Gene Ma

Head of China Research & APAC Chief Rep @iif; Formerly Tudor Investment, Evercore ISI, and Citics.

[Gene Ma @genemaIIF]

But foreign investors were still net sellers of Chinese bonds and equities in March-April. Chinese assets can be good candidates for hedging and diversifying risks. However, they have not become safe-haven assets in the eyes of global investors.

[Gene Ma @genemaIIF]

Chinese bonds, equities, and the currency held up well during the Iran shock, especially compared with many Asian peers. CGB yields fell, Chinese equities outperformed most regional markets, and the CNY was among the more stable major currencies.

[Gene Ma @genemaIIF]

More importantly, Chinese financial assets have exhibited relatively low correlation with major global markets over the past decade.

[Gene Ma @genemaIIF]

China’s goods surplus has become the focal point of the global trade debate, but the more interesting change may now be occurring in services.

Why China’s services trade matters for global imbalances https://t.co/tvGfeQVhW4 via @wef

[Gene Ma @genemaIIF]

For years, China’s large services deficit helped absorb some of the pressure generated by its manufacturing surplus. That offset, however, is becoming less reliable as China's service exports are likely to expand and the service deficit is likely to narrow.

[Gene Ma @genemaIIF]

Though it runs the world's largest goods trade surplus, China runs the largest services trade deficit.

[Gene Ma @genemaIIF]

However, China's service trades have been growing at twice the pace of goods trade.

[Gene Ma @genemaIIF]

Commentary: How China and Europe Should Manage Their Trade Tensions https://t.co/HjUIUaNVfX

[Gene Ma @genemaIIF]

Therefore, Hormuz's impact on China is much smaller than on its Asian neighbors.

[Gene Ma @genemaIIF]

China consumes 80% more energy than the US and more than twice as much as the EU.

[Gene Ma @genemaIIF]

Its sources of oil and gas imports are very diversified.

[Gene Ma @genemaIIF]

The strong export of copper, EVs, and batteries cannot be attributed to weak domestic demand. Their domestic sales have been strong over the past two years.

[Gene Ma @genemaIIF]

Did the weak Chinese household consumption channel excess output to the global market? Well, retail sales of consumer discretionary items were quite robust ytd, thanks to trade-in subsidies. Except for cars, the export growth of these consumer goods was modest in 2025.

[Gene Ma @genemaIIF]

Three examples of weak domestic sales but strong exports are rebar and cement, which suffered from plummeting construction and investment, and ICE cars, which domestic consumers are abandoning.

[Gene Ma @genemaIIF]

This resilience also cannot be explained by the “under-consumption & over-investment” narrative. In the first half of this year, consumption’s contribution (2.8 ppts) to GDP growth was three times that of capital formation (0.9 ppts).

[Gene Ma @genemaIIF]

Excluding shipments to the US, China’s exports rose by 9.4% y/y in the first eight months of the year. The strength of exports to markets outside the US cannot be explained by front-loading or rerouting.

[Gene Ma @genemaIIF]

While some rerouting and transshipment may have occurred via Vietnam, there is little evidence of similar activity through Mexico this year.