What we’re seeing in markets, KiwiSaver and on the ground in China

Markets have been volatile in recent months, with periods of uncertainty followed by sharp recoveries. While short‑term movements can be noisy, long‑term outcomes continue to be driven by company earnings and underlying fundamentals. Staying focused on the bigger picture remains as important as ever.

In this edition of our newsletter, we share insights to help cut through the noise. Chiti reflects on his recent trip to China and what he observed on the ground, including how businesses and markets are positioning themselves. We also provide an update on KiwiSaver, along with a snapshot of current market conditions and what has been driving recent performance.

We hope these updates provide useful context and reassurance and help you stay informed and confident as a long‑term investor.If you would like to discuss your current portfolio, retirement planning needs, goals-based investing approach, or any other financial planning matters, please feel free to give our office a call at 09 553 8928 or email us at info@trilogyfs.co.nz.

Chiti’s China trip

I recently visited China and travelled through several major cities, including Beijing, Suzhou, Wuxi, Hangzhou, and Shanghai. What stood out most was the sheer scale and speed of development across the country.

These are not just large cities by global standards; they are mega-urban economies:

• Shanghai: ~24.7 million people

• Beijing: ~21.5 million people

• Hangzhou: ~10.7 million people

• Suzhou: ~6.9 million people

• Wuxi: ~4.6 million people

Source: worldpopulationreview.com

To put this into perspective, several of these cities individually have populations larger than entire countries, yet they are seamlessly connected and highly efficient.

Infrastructure & Transport

China’s infrastructure development is truly world-class:

• The country has built one of the largest high-speed rail networks in the world, with trains running at 300–350 km/h, linking major cities and dramatically reducing travel times.

• Cities like Shanghai, Suzhou, and Hangzhou are so well connected that travelling between them feels like commuting within a single mega-region.

• Shanghai’s metro is one of the largest in the world, moving millions of people daily with remarkable efficiency.

Clean Energy & Technology

Another striking observation was China’s push towards sustainability:

• A large portion of vehicles in major cities appear to be electric or hybrid, supported by widespread charging infrastructure.

• Large-scale installations of wind turbines and solar panels are visible across cities and surrounding regions.

• This reflects a strong national focus on renewable energy and emissions reduction, embedded into urban development.

The Shanghai Skyline

The highlight of the trip was undoubtedly Shanghai’s skyline. Standing along The Bund and looking across to Pudong, you are met with a breathtaking display of modern architecture: towering skyscrapers, iconic buildings, and a skyline that feels both futuristic and elegant.

By night, the city truly comes alive. The illuminated towers, reflections on the Huangpu River, and the sheer density of high-rise buildings create one of the most spectacular urban views in the world. It is a powerful symbol of China’s rapid growth and ambition.

Overall Impression

China’s development is happening at an extraordinary pace. The world leading level of scale and efficiency is created by a combination of:

• Massive population centres

• Advanced transport systems (HSR + metro)

• Rapid urbanisation

• Strong adoption of clean energy and energy transition.

While markets will always experience periods of volatility, sustained economic growth has historically supported strong equity market performance over time. If China delivers the level of growth currently expected, this creates a compelling long‑term backdrop for investors.

This is the lens through which we view China today. The bull reflects optimism grounded in fundamentals, not short‑term market moves. Over the next decade, we believe China has the potential to deliver a prolonged bull market as economic growth translates into rising company earnings and shareholder value.Fund managers have taken a similar view and increased their exposure to emerging markets such as China, India, etc.

KiwiSaver changes

With KiwiSaver tax statements now finalised, attention turns to the government contribution and a number of changes that took effect from 1 July 2025.

• The annual government contribution has been reduced. The rate is now 25 cents for every dollar contributed, down from 50 cents, which means the maximum contribution has fallen from $521.43 to $260.72 per year.

• Eligibility has also changed. Members aged 16 and 17 can now receive the government contribution if they meet the other criteria, while members with taxable income above $180,000 per year are no longer eligible.

Over the coming weeks, members who have fallen short of contributing the amount required ($1,048.86) to receive the full government contribution will receive reminders about topping up their contributions to maximise what they are entitled to.

Please ensure you have contributed the full amount to your KiwiSaver to receive the maximum government contribution by 15 June 2026.

Market update

• Markets have recovered strongly, with several major equity benchmarks pushing to all-time highs as investors look past the Iran war shock and back into growth, earnings, and liquidity.

• The UAE’s exit from OPEC is a structural negative for the cartel’s influence over oil prices, but near-term export disruption looks limited; the bigger market effect is a possible shift in longer-term supply dynamics.

• The Federal Reserve held rates steady at 3.50%–3.75% in its late-April decision, with debate inside the FOMC keeping the path for future cuts uncertain.

• In the U.S., large-cap equities have generally outperformed, with the S&P 500 trading near record territory in early May, while New Zealand shares look more defensive and the NZD has remained relatively soft versus the U.S. dollar.

• For NZ investors, that mix points to a stronger U.S. growth/risk backdrop versus a more cautious local market, with oil and rates still the main cross-asset drivers to watch.

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If you would like to discuss your current portfolio, retirement planning needs, goals-based investing approach, or any other financial planning matters, please feel free to give our office a call at 09 553 8928 or email us at info@trilogyfs.co.nz.

We are always happy to help.

Sincerely,

The Team at Trilogy Financial Solutions