China GDP and its Significant Regional Impact
The pace of China's economic growth significantly affects Singapore due to deep trade integration and China's key role in global value chains. According to a recent IMF study, a 1 percentage point decline in Chinese domestic growth is expected to reduce trend growth in ASEAN countries, including Singapore, by about 1 percentage point over the medium term. This underscores the importance of China's GDP targets and economic performance for Singapore and the broader ASEAN region.
Similarly, many Singapore-listed stocks generate revenue from or have significant assets based in China. The table below comprises the five stocks of the FTSE ST China Index that currently maintain the highest market capitalisation.
Stock | Code | Mkt Cap S$M | 2025 YTD ADT S$M | 2025 YTD TR % | 2024 ADT S$M | 2024 TR % | Sector |
Wilmar Intl | F34 | 19,228 | 9.49 | -1 | 16.11 | -9 | Consumer Non-Cyclicals |
JMH USD | J36 | 16,109 | 7.52 | -1 | 14.56 | 9 | Industrials |
YZJ Shipbldg SGD | BS6 | 11,417 | 66.76 | -3 | 53.93 | 108 | Industrials |
HPH Trust USD | NS8U | 1,885 | 0.90 | -3 | 1.18 | 30 | Industrials |
YZJ Fin Hldg | YF8 | 1,444 | 1.61 | 0 | 2.44 | 36 | Financial Services |
Source: SGX, FTSE Russell, Bloomberg, Refinitiv (Data as of 21 January 2025)
Yangzijiang Shipbuilding (Holdings) was the strongest performer in the STI in 2024, and the fifth most traded Singapore-listed stock by turnover for the year. Established over six decades ago, the group has grown into one of China's largest non-state-owned shipbuilding companies. Since early 2017, the Jiangsu Province-based shipbuilder has tripled its weight in the STI and seen its share price increase sixfold from under S$0.45 to near S$3.00. Additionally, its work-in-progress order book value has grown sixfold, from 85 vessels valued at US$4.3 billion in early 2017 to 245 vessels worth US$24.8 billion by the end of 2024, with a significant portion consisting of greener vessels. The Group has also made significant strides in diversifying into the LNG terminal business, commencing construction of LNG storage tank facilities in 2023. Yangzijiang Shipbuilding Holdings also led the STI in 2021 and 2022.
China's 5.0% GDP growth rate for 2024 met the official target and was largely seen to be driven by the industrial sector and policy stabilisation measures. Policymakers made significant strides in deepening monetary policy tools and liberalising capital markets throughout the year, from the appointment of Wu Qing as head of the CSRC in February to the September State Council Information Office's joint press conference that highlighted initiatives to provide financial support for high-quality economic development. Strategic manufacturing initiatives, driven by renewed government support and multi-year trade-in programs, aligned with the new quality productive forces doctrine introduced in September 2023. Fiscal measures were also ramped up in November.
Looking ahead, the 2025 GDP target is expected to be announced at the Two Sessions in early March. The IMF recently revised its 2025 GDP forecast for China up by 0.1 percentage point to 4.6%, citing momentum from 2024 and November's fiscal measures mitigating trade policy uncertainty and property market challenges. For 2026, the IMF expects GDP to stabilise at 4.5% as trade policy uncertainty eases and the retirement age increase slows the labour supply decline.
Policy Outlooks: Monetary Easing, Fiscal Proactivity, and Sectoral Shifts
On the policy front, economists expect that the PBOC will pursue a ‘moderately loose’ monetary policy for 2025, with potential cuts to the 7-day reverse repo rate (currently 1.5%) and Reserve Requirement Ratio (currently 6.6%). Following the aforementioned November measures, fiscal policy is also set to become “more proactive,” with Reuters suggesting this could increase the fiscal deficit ratio to around 4.0% of GDP, and see more issuance of more ultra-long special purpose treasury bonds. For the strategic and structural policies, the consumer and services sectors are expected to take the spotlight. The World Bank projected in December that to boost domestic demand, China’s policymakers will strengthen social safety nets and redirect fiscal resources to social spending, reducing household savings and increasing consumption.
IMF research in August 2024 also maintained that China’s services sector is an underexploited driver of growth and expanding this sector can boost productivity, create jobs, and help China achieve its climate goals more efficiently. The IMF China 2024 Article IV found that the sector’s share of value-added to the economy has increased to just over 50%, but is still below the average of about 75% for advanced economies. The Article IV Report also highlighted the potential for the services sector to drive growth and create jobs, especially for young workers in IT and education. The overall consensus among economists is that services growth can enhance a multitude of sectors by providing logistics, financial services, and professional expertise, boosting efficiency, while also addressing urbanisation challenges and rural revitalisation, and creating new industries, all the while driving economic growth.
Moving into 2025, state media reports also indicate a growing presence of foreign financial institutions in China, driven by policymakers' efforts to promote market openness and support foreign investments. Xinhua noted that “foreign financial institutions, especially securities firms, had also increased their presence in the country as China steadily promotes the all-round institutional opening of the market”. Shanghai Securities News also reported in November that DBS Group Holdings received approval to raise its stake in DBS Securities China in November from 51% to 91%.
New Horizons in China Consumer Sectors
An evident example of the formation of a new consumer industry is in Healthcare with the integration of TCM with Western Medicine. Tianjin Pharmaceutical Da Ren Tang Group Corporation maintained in 4Q24 that Healthcare policymakers have signified a clear direction for TCM development, emphasising the integration of traditional Chinese and Western medicine, and improving the TCM service system. The Group added that this also involves promoting ethnic minority medicine, exploring classical medical literature, building a TCM scientific platform, and reforming approval mechanisms to accelerate new drug development and industry growth. Traded in USD, Tianjin Pharmaceutical Da Ren Tang Group Corporation generated a 16% total return in 2024 and ranked among the 30 Singapore-listed stocks that booked the most net institutional inflow for the year, after its more significant 93% total return in 2023.
For China consumer and services-related stocks, a key focus in 2025 will be on maximising potential growth through strategic asset utilisation. Wilmar International has noted that its Food Park project in China is progressing well, adding that the demand for central kitchen products is promising. The positive consumer outlook is echoed by Sasseur REIT, which has highlighted that the long-term outlook for China’s outlet industry remains bright, given the shifting consumer dynamics with greater sensitivity to price and value. Sasseur REIT pioneered the “Super Outlet” model which redefined the traditional outlet concept in 2016 and this has become one of its distinctive differentiating business strategies. Last year the REIT manager also cited a McKinsey projection that by 2025, outlet sales in China could reach as much as RMB 390 billion, approximately 86% higher than the level seen in 2022.
Record-Breaking Year for FTSE China A50 Index Futures Participation
In 2024, the FTSE China A50 Index generated a 21.8% total return in CNH terms, and 18.2% total return in USD terms. The CNH lost ground to the USD in the last six weeks of 2024, anticipating the imposition of tariffs by the Trump administration. US Treasury Secretary Scott Bessent, who is highly experienced in currency markets, has maintained that the rule of thumb would be an approximate 6-7% appreciation of USD to CNH if 10% general tariffs were imposed by the US on China. SGX USD/CNH futures saw daily participation records in 2024, averaging US$14.3 billion daily, an increase of 37% from the previous year. New records in USD/CNH futures were also set in November, with a daily volume of US$18.2 billion and a record open interest reaching US$23.7 billion in August.
The SGX FTSE China A50 Index Futures saw over 100 million lots traded in 2024, resulting in a daily average volume of 427,000 lots (US$5.3 billion). Additionally, there has been significant growth in T+1 volumes, reflecting a robust global appetite to manage China exposure around the clock. Among the 30 China-focused indices maintained by FTSE Russell, the FTSE China A50 Index ranked among the top three performers in 2024 with the second-lowest volatility. The FTSE China A50 Index also ranked as the second most defensive index among the cohort over the three years ending in 2024. By the end of 2024, the FTSE China A50 Index was trading at its 5-year average P/E ratio, with the P/B ratio approximately one standard deviation below the 5-year average.
Over the course of 2024, gains across the FTSE China A50 Index were comparatively broad, with 44 gainers to 6 decliners. The largest weight of the Index, Kweichow Moutai, declined 8% in total return in 2024 to 1,524 CNY, as analysts reduced their target prices on the stock, with the 12-month consensus estimate target price trimmed from 2,225 CNY to 1,890 CNY throughout the year on the back of an outlook for lower sales. The FTSE China A50 Index also maintained the second-highest dividend yield among the FTSE Russell suite of China-focused indices, at 3.2%, second to the FTSE China A High Yield 150 at 4.8% as of the end of 2024.
China ETFs on SGX: AUM Growth and 2024 Performance Leaderboard
Among the 10 China equity-focused ETFs listed on SGX, the Lion-OCBC Securities China Leaders ETF, Lion-OCBC Securities Hang Seng Tech ETF, and Xtrackers MSCI China UCITS ETF delivered the highest returns in 2024. The Lion-OCBC Securities China Leaders ETF tracks the Hang Seng Stock Connect China 80 Index. This index is designed to measure the overall performance of 80 largest Chinese companies in terms of market capitalisation listed in Hong Kong and/or mainland China that are eligible for Northbound or Southbound trading under the Stock Connect schemes.
In 2024, the combined AUM under the China-Singapore ETF link was around S$600 million, up from S$160 million a year earlier. This includes five north-bound ETFs investing in China's A-Shares market and two south-bound ETFs investing in SGX-listed ETFs. The China-focused ETFs listed for trading in Singapore are tabled below.
ETF Name | SGD Ticker | USD Ticker | CNH Ticker | AUM (S$M) as of end Dec 2024 | 2024 Total Return % (SGD) | Launch Year |
CGS Fullgoal CSI 1000 ETF USD* | GRO | GRU | 14.3 | 1.8 | 2023 | |
CSOP CSI STAR and CHINEXT 50 Index ETF* | SCY | 6.5 | 13.1 | 2022 | ||
CSOP Huatai-PineBridge SSE Dividend Index ETF* | SHD | 7.8 | 17.1 | 2023 | ||
Lion-OCBC Securities China Leaders ETF SGD | YYY | YYR | 91.7 | 31.0 | 2021 | |
Lion-OCBC Securities Hang Seng Tech ETF HKD | HST | HSS | 379.8 | 23.3 | 2020 | |
NikkoAM-StraitsTrading MSCI China EV & FM ETF | EVS | 26.2 | 0.2 | 2022 | ||
Phillip-China Universal A50 Connect ETF* | MCN | MCS | 43.2 | N/A | 2024 | |
United SSE 50 China ETF | JK8 | 21.6 | 19.8 | 2009 | ||
UOBAM Ping An ChiNext ETF SGD* | CXS | CXU | 2.8 | 6.8 | 2022 | |
Xtrackers MSCI China UCITS ETF 1C | TID | LG9 | 53.2 | 23.2 | 2010 | |
ICBC CSOP FTSE Chinese Government Bond Index ETF USD | CYC | CYB | 132.8 | 8.1 | 2020 | |
ICBC CSOP FTSE Chinese Government Bond Index ETF USD Acc | CYX | 380.6 | 8.7 | 2022 | ||
NikkoAM-ICBCSG China Bond ETF RMB | ZHD | ZHY | 279.7 | 7.1 | 2020 | |
NikkoAM-ICBCSG China Bond ETF SGD | ZHS | 26.4 | 6.8 | 2020 |
*Northbound Feeder ETFs under China-Singapore ETF Product Link.
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