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Bad news for China: In a major shock for China and growth, famous American multinational investment bank and financial services company, Goldman Sachs has once again lowered its targets for major Chinese stock indexes. Moreover, global banks like Goldman Sachs and Citigroup believe that the tariff war started by US President Donald Trump will have a bad effect on China’s economy. Here are all the details you need to know.
In the recent development, Goldman Sachs projected a slower growth for China at 4% in 2025 and 3.5% in 2026, which had earlier projected a growth rate of 4.5% and 4% for the same years respectively. Earlier, it was predicted that the Chinese economy would grow well till 2025, but now, multinational investment bank and financial services firm UBS has announced that it will grow only by 3.4%.
US-China trade tensions
A team led by Kinger Lau wrote in a note that US-China trade tensions have reached unprecedented levels and the trade tensions have raised fears of a global recession along with increasing risks of China and US, the two largest economies in the world separating in key areas such as capital markets, technology, and geopolitics, as per a report carried by news agency IANS.
The report by news agency IANS has quoted the note as saying that the 12-month target for the MSCI China Index has been cut to 75 from 81. On similar lines, it has also been reported that the target for the CSI 300 Index has been reduced to 4,300 from 4,500.
US-China trade war and impact
It should also be noted that all these actions come at the mid of a global trade wherein Beijing recently announced 125 per cent tariffs on US goods in response to US President Donald Trump’s 145 per cent tariffs on Chinese products. However, the markets also saw a small rebound on Monday after the US declared a pause on tariffs on phones, computers, and other consumer electronics that are imported from China.
After this major announcement was made, the MSCI China Index rose as much as 2.5 per cent. Along with MSCI Index, the CSI 300 Index gained up to 0.7 per cent. Notably, Goldman Sachs has typically remained positive on Chinese equities, even during periods of market downturn.
(With inputs from agencies)
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