China: split outlook
Observers are giving mixed reads on China’s market: some strategists see the start of a rebound, while others warn the underlying consumer problem remains unresolved. Stephen Jen of Eurizon argues China has “turned the corner” and could see a roughly 10% stock gain by year‑end. (bloomberg.com) A separate report says policymakers still favour industrial expansion over boosting household consumption, leaving growth unbalanced, and that weakness is already denting luxury demand — Richemont is being tested by cooling Chinese spending and is leaning more on U.S. and European markets. (prokerala.com, ad-hoc-news.de)
China’s markets are drawing opposite calls this week: one camp sees a rebound taking hold, while another says weak household spending still defines the economy. (bloomberg.com) Stephen Jen of Eurizon SLJ Capital said Chinese stocks could rise about 10% by the end of 2026, arguing Beijing’s support measures are lifting growth while valuations remain cheap. Bloomberg reported his note on April 14. (bloomberg.com) A Reuters poll published April 13 pointed the other way on the economy beneath the market. Economists forecast first-quarter growth of 4.8%, up from 4.5% in the prior quarter, but they also expected full-year 2026 growth to slow to 4.6% from 5.0% in 2025 as domestic demand stays weak. (usnews.com) The split turns on a basic question: can exports and industrial policy keep carrying growth if households are not spending enough. The International Monetary Fund said in February that China’s 2025 growth reached 5.0%, but domestic demand stayed subdued because the property slump and a weak social safety net hurt consumers’ willingness to spend. (imf.org) The International Monetary Fund said China needs more forceful fiscal support, stronger social protection and less reliance on public investment and industry-specific support if it wants consumption to lead growth. It said the 2026-2030 Five-Year Plan prioritizes raising consumption, but also said more policy change is needed. (imf.org) That consumer weakness is already showing up in luxury goods. Richemont, the owner of Cartier, has told investors that the United States and Europe have been carrying more of the business, while Greater China remained a smaller share after a long slowdown. (investing.com) Bank Vontobel estimates cited in February put Greater China at just under 20% of Richemont sales, making it the group’s second-largest market after the United States. Richemont said sales in China, Hong Kong and Macau rose 2% in that quarter, mostly on Hong Kong demand, which suggested stabilization rather than a broad consumer rebound. (investing.com) Richemont has also warned in its own filings that store traffic, travel patterns and broader economic conditions can hit sales, especially for a business tied to tourism and discretionary purchases. Those risks matter more when Chinese shoppers are buying less at home and abroad. (richemont.com) China’s next official checkpoint comes on April 16, when Beijing is due to release first-quarter gross domestic product and March activity data. If those numbers show stronger retail spending as well as solid output, the bullish case gets firmer; if not, the argument over whether China has really turned the corner will keep running. (usnews.com)
