Huang’s remarks come as the spotlight on AI chips intensifies, with reports suggesting the US may expand its export blacklist to include additional Chinese semiconductor firms. China warned that entities complying with such measures may face legal consequences, calling the actions discriminatory.
Morgan Stanley Raises China’s Growth Forecasts
While tech-sector frictions persist, broader trade tensions have eased, supporting a more optimistic economic outlook. On May 21, CN Wire reported that Morgan Stanley (MS) revised its 2025 and 2026 GDP growth projections for China to 4.5% and 4.2%, respectively, up from 4.2% and 4.0%. The US banking giant revised its forecasts in response to lower tariffs and easing US-China trade tensions.
Still, the bank highlighted key risks, including housing market stress and soft household spending, despite Beijing’s stimulus efforts.
China’s Real Estate Slump Deepens
Housing conditions remain troublesome, undermining consumer confidence. The Kobeissi Letter reported:
“New home prices in China’s 70 major cities dropped 4.6% year-on-year in April. Existing home prices fell 6.8%, after a 7.3% drop in March. Chinese home prices have now declined for nearly four years STRAIGHT. Meanwhile, property investment declined 10.3% year-over-year in the first 4 months of 2025. All while new construction starts by property developers fell 23.8% during the same period. China’s real estate sector is in a worse recession than 2008.”
The slump has significantly impacted consumer sentiment, reinforcing a higher savings rate. A sustained recovery in the housing and labor markets remains crucial for China’s transition to a consumption-driven economy.
