LONDON, Sept 5 Reuters JPMorgan has ditched its buy recommendation on Chinese stocks, warning of the risk of a second tariff war after November39;s U.S. election and citing worries about the country39;s growth.

The bank downgraded China to neutral from overweight in a note on Wednesday and recommended investors add to bets on countries such as India, Mexico and Saudi Arabia instead.

WHY ITS IMPORTANT

China39;s economy is stumbling by its standards and the country is struggling to attract global investors, who have moved heavily into other emerging markets such as India.

KEY QUOTE

China equities could see heightened volatility around the upcoming U.S. elections, JPMorgan analysts, including Pedro Martins, said in the note.

The impact of a potential 39;Tariff War 2.039; with tariffs increasing from 20 to 60 could be more significant than the first tariff war.

CONTEXT

China39;s CSI 300 stock index has fallen more than 40 since hitting a record high in 2021, with the country increasingly in economic conflict with the United States and suffering from a property crisis.

Survey data over the weekend showed China39;s manufacturing activity sank to a sixmonth low in August. And weakerthanexpected secondquarter growth called into question China39;s ability to hit its 5 GDP target this year.

BY THE NUMBERS

JPMorgan said U.S. tariffs of 60 on Chinese products, as Republican presidential candidate Donald Trump has suggested, may reduce China39;s GDP growth by two…