China Stocks Rebound Amid Hopes of Easing U.S. Trade Tensions

Li Chen
23 Apr, 2025
Hong Kong

Stocks rebounded in China and Hong Kong amid hopes of cooling trade tensions with the U.S. 

The Hang Seng index advanced 2%, and the mainland-focused CSI 300 index gained more than 1% following a rebound on Wall Street.

U.S. Treasury Secretary Scott Bessent told investors in a closed-door meeting that the current high level of trade tensions with China is "unsustainable on both sides," and the two trading partners would have to find a common ground. 

Bessent's comments raised hopes that the Trump administration's punitive tariffs of 145% could be substantially cut as early as this month. 

The unilateral tariffs imposed by the Trump administration have stoked fears of high inflation and a sharp slowdown in the U.S. economy. 

Moreover, as many as one million jobs in U.S. small businesses and an additional three million jobs in China are likely to be lost over the rest of the year if the cumulative U.S. tariffs are imposed starting in May. 

Investors shifted their attention to the announcement after the Politburo meeting later in the week, amid hopes of more clarity  about the previously announced fiscal measures. 

Later in the week, market participants are awaiting earnings results from several leading banks, property developers, and financial services providers. 

On the economic front, the People's Bank of China held steady its loan prime rates for the sixth consecutive month amid elevated global trade uncertainties. 

The one-year rate, used for most corporate and household loans, was held at 3.1%, and the five-year rate, the reference rate for mortgage loans, was kept unrevised at 3.6%. 

Last week, China reported its first-quarter GDP growth of 5.4%, matching the rate in the previous quarter amid Beijing's efforts to revive economic activities. 

Beijing is prioritizing consumer spending in its ongoing stimulus program, and policymakers are considering raising 300 billion yuan through the sale of ultra-long special treasury bonds and financing a consumer goods trade program.  

 

China Indexes and Stocks 

The Hang Seng index jumped 2.2% to 22,048.59, and the CSI 300 index added 1% to 3,792.20. 

Leading exporters and online platform operators led gainers in China and Hong Kong trading. 

Alibaba Group Holding jumped 2.2% to HK $116.40, Tencent Holdings jumped 3.3% to HK $476.0, and Meituan advanced 3.3% to HK $133.40. 

Xiaomi Corp. jumped 6.6% to HK $47.35, Sunny Optical Technology Group gained 3.3% to HK $65.15, and Kuaishou Technology increased 3.3% to HK $51.90. 

Zijin Mining Group decreased 4.4% to HK $17.18 despite the price of gold in international trading crossing $3,500 before pulling back closer to $3,300.