China Indexes Struggle After U.S. Restricts Chinese Investment

Li Chen
25 Feb, 2025
Hong Kong

Stock market indexes in China and Hong Kong extended losses of the week after investors questioned the recent revaluation of tech stocks amid euphoria surrounding the rapid adoption of artificial intelligence technology.

Stock market indexes in China and Hong Kong traded down for the second session in a row after surging in the previous week.

The Hang Seng index decreased 0.5%, the CSI 300 index dropped 0.6%, and the U.S. placed restrictions on Chinese investment in technology and infrastructure in the U.S. 

The Hang Seng Tech index recovered from an earlier loss of as much as 4%, and the CSI 300 index trimmed losses in the session, but market sentiment remained weak. 

The incoming U.S. presidential administration has chosen to impose tariffs on goods shipped by Chinese companies, which is a tax on imported goods, in the hopes that it will provide additional income to the federal government but will not shift manufacturing to the U.S.

Moreover, during the first administration of Trump, over the four years to 2020, China's exports to the U.S. rose more than fifty percent, despite higher trade barriers and the start of the tariff regime.

The import tax on Chinese and Asian goods will drive inflation higher, forcing the U.S. Federal Reserve to keep higher interest rates for longer, which could push the U.S. economy into a recession.

 

China Indexes and Stocks 

The Hang Seng index declined 0.5% to 23,214.73, and the CSI 300 index dropped 0.6% to 3,947.74. 

Alibaba Group Holding Ltd. decreased 3.5% to HK $130.90, Tencent Holdings dropped 2.4% to HK $485.20, and Baidu Inc. fell 3.5% to HK $86.20.

China Vanke Company dropped 1.9% to HK $5.99, Longfor Group Holdings declined 1.5% to HK $10.16, and Sun Hug Kai Properties eased 0.4% to HK $72.95.