Chart of the day - CHN.cash (17.03.2025)

Asian stock markets rise today following better-than-expected retail sales in China. On the other hand, the overall data from China today has a mixed tone, with the Hang Seng Enterprise Index (CHN.cash) tentatively testing a key resistance level around 8920.

Source: xStation5

Bittersweet Data

The higher-than-expected retail sales growth in February is visibly boosting investor sentiment in the Asia-Pacific region. As China enters 2025, it faces a critical challenge in supporting domestic demand, which had previously been offset by dynamically growing exports. However, the optimism surrounding the latest data lacks solid foundations. Consumer sentiment in China remains weak, unemployment unexpectedly rose from 5.1% to 5.4%, and the real estate market, a symbol of China’s internal problems, saw another decline (-0.14%, previously: -0.07%).

Will the Consumer Wake Up?

While the HSCEI (Hang Seng China Enterprises Index) is ignoring internal uncertainties and has been on an upward trend since the beginning of 2025 despite U.S. tariff pressure, the domestic Chinese market is playing an increasingly significant role in the narrative of the Communist Party of China. In the latest framework plan, Chinese government representatives announced a series of changes aimed at helping consumption catch up with Chinese production after years of supporting the supply side. The key focus of the program is accelerating wage growth and calibrating the minimum wage to protect against wage stagnation, which is currently discouraging household spending in China.