As of December 21, 2024, the Hang Seng Index is under scrutiny as it stands at 19,721, significantly below its all-time high of 33,484. The index's performance is influenced by various factors, including the recent growth of China's GDP, which increased by 4.6% in Q3 2024. However, challenges such as a collapsing real estate market and weak consumer sentiment persist, prompting Beijing to target a GDP growth rate of 5% for 2024 [8248e1b9].
The outlook for the Hang Seng Index in 2025 is particularly sensitive to US-China trade relations, with President-elect Donald Trump threatening to impose 10% tariffs on Chinese goods. Analysts predict that these tariffs could potentially slow China's GDP growth to 4.1% in 2025 [8248e1b9]. The recent appointment of David Perdue as Ambassador to China adds another layer of complexity to the diplomatic landscape, which could impact trade policies and economic cooperation [8248e1b9].
In light of these developments, consumer confidence in China remains near record lows, with youth unemployment reaching 16.1% in November [8248e1b9]. To counteract these economic challenges, the Chinese government is expected to implement fiscal stimulus measures, including increasing the budget deficit to 4% of GDP in 2025 [8248e1b9].
Market analysts suggest that the Hang Seng Index could fluctuate within a range of 14,597 to 25,051, depending on the evolving economic conditions and the effectiveness of the proposed fiscal policies [8248e1b9]. As investors continue to monitor the situation, the interplay between domestic economic strategies and international trade dynamics will be crucial in shaping the future trajectory of the Hang Seng Index and the broader Hong Kong market [4b8a1cba].