China’s financial system remained resilient in Apr whilst US’ reciprocal and tit-for-tat tariffs kicked in. As with exports, the slowdown in industrial manufacturing (IP) was contained as frontloading continued in different markets after US paused its reciprocal tariffs with them, UOB Group’s economist Ho Woei Chen notes.
IP stays sturdy however retail gross sales and property market weakens in April
“The uncertainties impacted retail gross sales and concrete fastened property funding (FAI) which turned out weaker-than-expected in April. Having mentioned that, the m/m momentum has stayed constructive for retail gross sales and FAI whereas the surveyed jobless charges crept decrease. The property market remained a key concern for coverage makers as indicators reminiscent of dwelling costs, property funding and residential property gross sales softened in April.”
“Factoring within the near-term increase from the 90-day US-China commerce truce, we revise increased our forecast for China’s GDP progress for 2025 to 4.6% from 4.3%, with 2Q25 at 4.9% y/y (1Q25: 5.4%) and 4.2% y/y in 2H25. The uncertainty in China’s outlook stays excessive and hinges on whether or not there’s a sturdy commerce settlement between US and China in addition to the eventual tariff charges. China’s stimulus will lend additional help to stabilise its outlook.”
“We reiterate our forecast for a further 0.1%-point rate of interest minimize in 4Q25. Our projections for the 7-day reverse repo fee, 1Y LPR and 5Y LPR are at 1.30%, 2.90% and three.40% respectively at end-4Q25.”
