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Asia Economics | Asia Pacific The Viewpoint: Why the RMB will not follow the yen path of 1985-95 We don't expect the RMB to appreciate significantly given persistent deflationary pressures and need to keep monetary policy accommodative. Pursuing currency appreciation on its own would exacerbate deflation, might be insufficient to secure a trade deal, and wouldn't bring sustainable rebalancing. Key Takeaways In this report, we draw on the lessons from Japan's currency appreciation after 1985 and highlight th ...

Key takeaways from our recent client conversations around the world. June 30, 2025 04:01 AM GMT Global Economic Briefing | North America M Idea The Weekly Worldview: The Hardest Questions: From Beijing to Berlin M A good friend of mine likes to say that the main reason that he forecasts is to find out why he was wrong. Our view of a meaningful deceleration in the US and the global economy from tariffs and other policies has yet to play out. We find ourselves waiting. So, while we wait, we take stock of the ...

Asia Pacific Economic Research J P M O R G A N Haibin Zhu (852) 2800-7039 haibin.zhu@jpmorgan.com JPMorgan Chase Bank, N.A., Hong Kong Branch Grace Ng (852) 2800-7002 grace.h.ng@jpmorgan.com JPMorgan Chase Bank, N.A., Hong Kong Branch Tingting Ge (852) 2800-0143 tingting.ge@jpmorgan.com JPMorgan Chase Bank, N.A., Hong Kong Branch Tongfang Yuan (852) 2800-0085 tongfang.yuan@jpmorgan.com JPMorgan Chase Bank, N.A., Hong Kong Branch China: 2025 Mid-year economic outlook We have emphasized three themes in China' ...

June 23, 2025 11:47 AM GMT Investor Presentation | Asia Pacific M Foundation Lingering Deflation Despite Tariff Detente Morgan Stanley Asia Limited Robin Xing Chief China Economist Robin.Xing@morganstanley.com +852 2848-6511 For important disclosures, refer to the Disclosure Section, located at the end of this report. M Tariffs De-escalated, Challenges Remain 2025 GDP to sustain at 4.5%, with less tariff shock than seen before May 12th … 1.5 0.0 0.1 1.3 1.4 1.3 0.2 1.2 0.9 2.0 1.9 1.8 5.0 4.5 4.2 -2 -1 0 1 ...

September. Kelly. >> All right.So still looking maybe for them to lower rates in a few more months. Steve stay right there as we bring in Paul McCulley Pimco's former chief economist Paul always like to speak with you on the eve of these decisions. And so far, the preponderance of evidence has kind of been to the deflationary side of the tariff case.I mean, even what you see, apparel prices slightly lower. There's not a lot in any of the reports up until now, that point towards a lot of price hikes througho ...

16 June 2025 | 1:21PM HKT China: Strong retail sales, softer industrial production and investment in May Bottom line: China's May industrial production (IP) and fixed asset investment (FAI) missed market consensus modestly, while retail sales beat meaningfully. IP growth moderated in May on the back of slowing export growth due to increased US tariffs, led by slower output growth in electrical machinery and chemical manufacturing industries. FAI growth declined further, weighed on mainly by slower infrastru ...

China Musings | Asia Pacific 3 New Shifts, 1 Sticky Theme We address three changes that have taken place since our mid- year outlook (trade talks, trade-ins, and the trickle of reform), and one that hasn't: why deflation remains the core macro constant. June 12, 2025 08:24 AM GMT • Allocated trade-in funding is used up in some regions: According to official disclosures, the central government has allocated and distributed two batches of trade-in funds. Rmb81bn on January 6, and another Rmb81bn in late April ...

Core Insights - The FMCG sector in China continues to experience price deflation, leading to slower overall value growth, with a 0.8% annual value growth in 2024 supported by a 4.4% volume growth but hindered by a 3.4% decline in average selling prices [3][5][24] Market Performance - In 2024, the quarterly growth rates for China's FMCG were 1.5% in Q1, 1.8% in Q2, -0.6% in Q3, and a slight rebound to 0.4% in Q4. The first quarter of 2025 saw a 2.7% growth compared to the same quarter in the previous year, aided by improved macroeconomic indicators and government policies [4][5] - Home care led FMCG growth in 2024 with a 2.4% annual increase, followed by packaged food at 2.0% and beverages at 1.5%. Personal care, however, declined by 2.3% [7][10] Category Trends - In Q1 2025, home care grew by 6.1%, personal care rebounded with a 4.0% increase, and packaged food rose by 3.2%, while beverage growth stagnated at 0.5% [11] - The premium segment outperformed the overall market in categories like juice, instant coffee, toothpaste, and sanitary pads, driven by innovations and product upgrades [22] Channel Dynamics - The overall channel mix for FMCG remained stable, with grocery and super/mini formats outperforming in Tier 3 and Tier 4 cities, while club warehouses grew in higher-tier cities [12] - Online channels saw rapid growth in Douyin, while community group buying and horizontal marketplaces faced declines. Vertical grocery e-commerce grew by 26.0% in 2024 [15][16] Brand Competition - Domestic brands gained market share from foreign brands, claiming 76% of the market in 2024, with intense competition leading to the top five brands losing share in over half of FMCG categories [18][21] - The report suggests that brands must choose between specializing in the premium segment or competing in mass/mainstream segments to succeed in the current environment [24][25]

11 June 2025 | 12:11AM HKT China Consumer Staples: May Check In and Consumer Corp. Day Wrap: A bumpy road with policy swings, channel shift amid deflation We hosted multiple staple companies at our Consumer & Leisure Corporate Day and performed channel checks in the past weeks. We are seeing a bumpy road of demand recovery and still largely slow 2Q-to-date run-rates across staples sub-sectors, esp. for spirits, beer, and dairy. Recent policy tightening in alcohol consumption by government officers and civil ...