China unveils fiscal support plan amid economic challenges and tariff concerns

The recent correction in Chinese internet stocks has been seen as a buying opportunity by some investors due to attractive valuations and solid growth prospects.

Disappointment in Beijing's Stimulus Measures

Financial institutions like Edmond de Rothschild express disappointment in Beijing's stimulus measures, believing they will not address the structural issues in the economy.

Positive Stance on Chinese Equities

Despite this, Edmond de Rothschild maintains a positive stance on Chinese equities while reducing investments in emerging markets and increasing exposure to U.S. equities.

Concerns about China's Fiscal Support Measures

UBS Global Wealth Management also reacts to China's fiscal support measures, including a 10 trillion renminbi local government debt resolution plan aimed at reducing hidden debt risks.

However, the lack of additional measures to stimulate consumption or address challenges in the real estate sector falls short of market expectations.

Decline in Hang Seng Index

The Hang Seng index has declined due to the absence of immediate fiscal stimulus, raising concerns about the pace of economic recovery in China.

Uncertainty in China's Economic Growth

Investors are uncertain about China's attempts to revive economic growth, especially in the real estate sector, and the potential impact of U.S. tariff hikes.

Adjustment of Investment Strategy

Mark Haefele of UBS adjusts his investment strategy within Chinese equities, favoring defensive and high-yielding sectors such as financials, utilities, energy, and telecommunications.

He believes that investment-grade bonds in China remain sound, with minimal impact on state-owned enterprises and financial institutions.

Neutral Stance on Chinese Equities

Haefele maintains a neutral stance on Chinese equities but is open to a more positive outlook if the market experiences a significant downturn and stimulus measures align with or exceed expectations.

Investment Climate in China

The evolving fiscal policy and international relations will continue to shape the investment climate in China, requiring investors to stay vigilant and adaptable.

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