Hannah Miao

The Middle East was one of the regions where Chinese exporters were finding new customers and growing their trade amid a downturn in trade with the U.S.

due to tariffs.

So that really puts into question one of those markets where you could potentially try to get more exports.

And in general, the bigger question is what the war in the Middle East will mean for global demand for Chinese products.

On one hand, there's a lot more interest now in Chinese renewable energy products like solar panels and EVs.

But on the other hand, energy prices could weigh on consumer demand.

It might cause customers to pull back on orders.

And it's adding to costs for Chinese manufacturers worldwide.

which could weigh on their profit margins as well.

So it's a bit of a mixed bag in terms of what the outlook looks like.

And like many other places in the world, it really depends on how long this war lasts and how severe it is.

Households are fairly cautious to spend, investment has slowed down, and the real estate market is still very much struggling.

And last year, China had set a growth target of around 5%, and it was really achieved in large part through exports.

And that has become an area of increased tension with trading partners.

The IMF has suggested that China should try to move away from relying on exports because it creates all these tensions around this global trade imbalance.

While the lower growth target does take some of that pressure off to really continue juicing GDP growth, policymakers are really doubling down on these goals of upgrading their industrial system and being technologically self-reliant.

So in terms of this competition between the U.S.

and China in key cutting edge technologies, China is really not letting up on that front.

Yeah, we've seen Anthropic and OpenAI release new models and updates recently that have shown a pretty big advancement in just how much these AI tools can do.

Anthropic's Cloud Code has really taken off.