China Investors Look Beyond Elevated Trade Tensions, China Retaliates with Critical Minerals Export Ban

Li Chen
04 Dec, 2024
Hong Kong

Stock market indexes in China and Hong Kong retained an upward bias amid optimism about additional fiscal stimulus later in the month. 

The Hang Seng index advanced 0.3% to trade at a three-week high, but the mainland-focused CSI 300 index struggled to stay above the flatline. 

Investors shifted their focus to a meeting of policymakers later in the month and pinned their hopes on the release of additional stimulus measures to revive weak consumer confidence and provide financial measures to complete unfinished residential projects.

China retaliated with its own trade restrictions for shipping gallium, graphite, and germanium to the U.S., following a list of new trade restrictions announced by the U.S. 

The Ministry of Commerce said that rare earth materials are used for both civilian and military applications.

Investors generally overlooked rising trade tensions with the U.S. because China's exports have jumped more than 20% over the last eight years despite the widening of the tariff regime and growing trade tensions. 

 

China Stock Movers 

The Hang Seng index increased 0.3% to 19,808.11, and the mainland-focused CSI 300 index declined 0.2% to 3,945.34. 

Semiconductor Manufacturing International increased 2.6% to HK $26.55, and Hua Hong edged up a fraction to HK $20.50.

Trip.com Group advanced 2.9% to HK $531.50, and investors bid up stocks in the hope that the recent visa-free travel from an additional nine countries is likely to provide a boost to the company's revenue. 

On November 22, the Ministry of Foreign Affairs of China expanded its list of countries for visa-free entry policy by nine countries. 

The ministry added Bulgaria, Romania, Croatia, Montenegro, Malta, Estonia, North Macedonia, Latvia, and Japan to the list of visa-free entry policy. 

New World Development declined 2.4% to HK $6.42 and extended this year's loss to 45%, amid worries of corporate governance and the lack of details about the latest management reshuffle. 

The embattled real estate company is looking to sell HK$13 billion of assets in the current financial year ending in June 2025 and trim its HK$140 billion of debt. 

NWD is slated to be removed from the Hang Seng index on December 9.