Economic Performance - China's GDP grew by 5.2% in Q2 2025, surpassing the 5.1% forecast by economists, but down from 5.4% in Q1 [2] - The stronger-than-expected growth has alleviated immediate pressure on policymakers to implement further economic stimulus [1][3] Policy Outlook - Analysts suggest that additional stimulus measures may be delayed until September if economic momentum weakens further [3] - Previous stimulus efforts have shown partial effectiveness, with improvements in manufacturing activity and exports [4] Trade Relations - U.S. tariffs on Chinese imports were escalated to 145% in April, leading to supportive measures from Beijing [5] - A truce was reached in May, with both countries agreeing to roll back most tariffs, followed by a framework agreement in June [6] Economic Vulnerabilities - Economists have called for stronger fiscal action, recommending up to 1.5 trillion yuan in stimulus to support household spending and mitigate the impact of U.S. tariffs [7] - Despite signs of resilience, underlying vulnerabilities in the Chinese economy remain a concern [8] Investment Opportunities - Investors are encouraged to monitor China-based exchange-traded funds (ETFs) such as iShares MSCI China ETF (MCHI) and KraneShares CSI China Internet ETF (KWEB) [9]

There are times when markets are driven by fear, keeping most investors away from what could be a life-changing trade or investment only because the rest of the media and sentiment decided to stay away from it. Today, that seems to be the case for stocks in China. There are several fundamental reasons to choose discounted quality stocks in this country, yet most of the market chooses to wait until it’s too late. One example could be the iShares MSCI China ETF NASDAQ: MCHI and how it has underperformed the N ...