Peng Yanyan, Head of Greater China Consumer Products Research, UBS Investment Bank, remained cautiously optimistic about China's consumer goods sector, saying that policies are starting to take hold and that total retail sales are on an evident uptrend. While the home appliance sector is potentially influenced by tariffs, many companies have shifted their U.S.-focused supply chains outside of China over the past six years.Peng expected that there may be more trade war news or policies in the next 12 months, while there have already been some positive changes in terms of Chinese government policies and corporate responses. Since the end of the third quarter, especially since August, the policies start to yield results.Related NewsCICC Lists Top Stocks w/ Most Southbound Fund Inflows in 1Q25 (Table)For consumption, the most important policy is the “trade-in” policy for home appliances. Based on UBS’ forecast, of the $300 billion in “trade-in” policies announced by China, it is estimated that between $30 billion and $60 billion will be directly tied to home appliances.In terms of potential tariff repercussions, the home appliance sector will be the most affected for consumer goods companies. Many companies in the home appliance sector have been globalized over the past decade or so, with approximately 50% or more of their revenues stemming from overseas. Based on UBS’ recent interactions with home appliance companies, the pace of their internationalization will not be slackened by the increase in U.S. tariffs.The main reason for this is that many companies have already made adjustments in response to past trade frictions, including shifting their U.S.-focused supply chains to markets outside of China, such as Southeast Asia and Latin America. Many companies are now exporting to the U.S. with supply chains that are completely unrelated to China, which is a major strategic shift that has taken place over the past six years.Related NewsM Stanley's Latest List of Overweight-rated Stocks in APAC w/ Top-ranked MOST Score (Table)