This is a big week for our stock market as we wait with bated breath for a rate cut today and the statements the Reserve Bank Governor, Michele Bullock, makes about the likelihood of more cuts in the year ahead.

Without the fear of a recession, rate cuts would be great for local stocks, so what the RBA board comes up with at 2.30 pm this afternoon is really important to our hip pockets and the strength of the economy going forward.

This comes at the same time as another key issue for stocks was released on Monday, which was also impactful on stock prices and your super, and that was the latest economic health report for China.

Love or hate the boys from Beijing, their economy is crucial to Australia’s GDP.

Interestingly, in recent times these hard heads of the Middle Kingdom have looked more likeable, with Donald Trump taking the global villain tag off Beijing, because of his tariff punishments for all and sundry globally, including us.

In this context, I was rooting for the Chinese to deliver some good economic readings today, not only to help our economy grow, but also to give power to our stock market.

If China grows, iron ore prices will spike and that will be good for the share prices of our big miners. This will pump up the S&P/ASX 200 and the overall value of super funds, that most of us are invested in.

Regrettably, the market reaction yesterday to the Chinese economic data locally meant BHP dropped 2.4% to $38.75, while Rio Tinto lost 1.31% to $119.46.

Last week, in anticipation of good Chinese numbers, both of our big miners were up over 5% up for the week, so yesterday’s falls are disappointing.

However, with BHP, the question is this: are we seeing a classic Warren Buffett scenario where he’d say it’s time “to be greedy while others are fearful”?

The AFR saw the data drops on Monday and reported: “A dramatic fall in China’s industrial output and retail sales also weighed…” on a market that gave up 0.58% today. The concern was about the Chinese consumption figures, which were interpreted as bad for iron ore and other commodity prices and for the related companies’ stock prices.

However, the Chinese news outlet GlobalTimes saw the statistics in a different light, using this more positive headline: “Chinese economy displays strong resilience in April, marked by 6.1% rise in industrial output, many new growth drivers.”

These numbers look pretty good considering that this was the month that the Trump tariffs were biting, and we saw a lot of big buying from US retailers earlier in the year to get in ahead of the tariffs. A slowdown in sales shouldn’t have surprised.

The market seemed spooked because retail sales rose 5.1% from a year earlier in April, but this missed estimates by analysts of 5.5% growth. Sales had grown by 5.9% in the previous month, but one month’s figures can be terribly unreliable.

I think the China story this year will be a plus for stocks, especially for BHP and I’m not alone.

This chart shows what the experts based at stock brokerages and investment banks think of this stock that’s a proxy for the health of the Chinese economy.

BHP

This shows six out of six analysts like the company and the average consensus rise is 10.6%. The gain would be stronger ahead if China can shoot the lights out growth-wise over the rest of 2025 and then into 2026.

When making speeches encouraging people to be more educated about money, I’ve often joked with my audiences by saying: “If anything is worth doing, it’s worth doing for money!”

If we can cop a couple more rate cuts this year as big banks think we will, and Donald Trump can pull off a fair and reasonable trade deal with China, we should see the second biggest global economy growing faster than expected, which will be good for stock prices, our super, the health of the economy, the Aussie dollar and even the budget deficit, as higher iron ore prices deliver more tax dollars to Dr Jim Chalmers Treasury coffers.

That’s why I’m rooting for China, and you should too.

In case you need proof about why we should be rooting for China, check out these numbers from Infochoice.com.au:

1. In 2023, Australia sold roughly $219 billion worth of goods to China or about 8.2%of Australia's GDP.
2. From the most recent mining boom, primarily driven by China, the RBA estimates that the boom boosted real per capita household incomes (adjusted for inflation) by 13%, reduced unemployment by 1.25%, and raised real wages by 6%!
3. China also spent $15 billion on services like international student tuition fees and tourism. Agricultural products like meat, wool and wheat made up a further $11.5 billion, with about 80% of Australia's wool exports going to China.

Yep, the boys from Beijing and their consumers, as well as businesses, are very important to Australia and you. Go China!