The bank downgraded China from “overweight” to “neutral,” citing economic headwinds, political unpredictability, and impending U.S. elections. JP Morgan has lowered its estimates for the success of the Chinese market, joining UBS and Nomura in doing so. This year, the CSI 300 index has dropped by 5.6%, placing it among the worst performers worldwide. China’s economy
There is growing uncertainty over China’s GDP and whether it can meet the 5% growth objective. The manufacturing PMI index contracted for the fourth straight month in August, falling to 49.1. Recoveries are further hampered by poor consumption, weak industrial production, and the real estate crisis. China’s GDP growth dropped from 5.3% to 4.7% in the second quarter. China’s economic problems are just getting worse.
JP Morgan also issued a warning about the dangers of growing tariffs and a new trade war with the United States, which might put further pressure on China’s economy. According to analysts, domestic instability, persistent U.S.-China tensions, and changes in the supply chain will all contribute to China’s long-term economic downturn. China’s economic future is becoming increasingly concerned as a result of recent trade actions, such as Canada’s 100% tariffs on Chinese electric vehicles, which are reminiscent of similar acts taken by the US and the EU.
