25 June 2025 China Macro Tracker Economics Domestic consumption becoming brighter Middle East tensions: Assessing the potential of oil price shocks on China The global price of Brent crude oil spiked on the back of increased tensions in the Middle East, but has since declined (under USD70/b). While there is still a risk of oil price volatility, our Oil team expects oil prices to settle back down to USD65/b by Q4 if de-escalation is sustained as a base case (see Oil market flash, 23 June). 18% of China's ene ...

Looking beyond the carry Global -4 -2 0 2 4 6 8 10 Jan-25 Feb-25 Mar-25 Apr-25 May-25 USDbn -25,000 KTB MSB -20,000 -15,000 -10,000 -5,000 0 5,000 10,000 15,000 20,000 25,000 30,000 USDm Global bond flows compass Fixed Income Source: FSS, Bloomberg, HSBC Figure 1. Monthly trends in offshore bond flows of EM sovereign debt Note: *For period, see Table 1. Source: Central bank websites, HSBC Disclosures & Disclaimer 16 -19 June, The May Fair Hotel, London Register This report must be read with the disclosures ...

China Macro Tracker Economics Increased support for people's livelihood Trade: New round of China-US talks with export controls in focus After China-US trade tensions heated up in recent weeks on claims that each side had violated the consensus reached in Geneva trade talks, a phone call between President Xi and President Trump on 5 June appeared to steer the situation back on track. Subsequently, in person high-level meetings were scheduled in London starting from 9 June. Similar to the Geneva talks, the U ...

Asia Economics Comment Economics China and the 'tariff cascade' China Trade tensions between the US and China cast a wide shadow. Bilateral trade is bound to suffer, of course, even if tariffs may be rolled back under an eventual deal. However, the bigger issue for China, and arguably the world, is whether restrictions will also be imposed by other economies on Chinese imports. Two mechanisms are at play. One, competitive pressure from US-diverted Chinese shipments could raise protectionist demands. Two, th ...