China is likely to implement additional economic stimulus measures.

The yuan has slightly weakened after previously appreciating, as investors grow increasingly concerned about the U.S.-China trade relations. The U.S. has emphasized that certain Chinese goods may face import tariffs of up to 245%, largely in retaliation for China’s decision to raise import tariffs on U.S. goods by as much as 125%. This move is part of China’s broader countermeasures. However, China appears unlikely to be overly concerned with the U.S. import tariff figures, even as tensions escalate. Still, China maintains its desire to negotiate on the basis of equality to discuss current tariff issues.

China's economy grew 5.4% year-on-year in the first quarter of 2025, maintaining the same growth rate as the fourth quarter and exceeding market expectations of 5.1%. This marks the strongest annual growth rate in two years, amid ongoing economic stimulus measures. The latest GDP figures were supported by strong private bookings in March, with industrial output growing at the fastest pace since June 2021. This contributed to the highest increase in retail sales in over a year and a decline in the unemployment rate from a two-year high.

In terms of trade, exports continued to grow strongly as companies accelerated shipments ahead of expected tariffs, while imports declined. However, rising trade tensions with the U.S. have clouded the economic outlook and increased pressure for further policy support. Chinese policymakers stressed that China still has many tools to support domestic production. Premier Li Qiang pledged further economic stimulus, with boosting consumption remaining a top priority as the government seeks to offset the impact of higher U.S. tariffs. A policy planning meeting is expected to be held in late April to finalize upcoming measures after China announced increased fiscal spending and a higher budget deficit.

China's trade surplus surged to USD 102.64 billion in March, up from USD 58.65 billion in the same period last year. This sharp rise was mainly driven by a significant increase in exports, while imports dropped by more than 4.3% to USD 211.3 billion. This marked the second consecutive month of import contraction, reflecting weak domestic demand ahead of a major U.S. tariff hike. In the first quarter, import value dropped by more than 7% to USD 580.7 billion, largely due to sharp declines in imports of natural gas, rare earths, and steel — all down more than 20%. Meanwhile, imports of technology-related products rose by over 50%. Imports from several countries — including the U.S., Europe, Japan, and India declined.

On the export side, China’s exports jumped 12.4% year-on-year to USD 313.9 billion, beating market forecasts of 4.4%. This was the fastest growth in overseas sales since last year, indicating a ramp-up in production before the latest U.S. tariffs take effect. In the first quarter of 2025, exports rose by 5.8% year-on-year to USD 853.7 billion, mostly driven by agricultural products and electronics. Exports to the U.S. increased by 4.5%.

China’s 10-year government bond yield rose to 1.65%, reflecting increased pressure from potential U.S. tariffs that could significantly raise the cost of certain goods. However, China recently filed a complaint with the World Trade Organization (WTO), accusing the U.S. of violating trade rules and urging the U.S. to return to tariff negotiations.

Techical analysis data (5H)

Resistance: 7.3067, 7.3106, 7.316

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 7.292 - 7.2974 but cannot break the support at 7.2974, you may set a TP at approximately 7.3106 and SL at around 7.2881 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 7.3067 - 7.3106, you may set a TP at approximately 7.316 and SL at around 7.292 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 7.3067 - 7.3106 but cannot break the resistance at 7.3067, you may set a TP at approximately 7.292 and SL at around 7.316 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 7.292 - 7.2974, you may set a TP at approximately 7.2881 and SL at around 7.3106 or according to your acceptable risk.

Pivot point April 18, 2025 09:35 PM. GMT+7