Views on China for 2025 and beyond

Tuesday 28 January 2025

Cross Asset

Views on China for 2025 and beyond

January 2025 | Unlike a year ago, when we described the policy stance as complacently passive, Chinese leadership has now eliminated all ambiguity. It is explicitly advocating for unconventional policies that include monetary easing and a more expansionary fiscal policy. This pivot is probably triggered by an atypical systemic crisis, where local governments were tight on money, struggling to pay corporates, banks and civil servants. Additionally, the election of Donald Trump as US president further seals the deal for such a shift. As a result of this newfound clarity in leadership, we expect a series of measures aimed at stabilizing the economy.

01 | China's leadership explicitly advocates for unconventional policies that include monetary easing and a more expansionary fiscal policy. However, we believe these policies will not offset the existing structural drags and US tariff impacts completely.

02 | In the case of aggressive US trade protectionism and export controls, China should keep its expansionary fiscal stance for longer than currently expected.

03 | Chinese equity will be influenced by the incoming Trump administration's foreign policy, while additional stimulus could support Chinese markets, particularly domestic stocks. We maintain a neutral stance favoring domestic markets.

Views on China for 2025 and beyond

Important Information

Unless otherwise stated, all information contained in this document is from Amundi Asset Management as of January 17, 2025. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product or service. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not indicative of future results. Amundi US is the US business of Amundi Asset Management.

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©2025 Amundi Asset Management

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