US Listed Chinese Stocks Rally on Strong Trade Data, Central Bank Support, Goldman Forecasts 20% Growth

US-listed Chinese stocks, including Alibaba Group Holding BABA, Baidu, Inc. BIDU, JD.com, Inc. JD, PDD Holdings Inc. PDD, NIO Inc. NIO, Li Auto Inc. LI, and XPeng Inc. XPEV, gained momentum Tuesday in sympathy with China’s foreign trade results, which set a new record in 2024 and retained the title of leading trader in goods in 2024.

China’s imports and exports grew by 5% in 2024 to 43.85 trillion yuan ($5.98 trillion), Global Times cites the General Administration of Customs (GAC).

China’s trade growth reached 2.1 trillion yuan in 2024, matching the annual trade volume of a medium-sized economy, Global Times cites Wang Lingjun, deputy head of the GAC.

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In 2024, China’s total exports grew 7.1% to 25.45 trillion yuan, while imports grew by 2.3% to 18.39 trillion yuan.

China’s trade volume with the Belt and Road Initiative (BRI) partner countries grew by 6.4%, accounting for over 50% of the nation’s total trade for the first time.

Trade under the BRICS cooperation framework grew by 5.5%, China and the EU’s bilateral trade grew by 1.6%, and China and US trade grew by 4.9%.

The Chinese stock rally also reflects reports that the U.S. President-elect Donald Trump administration is exploring a gradual approach to raising tariffs, Bloomberg reports.

Bloomberg cites a briefing Tuesday afternoon from the China central bank and State Administration of Foreign Exchange officials, who pledged to keep the yuan stable and ensure liquidity.

Zhaopeng Xing of Australia & New Zealand Banking told Bloomberg the upgraded use of its two capital market tools to offer a floor for the equity market, enabling an economic recovery.

Goldman Sachs strategists reiterated their bullish stance on Chinese stocks to Bloomberg, predicting the benchmarks to rise ~20% by year-end. The firm expects sentiment and liquidity to improve in the late first quarter of 2025 due to better tariff and policy clarity.

Goldman Sachs expressed optimism over government consumption proxies, emerging market exporters that will gain from a weaker yuan, and specific tech and infrastructure companies.

Goldman Sachs maintained an overweight call on online retail, media, and healthcare stocks while upgrading consumer services shares to overweight.

Last week, HSBC voiced a similar opinion on Chinese stocks to Bloomberg. Alibaba is considered the tech barometer of China.

Last November, Goldman Sachs predicted that Chinese shares could gain about 20% over the next 12 months, backed by stimulus measures to support the economy. The MSCI China Index has lost about 10% since then due to economic weakness, with additional U.S. tariffs posing a double whammy.

Investors can gain exposure to Chinese equities through iShares China Large-Cap ETF FXI and KraneShares Trust KraneShares CSI China Internet ETF KWEB.

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