A fund manager at Franklin Templeton said in an online conference that the pace of tariff hikes between China and the US was faster than, but still largely in line with forecasts, as China was anticipated to face the highest tariffs in the first place.

Regarding the outlook for the Chinese stock market, the trade war will clearly pose a strong headwind to China’s economy that has remained in recovery mode over the past few years. Still, the greater concern is that the improvements recently seen in the real estate and consumer sectors may come under pressure, making it harder for China to weather through deflation. It is worth noting that China has been preparing for tariffs since the first trade war, and so its direct reliance on US trade has been greatly reduced.

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In addition, the Franklin Templeton fund manager was optimistic about China's consumption boost. China has made heavy investments in its own capabilities, as reflected in its strong leadership in DeepSeek as well as advanced manufacturing such as electric vehicles, renewable energy, and robotics.

The Chinese government still has more room in its monetary and fiscal policy to offset the trade slowdown in the short term.