Immediate impact is clearer and positive for China as they were laboring under higher tariffs; the new rate is lower initially. We'll likely see front-loading of trade as firms try to move goods before new rules take effect. China has been dealing with tariffs for years, so the adjustment needed is less.

There will still be uncertainty as the new mechanisms have a 150-day initial period and could face further challenge.

The focus will be on stability and 'quiet innovation' rather than headline growth. This includes China's open-source approach to AI, getting the best out of models at lower cost. The anti-involution push from last year will continue.

Key events like the Party meeting in March and a potential Trump visit to China could set the scene for a more stable year.

EM corporate fixed income is a story of 'picks and shovels' – benefiting from rallies in precious/base metals and participating in the enabling (upstream) layer of AI, not the application layer.

The stability of CNY is key. Its value as an alternate for trade partners looking to diversify away from the dollar in the face of uncertainty supports its role. This stability aids its investment appeal.