Week10_China's economic policies direction for 2025

GLOBAL STOCK MARKETS
European stocks rise while U.S. markets remain in a downward spiral
The U.S. stock market kept falling sharply, averaging a 3.1% drop due to new tariff policies. Reports on U.S. economic conditions and the ISM Manufacturing Index raised concerns about rising input costs from tariffs. In contrast, European stock markets rallied impressively, with Germany's stock index reaching a new record high. A bond sell-off wave is also speeding up, led by a 30-basis-point surge in Germany’s 10-year government bond yield. Meanwhile, Japan’s 10-year government bond yield hit 1.5%, its highest since June 2009. Markets faced significant turbulence last week.
- U.S. stock indices fell an average of -3.1%, EU600 -1%, Nikkei 225 -0.9%; CSI 300 +1.4%.
- The commodity index dropped -1.5%, with oil prices down -5% and agricultural prices falling (Milk -9.5%, Cocoa -10.9%, Cotton -5.3%). Precious metals kept rising (Gold +2.1%, Silver +4.6%), along with industrial metals (Aluminum +2.6%, Lead and Zinc up 2-4%).
- The DXY index fell -3.6%, while the U.S. 10-year Treasury yield rose by +0.05%.
The U.S.-China trade war escalated as the U.S. officially doubled additional tariffs on Chinese goods to 20% on March 4. In response, China announced a 15% tariff on U.S. goods starting March 10, along with new export restrictions on designated U.S. organizations. China has taken a firm stance, stating it is ready to confront the U.S. in any trade war. The average tariff on Chinese goods has now reached 33%, up from 13% at the start of Trump’s term. Meanwhile, the 25% tariff on Canadian and Mexican goods has been postponed by one month. Markets are also watching April 2, the scheduled date for retaliatory tariffs on all nations.
Key upcoming economic data include China’s CPI, new loans, M2 money supply, and industrial production index; Japan’s final GDP release and M2 money supply; U.S. CPI, PPI, and consumer confidence index; and Canada’s overnight interest rate and central bank monetary policy minutes.

VIETNAM STOCK MARKET
VN-Index rises for the 7th consecutive week, moving against the U.S. stock market trend
VN-Index rises 1.6%, maintaining a safe gap above the 1,300-point psychological level, confirming a medium- to long-term uptrend. Trading volume increased 11%, improving steadily over 7 weeks with no sudden spikes during volatile sessions.
- After last week's pause, banking stocks and the VIC group drove VN-Index. The top 5 stocks—VIC, VHM, TCB, VCB, MBB—contributed 14.8 points, accounting for 73% of the weekly gain.
- Advancing breadth slightly narrowed from last week, with 11/18 sectors rising. Fast sector rotation was clear as media, retail, and real estate rose 2.5%–3.9%, replacing last week's leaders such as basic resources (-1.4%) and personal & household goods (-1.1%).
- Foreign net selling shrank to USD 28 million from USD 98 million last week.
Industrial production: -2.2% MoM and +7.2% YoY over 2 months; state budget investment in February: +36.5% YoY, +21.7% YoY over 2 months; FDI over 2 months: +35.5% YoY; budget revenue over 2 months: +25.7% YoY with a surplus of VND 206 trillion; total retail sales of goods & services over 2 months: +9.4% YoY; trade turnover over 2 months: +12% YoY (exports +8.4% YoY, imports +15.9% YoY, trade surplus USD 1.47 billion); average CPI over 2 months: +3.27%, core inflation 2.97%; tourist arrivals over 2 months reached 3.96 million, up 30.2% YoY.
Growth drivers remain, but note: (1) The manufacturing sector is still weak, shown by low IIP growth and a contracting PMI. This is less worrisome as rapid import growth supports a manufacturing recovery in coming periods; (2) CPI rose significantly due to high pork prices from supply shortages.
After 7 weeks of gains and diverging from the global negative trend, short-term correction risks are growing. However, we view these pullbacks as opportunities for investors to further increase their investment in a confirmed medium- to long-term uptrend.