Chinese stocks will have the Caixin manufacturing PMI figures ahead on Monday.
CHINA 50 – Daily Chart
The price of the China 50 has been stuck in a range between around 12,930 and 14,359. The coming data could test either of those targets.
The latest data, released at 9:45am HKT on Monday will be another chance to get some movement above the 50 level. Last month’s 50.1 was just in expansionary mode but analysts see 50.3 ahead for February. However, any improvement for the month could be tainted by the tariff threat.
Donald Trump said two days ago that he planned to tax goods from China with a new 10% tariff. Imports from China already face a tax at the border of at least 10%, after a Trump tariff order that went into effect earlier this year. China’s ministry of foreign affairs said it “strongly” communicated its “dissatisfaction and resolute opposition” to the plan. Trump also said he was moving forward with threatened 25% tariffs on imports from Canada and Mexico, which are set to start on 4 March.
The escalating tariffs put further pressure on China’s economy which has been unable to create real strength. The 5% GDP growth rate has been a bright spot but foreign investors have been slow to return, but that is likely coinciding with the AI-driven rally that powered companies like Nvidia and capital has remained in the domestic market.
Meanwhile, the People’s Bank of China said on Sunday that a meeting of high-level government bodies would lead to increased credit allocations to private, small and micro-enterprises and further streamlining of financing for private markets.
Pan Gongsheng, governor of the PBC, stated during the recent meeting that the central bank will provide financial institutions with further support to channel financial resources into the private economy, and implement a moderately loose monetary policy,
“The financing costs for private enterprises are expected to remain at low levels for an extended period, thereby creating a favorable macro-monetary and financial environment for their development,” Pan said.
Further efforts to support the economy can help with the looming tariffs and manufacturing data on Monday is a near-term catalyst. China daily noted that the economy hit a record in 2024 and said Western media has a fixation with economic doom narratives for China.
