I posted yesterday on Goldman Sachs lifting their targets:
Adding a little more now:
GS estimate widespread AI adoption could boost Chinese
earnings per share by 2.5% per year over the next decade
Improving growth prospects and perhaps a confidence boost could also
raise the fair value of China stocks by 15-20%, and potentially
usher in over US$200 billion of portfolio inflows
GS do express a note of caution:
“As promising as AI could be to China’s growth trajectory, we
believe forceful policy stimulus is still required to address
deep-rooted macro challenges and drive sustainable equity gains.”
That is, the analysts see a need for more fiscal stimulus given incoming tariff headwinds. GS says fiscal stimulus would help shift from external to domestic demand, is need as a deflationary spiral circuit breaker, and help address other imbalance in China’s economy.
GS also note China AI risks from:
- usage and data privacy
- regulation
- national security
- disinflationary pressure
- potential tech export controls by
western governments
