Price Pressures Persist: China’s producer prices fell 3.6% year-over-year in June, the steepest drop since July 2023. Sluggish domestic demand, persistent overcapacity, and intensifying price competition continue to exert downward pressure.
China’s Export Growth Surprises on the Upside: Chinese exports just hit a record high, rising 5.8% year-over-year to $1.8 trillion, despite global trade tensions and increased tariffs from the US.
Rare Earths in the Crosshairs of the Trade War: Rare-earth exports from China to the US dropped by 74% year-over-year in May. While exports rebounded some in June, they remain well below previous levels. Given that China controls approximately 69% of global rare-earth mining and around 90% of processing, rare earths remain a critical front in the trade war.
Housing Slump Continues: China’s new-home prices fell 0.3% month-over-month in June, though the year-over-year figure remains well above recent lows. Meanwhile, real estate investment declined 11.2% in the first half of 2025 to the lowest level since the 2020 pandemic.
Credit Impulse on the Rise: Stimulus efforts continue but remain measured as authorities aim to avoid the boom-and-bust pitfalls of the 2010s.
China’s Stock Market Rally: Despite trade tensions, China’s resilient economy and ongoing stimulus have driven a breakout in stocks.
China Further Diversifies Away from Treasuries: Since 2016, the share of US Treasuries in China’s foreign exchange reserves has fallen by roughly 15 percentage points. Meanwhile, gold’s share has climbed by about 5 points, reaching a record 6.8%. These trends accelerated in 2022.
Share this article: 
✉
Subscribe to Around the Curve and receive our latest global macroeconomic, fixed income, and equity views directly to your inbox.
Groupthink is bad, especially at investment management firms. Brandywine Global therefore takes special care to ensure our corporate culture and investment processes support the articulation of diverse viewpoints. This blog is no different. The opinions expressed by our bloggers may sometimes challenge active positioning within one or more of our strategies. Each blogger represents one market view amongst many expressed at Brandywine Global. Although individual opinions will differ, our investment process and macro outlook will remain driven by a team approach.
