China’s robust economic performance in the third quarter has sent shockwaves through the financial markets, particularly boosting the value of U.S.-listed ETFs focused on Chinese companies. The news of China’s stronger-than-expected GDP growth, coming in at 4.6% year-over-year, has ignited a surge in these ETFs during pre-market trading.
Several key ETFs have experienced significant gains, reflecting investor optimism about China’s economic prospects. Notably, the KraneShares CSI China Internet ETF (KWEB) saw a remarkable 6.06% rise, while the iShares China Large-Cap ETF (FXI) jumped by 4.93%. The iShares MSCI China ETF (MCHI) also climbed 5.15%, showcasing a collective upward trend fueled by the positive economic data.
The impressive GDP figures, surpassing the 4.7% prediction from a Reuters poll, signal a strong rebound for the Chinese economy. However, while the growth was positive, it was slightly lower than the 4.7% recorded in the previous quarter, signifying a slowing pace since the middle of last year. This slight slowdown still places the country further from its ambitious 5% annual growth target set by Beijing.
Beyond the overall GDP performance, other economic indicators also painted a positive picture for China’s economic health. Retail sales in September saw a year-over-year increase of 3.2%, exceeding forecasts, while industrial output surged by 5.4%, also beating expectations. These figures indicate robust consumer spending and solid manufacturing activity.
However, despite these positive signs, the real estate sector continues to face challenges. House prices in September experienced a 5.8% year-over-year decline, representing a larger drop compared to the 5.3% fall in August. This underscores the ongoing difficulties faced by the Chinese real estate market.
The positive economic news resonated strongly in China’s domestic market, with the CSI 300 index surging 3.62% to close at 3,925.23. The index even reached an intraday high of 5.5%, highlighting the bullish sentiment among Chinese investors.
The strong performance of China’s economy, despite the ongoing challenges, has fueled optimism among investors, driving the value of U.S.-listed China-based ETFs upwards. The recent surge in these ETFs reflects the growing confidence in China’s ability to sustain its economic momentum and navigate the global economic landscape.