Investing in China: Steadier Ties Stronger Fundamentals

UBS maintains an Attractive rating on Chinese equities and tech, citing a stabilized US-China relationship and resilient export fundamentals. They specifically highlight AI monetization in tech and quality carry in fixed income as primary opportunities.

Key Takeaways

• 1.The Trump-Xi summit established a more stable US-China relationship, reducing the likelihood of sudden policy shocks.
• 2.Chinese Tech is the 'Most Preferred' equity sector, driven by emerging AI monetization and cloud service growth.
• 3.The CNY is expected to remain strong, with year-end targets of 6.6 and mid-2027 targets of 6.5 against the USD.

Table of Contents

• Steadier ties, stronger fundamentals
• Macro: Bumpy recovery buffered by exports
• Equities: Keep tech at the core, broaden into growth and yield
• Bonds: Higher carry, up in quality
• USDCNY: On a guided path
• Tech: 1Q earnings recap and latest pecking order
• Key financial indexes

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