Why China Is Behind The Global Luxury Slowdown

Trump

Trump, the bitcoin reserve and the future of crypto

What’s Stopping The U.S. From Pumping More Oil?

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108120681-1742877286599-gettyimages-2206472137-vcg111556724938-820x547.jpeg" alt="" class="wp-image-601538" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108120681-1742877286599-gettyimages-2206472137-vcg111556724938-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108120681-1742877286599-gettyimages-2206472137-vcg111556724938-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108120681-1742877286599-gettyimages-2206472137-vcg111556724938-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108120681-1742877286599-gettyimages-2206472137-vcg111556724938-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108120681-1742877286599-gettyimages-2206472137-vcg111556724938-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108120681-1742877286599-gettyimages-2206472137-vcg111556724938-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Attendees pose for a group photo before the opening ceremony of the China Development Forum 2025 at the Diaoyutai Guesthouse on March 23, 2025, in Beijing. China News Service | China News Service | Getty Images</figcaption></figure>



BEIJING — China courted the executives of major U.S. businesses at an annual conference this week in a sign of how Beijing seeks to offset trade pressures, rather than retaliate forcefully.



China has long sought to attract foreign investment as a way to bolster growth, while tapping business interests for potential influence on the White House, particularly under U.S. President Donald Trump. The U.S. has twice increased tariffs across all Chinese goods since January, but Beijing has only announced targeted duties and restrictions on a handful of American companies.



Conversation on the sidelines of the state-organized China Development Forum this week in Beijing reinforced a more conciliatory stance than official rhetoric this month about how China is prepared to fight “any type of war” with the United States.



Chinese conference attendees weren’t that focused on what can be done to respond to U.S. tariffs, Stephen Roach, senior fellow at Yale Law School’s Paul Tsai China Center, told CNBC.



“The questions I’ve been getting more [are], why is Trump doing this? What is he trying to achieve? What does he think it takes to really make America great?” Roach said. He has attended the event since the early 2000s.



“My answer is this is an unprecedented period for America’s role in the world economy. We’re going back to a tariff regime that history tells us can be extremely destructive,” Roach said, adding he expects more policy uncertainty in the U.S. and around the world “for a long, long time.”



U.S. stocks have swung in recent weeks as investors try to assess the economic impact of Trump’s changing plans for tariffs on major U.S. trading partners. U.S. Federal Reserve Chair Jerome Powell last week said tariffs could delay progress on lowering inflation in the U.S.



<h2 class="wp-block-heading" id="h-a-message-of-reassurance"><a></a>A message of ‘reassurance’</h2>



At this week’s conference, China was trying to send a message of “reassurance” — on how it plans to boost consumption and how the country is headed in a “modestly positive direction” relative to what is happening in the U.S., said Scott Kennedy, senior advisor and trustee chair in Chinese business and economics at the Center for Strategic and International Studies, a think tank based in Washington, D.C.



If the U.S. imposes significantly large tariffs in early April, “then you go from managing costs and de-risking to possibly de-coupling,” Kennedy told CNBC. “And then that might mean the game is up. So I think the level of anxiety is pretty high. And that’s why China is trying to provide this message of reassurance.”



The Trump administration has threatened a swath of new tariffs on major trading partners starting early April. China has increased its trade with Southeast Asian countries and the European Union, but the U.S. remains Beijing’s largest trading partner on a single-country basis.



The China Development Forum ran Sunday and Monday. Apple CEO Tim Cook was among the executives who attended, but Tesla CEO Elon Musk was not.



“The increased optimism this year compared to last year at the CDF has been just so heart warming,” Ken Griffin, CEO of hedge fund Citadel, said during an official panel at the forum.



Trump “is committed to American companies having access to a global market,” Griffin said. “And the President is willing to use tariffs to seek to enforce this worldview.”



<h2 class="wp-block-heading" id="h-first-step-toward-xi-trump-meeting"><a></a>First step toward Xi-Trump meeting?</h2>



Also on Sunday, U.S. Republican Senator Steve Daines met Chinese Premier Li Qiang in Beijing — the first time a U.S. politician has visited China since Trump began his latest term in January.



“This was the first step to an important next step, which will be a meeting between President Xi and President Trump,” Daines told the Wall Street Journal. “When that occurs and where it occurs is to be determined.”



The White House did not immediately respond to a request for comment.



Li urged cooperation and said no one can gain from a trade war, according to state media.



FedEx CEO Raj Subramaniam, Boeing Senior Vice President Brendan Nelson, Cargill CEO Brian Sikes, Medtronic CEO Geoffrey Martha, Pfizer CEO Albert Bourla, Qualcomm CEO Cristiano Amon, UL Solutions CEO Jennifer Scanlon and U.S. China Business Council President Sean Stein were also present at Daines’ meeting with Li, according to a foreign media pool report.



China, the world’s second-largest economy, remains a significant source of revenue for many multinational corporations, not to mention a major part of their supply chains.



Despite its efforts to bolster international business ties, the country has warned of countermeasures on U.S. tariffs and taken incremental steps.



Following U.S. sanctions on Chinese telecommunications giant Huawei during Trump’s first term as president, Beijing launched an unreliable entities list that restricts foreign business activity with China.



China added Calvin Klein parent PVH and a few other U.S. companies to the list after this year’s tariff increases. On Monday, China also said it would soon reveal new measures that would give it a legal basis for countering foreign pressure.



<h2 class="wp-block-heading" id="h-economic-factors"><a></a>Economic factors</h2>



For U.S. companies in China, the state of the economic recovery has also been an important factor for local business plans.



Since late September, China has stepped up efforts to support the economy. Top policymakers earlier this month affirmed stimulus plans and a recent effort to encourage private-sector tech entrepreneurs in the wake of DeepSeek’s artificial intelligence breakthroughs.



“This year, you feel a lot of positive momentum beginning in China. So I feel like recovery is underway,” Wendell P. Weeks, CEO of Corning, told CNBC.



However, China’s economy has struggled with deflationary pressure and a real estate slump, weighing on regional growth prospects for international businesses.



Even Beijing’s push to support high-tech manufacturing has so far only added an average 1.1 percentage points to gross domestic product growth in each of the last three years — not enough to offset the 1.7 percentage point drag from real estate during that time, according to Goldman Sachs estimates.



“We will remain optimistic because the role of technology is important, I think more than ever,” Qualcomm’s Amon told CNBC. “I think technology is going to be part of economic growth.”

108120681-1742877286599-gettyimages-2206472137-vcg111556724938

China invites U.S. business leaders to Beijing as it tries to decipher Trump’s trade plans

How Japan’s largest AI unicorn is shaping the future of deep learning

How much U.S.-Canada tariffs will cost Americans

The Federal Government Is Bloated – Will DOGE’s Layoffs Even Make A Dent?

Why Salt Lake City Is One Of The Hottest Job And Housing Markets In The U.S.

A Practical Quantum Computer Is Coming! But When?

The U.S.-Canada trade war could signal a shift in economic ties

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1-820x461.jpeg" alt="" class="wp-image-544690" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1.jpeg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">China’s central bank supplied 14-day cash to its banking system for the first time in months on Monday and at a lower interest rate, signaling its intent to further ease monetary conditions.
Jiang Qiming | China News Service | Getty Images</figcaption></figure>



China kept its key lending rates unchanged on Thursday, as Beijing juggles propping up growth and stabilizing its currency amid mounting trade frictions.



The People’s Bank of China held the 1-year loan prime rate at 3.1% and the 5-year LPR at 3.6%, where they have been since a quarter-percentage-point cut in October.



The rate decision follows the U.S. Federal Reserve’s move to hold benchmark interest rates. Fed officials, however, indicated likely half a percentage point of rate cuts through 2025.



China’s LPRs — normally charged to banks’ best clients — are calculated monthly based on designated commercial lenders’ proposed rates submitted to the PBOC. The 1-year LPR influences corporate and most household loans in China, while the 5-year LPR serves as a benchmark for mortgage rates.



The PBOC has kept its 7-day rate, the country’s main policy rate, steady at 1.5% since a cut in October, as the central bank defends the yuan that faces downward pressure amid threats of higher tariffs.



“Policymakers recognize the country’s robust growth momentum while remaining cautious due to persistent pressures ahead,” said Bruce Pang, adjunct associate professor at Chinese University of Hong Kong, citing risks from trade tensions, Fed’s steady policy stance, and Chinese banks’ already-thin net interest margins.



China’s economy showed a modest pick up in the first two months of the year, with retail sales growing 4.0% from a year earlier, faster than the 3.7% rise in December. Industrial output also came in higher than expectations, expanding 5.9% on year.



Inflation data, however, underscored the need for more policy support for a sustainable economic recovery. Consumer price inflation in February fell into negative territory for the first time in over a year while producer price deflation persisted.



Beijing has made boosting domestic consumption a top policy priority this year to cushion the impact from an escalating trade war overseas.



“With the stronger call to support consumption, there is a growing chance that China will cut rates in the next meeting or so,” said Gary Ng, senior economist at Natixis. “If retail and home sales do not improve, especially if inflation stays weak, we may see a rate cut as early as April,” he added.



Following the rate announcement, the yuan was little changed, trading at 7.2280 against the greenback while yield on the 10-year government bonds fell more than 2 basis points to 1.932%.



Chinese offshore yuan has regained some ground in recent weeks after hitting a 16-month low in January. It has weakened nearly 1.8% since U.S. President Donald Trump’s election win in November.



<h2 class="wp-block-heading" id="h-easing-ahead"><a></a>Easing ahead</h2>



China’s top officials have pledged to ramp up monetary easing measures this year, including interest rate cuts “at appropriate time,” as Beijing has set an ambitious growth target of “around 5%.”



Goldman Sachs economists in a note earlier this month maintained their forecast for two 20-basis-point cuts in the second and fourth quarter this year. The investment bank also expects two 50-basis-point cuts in the reserve requirement ratio, or RRR, which determines the amount of cash that banks must hold as reserves, in the first and third quarter.



Earlier this month, PBOC Governor Pan Gongsheng reiterated that the bank wanted to maintain currency stability at “a reasonable and balanced level.” Preventing the yuan from weakening too quickly could be seen as a sign of goodwill in the lead up to any negotiation with Trump on a trade deal to put a ceiling on tariffs.



While the cuts are yet to materialize, analysts anticipate any policy measures by the PBOC are likely to hinge on Trump’s trade policy moves.



Trump has slapped new tariffs of 20% on Chinese imports and threatened more as early April. The fresh tariffs are seen straining China’s exports, a lone bright spot in the faltering economy.



Exports growth in the world’s second-largest economy slowed more than expected in January and February, while imports during the two months clocked their sharpest fall since July 2023.

107077973-1655689250819-gettyimages-1402870855-vcg111387492036

China’s central bank follows U.S. Fed in keeping rates steady as tariff threats pressure yuan

How Chips Are Made In The U.S.| CNBC Marathon

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="410" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108099964-1739192857747-gettyimages-1499178181-vcg111441609233-820x410.jpeg" alt="" class="wp-image-599301" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108099964-1739192857747-gettyimages-1499178181-vcg111441609233-820x410.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108099964-1739192857747-gettyimages-1499178181-vcg111441609233-300x150.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108099964-1739192857747-gettyimages-1499178181-vcg111441609233-160x80.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108099964-1739192857747-gettyimages-1499178181-vcg111441609233-768x384.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108099964-1739192857747-gettyimages-1499178181-vcg111441609233.jpeg 884w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The Chinese national flag fluttering with the Lujiazui Financial District in the background. Vcg | Visual China Group | Getty Images</figcaption></figure>



A rally in Chinese stocks since the start of the year is prompting investors to predict that mainland shares will outperform their American peers in a sign that attractive valuations are trumping the idea of American exceptionalism.



Last week, the S&amp;P 500 slipped into correction territory for the first time since 2023. In contrast, the MSCI China index has gained 19% since the start of the year, to Mar. 9, according to Goldman Sachs, marking its best start to a year in history.



The contrasting fortunes mark a swift turnaround from just a few months ago when many investors believed the U.S. was uniquely positioned to weather economic and political storms buffeting other countries. Chinese stocks were also languishing due to regulatory worries and concerns over the health of the Chinese economy.



A lot has changed since.



U.S. President Donald Trump’s tariffs policy has fanned speculation of an economic slowdown in the world’s largest economy.



Meanwhile, in China, optimism around the country’s artificial intelligence capabilities has intensified since the introduction of DeepSeek’s R1 model earlier this year.



“The U.S. has had a good period, and that’s coming to an end because Trump’s policies are very anti-economy. China has had a very bad period, but it looks as if it’s starting to recover,” Richard Harris, CEO of Port Shelter Investment Management, told CNBC.



“I call it the great pivot. Obviously, over the last 5 to 7 years, U.S. markets have been dominant. The Magnificent Seven have gone to the moon … [But] it seems difficult to see that there’s much more to go,” Harris said.



The tech-heavy Nasdaq Composite is also in correction territory, dragged by a selloff in Magnificent Seven shares, driven by recession concerns and trade war fears. The Magnificent Seven comprises Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla.



“The U.S. stock market capitalization, relative to world stock market capitalization, made an all-time peak at the end of last year amidst the then prevailing talk of ‘American exceptionalism,’” said Chris Wood, global head of equity strategy at Jefferies Hong Kong Global.



In the same vein, Eastspring Investments’ Asia equity portfolio specialist Ken Wong believes that the American exceptionalism trade ended earlier this year. Expected fiscal tightening and Trump’s tariff war are expected to slow U.S. economic growth to below 2% this year, Wong said, compared to consensus estimates of 2.2%.



The U.S. saw real GDP growth of 2.8% in 2024 compared to 2023. The U.S. debt and deficit situation became more severe during President Donald Trump’s first month in office, and since then, he has prioritized addressing the government’s fiscal issues.



Stagflation is a key risk in the U.S. as the tariff war could depress economic activity to the point of recession while simultaneously increasing inflation, Wong added.



That could mean the slump in U.S. equities may not be done.



“We see the selloff in U.S. equities as having further to go,” Deutsche Bank wrote in a note published over the weekend. “With trade policy uncertainty likely to continue to weigh, at least until April 2, we expect positioning to continue to unwind.”



“A move to the bottom of the positioning band which is where it went to in the last trade war, would take the S&amp;P 500 down to 5,250,” said the bank’s chief strategist Binky Chadha. That will mark a more than 7% slide from Monday’s close of 5,675.12.



On the other hand, China tech shares have been on a tear since DeepSeek’s breakthrough. The Chinese government has also actively signaled its support for its technology sector, with plans to increase funding in the cards. 



The Hang Seng Tech Index, which tracks some of the largest Chinese technology companies listed in Hong Kong, has risen over 30% since the start of the year, according to data from LSEG.



“Investors should be looking to sell rallies in the U.S. and buy corrections in Europe and China where there is the most evidence of improving fundamentals,” Wood told CNBC.



To be sure, the sheer pace of China’s rally could portend a correction soon, according to analysts at Bank of America.



“Performance of&nbsp;the&nbsp;HSCEI/MSCI China in the past 17mths trended closely to the trajectory a decade ago, making us worry that we might be approaching some correction&nbsp;soon,” analysts at the Bank of America wrote in a report published on Monday.



The bank’s analysts believe that there are “fundamental similarities” between the current cycle and 10 years ago in terms of the country’s policy stimulus and reforms, economic re-balancing and technological breakthrough.



<h2 class="wp-block-heading" id="h-attractive-valuations"><a></a>Attractive valuations?</h2>



JPMorgan’s head of Asia Pacific equity research, James Sullivan,&nbsp;said valuations are extremely attractive relative to global counterparts in markets such as China, where investor positioning continues to be extremely low.&nbsp;



The MSCI China Index is currently trading at 13.38 times its projected one-year earnings, according to FactSet. This compares to the S&amp;P 500, which is trading at 20.72 times projected one-year earnings.



“I think China’s market is going to outperform the U.S. markets for the next four years, and I don’t think it has anything to do with Trump. I think it has everything to do with starting valuation,” said&nbsp;Michael Gayed, publisher of The Lead-Lag Report, attributing his bullish stance largely to a “tremendous underinvestment” in China.



“China has been not only from an investment standpoint, dead money, for a very long time, but it’s also become a source of anxiety and risk for financial advisors to even consider taking a contrarian bet for their own clients investing in China funds.”



Aside from cheaper valuations, other factors are also fueling the bullish momentum in Chinese markets. China’s A shares have been quite depressed for some time, while the U.S. has been on a tear for the last six years or so, Harris said.



“Of course, average valuations are going to show a difference like that,” he said.



“I’m not worried so much about valuation. It’s important, but it’s not the 100% factor. What is more important at the moment, is that there’s much more momentum in the Chinese market,” Harris said, adding that China’s government stimulus has trickled into the economy and markets.



In a report released last week, Citi Research upgraded China to overweight, while downgrading U.S. equities to neutral after being overweight since October 2023, expecting more negative data prints from the country’s economy.



However, Citi maintained that its neutral outlook is a three—to six-month view, emphasizing that the U.S. will remain one of the leaders of AI, even if jointly with China.



“In the bigger picture, we doubt that the AI bubble is already fully played out,” the investment bank’s strategists led by Dirk Willer wrote.

108099964-1739192857747-gettyimages-1499178181-vcg111441609233

China markets are set to outperform Wall Street as U.S. exceptionalism comes to a pause

How autonomous driving technology supports Japan’s aging truck drivers

How Elon Musk’s Trump support could hurt — or help — Tesla

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108117314-1742278295482-gettyimages-2198772571-_dsc2763-820x461.png" alt="" class="wp-image-598814" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108117314-1742278295482-gettyimages-2198772571-_dsc2763-820x461.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108117314-1742278295482-gettyimages-2198772571-_dsc2763-300x169.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108117314-1742278295482-gettyimages-2198772571-_dsc2763-160x90.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108117314-1742278295482-gettyimages-2198772571-_dsc2763-768x432.png 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/03/108117314-1742278295482-gettyimages-2198772571-_dsc2763.png 1200w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



The Wall Street adage to never bet against the U.S. consumer still holds true — to some degree. February’s retail sales, while lower than expected, still registered an increase. For the skeptics, that is like desperately squinting for a silver lining. It might very well be. But the dark clouds, in the form of U.S. President Donald Trump’s tariffs, are more ominous than usual.



Tariffs, after all, are a tax on imported goods that will likely be passed on to the consumer. That has weighed on consumer sentiment, as measured by surveys like those from the University of Michigan. Even U.S. National Economic Council Director Kevin Hassett acknowledged that Trump’s tariffs will cause some uncertainty.



The Organisation for Economic Co-operation and Development has already lowered its growth outlook for the U.S. because of that. While the Trump administration is confident that stocks will recover their footing, strategists may also start revising downward their market forecast if the outlook does not clear up.

108117314-1742278295482-gettyimages-2198772571-_dsc2763

Markets rise for the second day as U.S. consumers continue spending

CNBC

Why China Is Behind The Global Luxury Slowdown

Trump, the bitcoin reserve and the future of crypto

What’s Stopping The U.S. From Pumping More Oil?

China invites U.S. business leaders to Beijing as it tries to decipher Trump’s trade plans

How Japan’s largest AI unicorn is shaping the future of deep learning

How much U.S.-Canada tariffs will cost Americans

The Federal Government Is Bloated – Will DOGE’s Layoffs Even Make A Dent?

Why Salt Lake City Is One Of The Hottest Job And Housing Markets In The U.S.

A Practical Quantum Computer Is Coming! But When?

The U.S.-Canada trade war could signal a shift in economic ties

China’s central bank follows U.S. Fed in keeping rates steady as tariff threats pressure yuan

How Chips Are Made In The U.S.| CNBC Marathon

China markets are set to outperform Wall Street as U.S. exceptionalism comes to a pause

How autonomous driving technology supports Japan’s aging truck drivers

How Elon Musk’s Trump support could hurt — or help — Tesla

Markets rise for the second day as U.S. consumers continue spending

H-1B Visa Debate: Are Foreign Workers Taking American Tech Jobs?

News Tips

Advertise With Us

CNBC

Why China Is Behind The Global Luxury Slowdown

Trump, the bitcoin reserve and the future of crypto

What’s Stopping The U.S. From Pumping More Oil?

China invites U.S. business leaders to Beijing as it tries to decipher Trump’s trade plans

How Japan’s largest AI unicorn is shaping the future of deep learning

How much U.S.-Canada tariffs will cost Americans

The Federal Government Is Bloated – Will DOGE’s Layoffs Even Make A Dent?

Why Salt Lake City Is One Of The Hottest Job And Housing Markets In The U.S.

A Practical Quantum Computer Is Coming! But When?

The U.S.-Canada trade war could signal a shift in economic ties

China’s central bank follows U.S. Fed in keeping rates steady as tariff threats pressure yuan

How Chips Are Made In The U.S.| CNBC Marathon

China markets are set to outperform Wall Street as U.S. exceptionalism comes to a pause

How autonomous driving technology supports Japan’s aging truck drivers

How Elon Musk’s Trump support could hurt — or help — Tesla

Markets rise for the second day as U.S. consumers continue spending

H-1B Visa Debate: Are Foreign Workers Taking American Tech Jobs?

News Tips

Advertise With Us

Newsletters