State Street SPDR S&P China ETF

GXC

Market cap $516M

Mainland investors were rare net sellers of Hong Kong-listed stocks overnight, a rare occurrence these days, totaling about $160 million. China YTD retail sales growth was stronger than expected.

ETFs like MCHI draw attention as China's retail sales and industrial output beat expectations, signaling renewed economic momentum.

U.S. Venezuela–Iran actions reflect a planned, NSS-aligned strategy; China faces structurally higher energy costs through Trump's second term. Removing discounted Iranian/Venezuelan barrels adds ~$6.8–$8B annually; higher Brent and logistics costs amplify China's import bill.

China's exposure to Strait of Hormuz oil disruptions is limited, with only ~6% of its energy consumption reliant on these imports. China's energy mix is dominated by coal (52%) and renewables, significantly hedging against Middle East oil supply shocks.

GXC (SPDR S&P China ETF) remains a buy, supported by improving profit expectations and solid year-to-date outperformance versus the S&P 500. The ETF trades at a modest sub-14x P/E, with large-cap, consumer discretionary, and communication services exposures dominating the portfolio. Liquidity is mixed—low average daily volume and wide bid/ask spreads necessitate limit orders, especially near market open.

Easing tensions between China and the U.S. may be supportive of markets. Still uncertainty amid plans for Trump to visit China in 2026.

Despite mounting macro headwinds at the start of the year, Chinese equities have continued to deliver positive performance. While near-term flows can provide further upside, the durability for the equity rally will hinge on policy choices ahead.

A phone call between U.S. President Donald Trump and Chinese leader Xi Jinping on Friday may have lowered the temperature between the superpowers, but it yielded little in the way of firm agreements and appeared to leave the fate of a TikTok deal unresolved, according to policy experts.

China will continue to rise, but global dominance is unlikely due to significant trade headwinds and growing skepticism from both Western and Asian leaders. SPDR S&P China ETF is rated a Hold, as broad-based exposure faces risks from China's domestic challenges and international trade tensions. SPDR S&P 500 ETF Trust is also a hold, given historically high U.S. valuations and concerns about softening lower-income consumption despite likely Fed rate cuts.

Among APAC equity markets, Australia has a higher beta to oil prices while India, Indonesia and Thailand have lower betas. Domestic political uncertainties have been one main reason for the decoupling trend seen in Indonesia and Thailand.