Research China: Green shoots meet trade war - Danske Bank

The Chinese economy saw green shoots in Q1, but the trade war created a new headwind in April, Danske Bank's FX analysts report.

China's Q1 recovery faces new trade war headwinds

"Still, we leave our growth outlook unchanged as our medium-term scenario for the trade war remains the same with an end game of 40% tariffs on Chinese goods following a long bumpy road of trade talks. Stimulus was pushed forward as expected to counteract tariff effect. We continue to see growth at 4.7% in 2025 and 4.8% in 2026."

"Over the coming months we expect a pick-up in activity due to front loading of exports during the 90-day trade truce but see activity moderating again after that. Housing and private consumption have improved but lots of work remain to get the two sectors on stronger footing. A growing number of tech milestones have boosted confidence."

"The US-China rivalry is set to continue. US tech sanctions keep widening while China retaliates with limits on rare earth exports. Trump's America First policy has led to a thaw in EU-China relations. Tensions remain, though, when it comes to China's rise as a competitor, industrial policy, overcapacity, and China's position on the Ukraine war."