iShares China Large-Cap ETF

FXI

Market cap $6.71B

China posted a record trade surplus for 2025, as fresh data showed the world's second-largest economy remained resilient despite facing steep tariffs from the Trump administration.

Morgan Stanley's Laura Wang says China equities are entering a phase of stabilization after a strong 2025, with future gains driven more by earnings growth than valuation expansion. She highlights AI, innovation and high-tech manufacturing as core themes, stresses the importance of stock selection and dividend income, and says global investor interest in China is returning - with room for further allocation in 2026.

China's consumer inflation picked up modestly in December, while factory-gate prices remained in contraction.

China's consumer inflation continued to pick up mildly in December but factory-gate prices remained in contraction, capping off another year dogged by persistent deflationary pressures amid weak domestic demand.

Consumer prices rose 0.8% from a year earlier, its highest level since February 2023. Factory-gate prices dipped 1.9% in December from a year ago, better than the forecast 2% decline.

Alibaba, NetEase, and hotel operator H World Group are seeing bullish technical indicators.

In recent months, several Chinese chipmakers have announced plans to list, including Moore Threads and Biren Technology, while Beijing has increasingly encouraged domestic chip purchases and mobilized billions in public funds towards development. CNBC's Seema Mody reports the latest.

China's official gauges of factory and construction activity unexpectedly moved back into expansion territory in December, helping Beijing anchor its growth target for 2025.

China's economy ended the year on a slightly less gloomy note as manufacturing, services and construction activity all improved in December.

I reiterate a sell rating on assets that track the main Chinese indices, citing an unattractive risk-return profile and persistent macro headwinds. China is prioritizing technological leadership in AI over real economic growth, risking further economic slowdown and instability. FXI trades at 12x earnings, in line with its 5-year average, offering no compelling valuation discount despite heightened risks.