Compared with US, China's stock market gets Goldman Sachs pass

Following strong gains so far this year, China's stock market may continue to outperform US equities when taking a one-year view. That's according to Timothy Moe, chief Asia-Pacific regional equity strategist and co-head of macro research at Goldman Sachs.

"We're hopeful that will continue," Moe said in Beijing on Friday.

"Simple arithmetic would say that China earnings growth could have the potential to return mid-teens, possibly more, while the United States is probably going to be high single digit. Both are good, but I think China might be able to do a bit better."

Moe said the US stock market is currently trading at about 23 times earnings, with expected earnings growth of around 7 percent next year. In contrast, China's earnings growth is forecast to accelerate to the low- to mid-teens, while valuations remain at mid-cycle levels, offering room for further expansion.

Within Asia, Goldman Sachs is overweight on China's onshore and offshore markets, as well as South Korea and Japan. Moe named South Korea as the best-performing market in Asia so far in 2025, up 54 percent year-to-date, followed by offshore Chinese H shares at 35 percent and Japan at 20 percent in US dollar terms.

By comparison, the US market has gained 13 percent year-to-date.