With the implementation of “reciprocal tariffs,” which sectors can break through the adversity? Given the current landscape, four major industries in China are worth paying attention to:
- TMT (Technology, Media, and Telecom): Due to independent industrial cycles, strong self-sufficiency, and low sensitivity to tariffs, this sector is expected to remain buoyant.
- Manufacturing Subsectors with Limited U.S. Exposure：Certain areas of manufacturing that have relatively low reliance on the U.S. market are showing greater stability amid tariff pressures. Their limited exposure helps cushion them from external shocks, allowing operations to proceed with fewer disruptions compared to sectors more closely tied to U.S. trade.
- Domestic Consumer Goods：In the domestic consumer market, essential and everyday products continue to see stable demand. With little dependency on international trade, especially U.S. exports, these goods are largely insulated from the effects of foreign tariffs.
- Cyclical Commodities: Some cyclical industries are seeing a rebound, driven by rising product prices.
Despite tariff shocks, the TMT sector continues to thrive thanks to ongoing technological innovation and robust domestic market support.
For instance, global semiconductor sales growth rebounded in January, with upstream semiconductor materials revenue turning positive, and a recovery in midstream design, manufacturing, and packaging/testing segments. According to Huatai Securities, Taiwan semiconductor materials revenue also turned positive year-on-year in February, with year-on-year growth rates in design, manufacturing, and testing all picking up.
This trend is largely supported by increased AI capital expenditures and policies encouraging the replacement of older electronics. In telecom equipment, leading server chip firm Aspeed and casing leader BizLink saw year-on-year revenue growth, reflecting the strong demand fueled by 5G proliferation and data center expansion.
Manufacturing has experienced steady expansion thanks to technological innovations and robust market demand. Within aerospace, price declines for military-grade titanium sponge have tightened while carbon fiber imports became positive year-on-year and production plans for C919 aircrafts were significantly upgraded, reflecting customer interest.
Automation maintained solid year-over-year growth, driven by manufacturers’ growing focus on improving efficiency and reducing labor costs. Overseas suppliers of robot components also reported a notable rise in orders, reflecting the broader push toward smarter production lines.
Meanwhile, makers of specialized equipment are experiencing steady growth, supported by rising demand for energy-related machinery and the continued expansion of agricultural equipment sales both at home and abroad.Construction machinery sales are increasing due to infrastructure development within domestic borders as well as demand from abroad.
Consumer and cyclical sectors demonstrate impressive stability and growth potential due to steady domestic demand and rising commodity prices. Domestic consumer goods – including mass market items like personal care and dairy–enjoy a stable demand environment with data showing cosmetic retail sales rebounding year-on-year while dairy prices continue to recover, signifying overall stability as well as consumption upgrades.
Cyclical commodities prices continue to advance. Cobalt prices turned positive year-on-year in March while gold rose further than expected and rare earth price index rebounded, which can be attributed to rising global economic recovery hopes as well as supply tensions caused by geopolitical concerns.
Under Tariff Pressure, industries are experiencing varied results. Healthcare services have seen an upturn thanks to streamlined drug approval processes and global investments in health.
On the other hand, Petrochemicals, Steel, and Logistics remain under severe strain from rising tariffs. Rising crude shipping indexes have driven costs higher while tariff-related uncertainty has put oil prices under pressure; steel saw its prices decline slightly but gross margins still remained under strain as market sentiment was pessimistic; logistics saw business climate indexes decline along with per order revenues being affected due to both weak demand and rising costs.
TMT, manufacturing, consumer and cyclical sectors have demonstrated remarkable resilience and upward momentum due to an array of factors: technological innovation, market demand, supportive policies and shifts in global economic landscape. These industries have increased competitiveness while adapting to internal and external challenges while realizing sustainable growth despite an uncertain economic environment.
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