ING Upgrades China’s Growth Forecast to 4.7% Amid Trade War De-Escalation

ING Raises China Growth Forecast to 4.7% Amid U.S.-China Trade Truce

ING has upgraded its annual growth forecast for China to 4.7%, reflecting the positive impact of the recent de-escalation in the U.S.-China trade war. The 90-day tariff truce, announced as part of the ongoing negotiations between Washington and Beijing, is seen as a significant step toward stabilizing trade relations and boosting China’s economic outlook.

According to ING’s Greater China chief economist, Lynn Song, the tariff reduction was a bigger-than-expected de-escalation, marking a favorable shift in the trade environment. While the tariff reprieve is temporary, it is expected to stimulate China’s export sector, particularly with the U.S. In the coming months, Chinese firms with low inventories are expected to increase exports to the U.S., making the most of the tariff reduction before the ceasefire ends.

ING predicts that this boost in exports will be particularly noticeable in May and June, with a likely front-loading of exports in July and August, depending on the outcome of future negotiations. Song also noted that there is potential for further upward revisions to China’s growth forecast if a long-term bilateral agreement is reached within the 90-day window.

This revised forecast is a positive sign for China’s economy, and ING’s economists are closely monitoring developments in the trade talks, as the outcome could influence future economic projections. The trade truce, along with the expected boost in exports, presents an opportunity for China to regain momentum in the global economy, though challenges remain as negotiations continue.