【招银国际】China Economy:Tariff shock amplifies deflationary drag-250512（7页）.pdf

1、 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG:RESP CMBR OR http:/.hk 1 MN 12 May 2025 CMB International Global Markets|Macro Research|Economic Perspectives China Economy Tariff shock amplifies deflationary drag April CPI remained in negativ

2、e territory,as the trade war exerted downward pressure on energy prices and the price levels of export-oriented industries.Tourism price rebounded supported by the Qingming holiday,while prices for other services and durable goods remained subdued.PPI further deteriorated due to sliding global commo

3、dity prices and soft domestic construction activities.The tariff shock is expected to weaken external demand and dampen domestic demand through confidence channels,exacerbating overcapacity.The current stimulus package may prove insufficient amid intensifying deflationary pressures,as policy efforts

4、 in 2Q25 focus on monetary and financial market measures.Based on the assessment of economic damage and the preliminary outcome of U.S.-China negotiations,policymakers are expected to announce the scale of fiscal and consumption support for the second half of the year at the early July Politburo mee

5、ting.In 2H25,we expect a further 10 bps LPR cut,along with a possible moderate increase in the broad fiscal deficit.Policy may also strengthen transfer payments to low-and middle-income households,the social security system,and multi-child families to more effectively boost household consumption.CPI

6、 and PPI may rise from 0.2%and-2.2%in 2024 to 0.3%and-1%in 2025.CPI stays negative on falling energy prices.Chinas CPI YoY stayed flat at-0.1%in Apr,slightly above market expectation at-0.15%.In sequential terms,CPI bounced up to 0.1%in Apr from-0.4%in Mar.Food price rose to 0.2%MoM in Jan after dro