Economic deviation concerns mount
While the trade talks will take the center stage on June 10, economists and market analysts have expressed concern about the economic deviation of the US and China. Herrero commented:
“We need to focus on constant deflation pressures in China and creep inflation in the US, which outlines the ongoing economic deviation.”
Inflation and trade data from China created significant interest on 9 June before the business talks resumed. In May, the consumer value fell 0.1% year-on-year (YOY), matching the fall of April, while the manufacturer’s prices slipped 3.3% (YOY) after falling 2.7% in April.
East Asia Ekon commented on inflation figures, said:
“China – PPI pulls down inflation. The CPI was surprisingly firm in May, the core continued to show a reversal with a 2024 deflation. Overall,, however, the general indicators are very weak. The leads for the core are beginning to deteriorate again, and will once again be negative by the PPI Defaler.”
Business data outlined the impact of tariffs on the demand for US goods, underlining the importance of this week’s trade talks.
Exports increased 4.8% yoy in May, below 8.1% in April, while imports slipped 3.4%, declining by 0.2% in April. Business conditions with the US attracted special interest.
East Asia Ekon commented on the trading data of May, stating:
“China – Exports continue to fall sharply to the US. Composite trade trends – strong exports, weak imports, and remain in a large trade surplus – but trump tariffs are creating major changes in the structure of exports. This year direct shipments have fallen by 40% for the US, and since 2013, it is not low.”
Markets Eye London Trade Deal as uncertainty
On Tuesday, June 10, Hong Kong and mainland China markets showed a silent response to overnight trade development. The mainland CSI 300 and the Shanghai Composite Index rose 0.18% and 0.12% respectively, while the Hang Seng Index increased by 0.18% in early trading.
However, despite the US sanctions targeting China’s progress in AI and Tech, the magnificent 7 continues to reduce China’s technical field. The roundhill China dragon ETF is 21.91% year-over year-over, while the roundhill is a luxurious seven ETFs below 2.11%.
Continuous deviation highlights market ideas on China that is capable of moving in technology and AI space despite American restrictions.