Goldman Says U.S. Tensions Won’t Hurt China Stocks Too Much, Yet

The relationship between the U.S. and China would have to get a lot worse to hurt Chinese stocks in a significant way, according to Goldman Sachs Group Inc.

There’s “still-decent risk/reward for Chinese stocks unless U.S.-China relations substantially deteriorate from here, lending support to our Overweight call on China in a regional context,” strategists including Kinger Lau and Timothy Moe wrote in a note dated July 5. “Old Economy and Value may have generally overreacted to the rising tensions, while ‘New China’ and Growth may have under-priced the US-China risk” in recent months, they added.