing sector to try to offset some of the slowdown in the private consumption and the real estate sector.

Not to mention, obviously, the real estate crackdown that has obviously hit the net wealth effects for households. So we're seeing a very weak consumer environment. That has pushed prices down. Meanwhile, China is using more of its export engine machinery and manufacturing sector to try to offset some of the slowdown in the private consumption and the real estate sector.

That effectively means that you've got two sides of the equation. Domestic demand internally is very weak and meanwhile China is supplying increasingly cheap goods to the rest of the world because it needs to produce more to meet the sort of GDP targets it sets for itself every year.

That effectively means that you've got two sides of the equation. Domestic demand internally is very weak and meanwhile China is supplying increasingly cheap goods to the rest of the world because it needs to produce more to meet the sort of GDP targets it sets for itself every year.

That effectively means that you've got two sides of the equation. Domestic demand internally is very weak and meanwhile China is supplying increasingly cheap goods to the rest of the world because it needs to produce more to meet the sort of GDP targets it sets for itself every year.

So that creates a picture in which China is effectively exporting more disinflationary pressures to the rest of the world and that's really fueled a lot of these tariff debates not just within the US but within the EU too.

So that creates a picture in which China is effectively exporting more disinflationary pressures to the rest of the world and that's really fueled a lot of these tariff debates not just within the US but within the EU too.

So that creates a picture in which China is effectively exporting more disinflationary pressures to the rest of the world and that's really fueled a lot of these tariff debates not just within the US but within the EU too.

A lot of countries are very worried about Chinese overcapacity and China basically flooding the markets with cheap goods that it can do cheaper because it's got the scalability, it's got the cheap logistics infrastructure, and labor is still very, very competitive compared to these developed economies.

A lot of countries are very worried about Chinese overcapacity and China basically flooding the markets with cheap goods that it can do cheaper because it's got the scalability, it's got the cheap logistics infrastructure, and labor is still very, very competitive compared to these developed economies.