China Avoids Negotiations with Unpredictable Trump Administration, PBOC Weakens Yuan

Li Chen
25 Apr, 2025
Hong Kong

Stocks in China and Hong Kong advanced on Friday and extended weekly gains amid looming uncertainties about the U.S. trade policy.

The Hang Seng index advanced 1.4%, and the mainland-focused CSI 300 index edged up 0.4%. 

For the week, the Hang Seng index gained 3.8%, and the CSI 300 index added 0.8% as investors stayed on the sidelines ahead of the possible U.S. tariffs as high as 145% starting next week. 

Market sentiment improved in Hong Kong after the U.S. Fed officials commented that interest rates could be lowered in June if the high tariffs dampen economic activities and hurt the job market.  

Fed Governor Christopher Wallace and Cleveland Fed President Beth Hammack separately commented on the possible rate cut outlook. 

Chinese officials in Beijing denied that they are engaged in trade talks with the Trump administration, countering assertions made by Donald Trump. 

The ministries of foreign affairs and commerce reiterated their demands for the removal of unilateral U.S. tariffs and announced measures to halt shipment of rare earth minerals and canceled the purchase of Boeing aircraft. 

The Chinese yuan drifted lower to 7.28 against the U.S. dollar in offshore trading after the People's Bank of China weakened the exchange rate to 7.2098 on Thursday. 

The yuan dropped as low as 7.42 on April 8 after the U.S. slapped unilateral tariffs on Chinese imports. 

 

China Indexes and Stocks 

The Hang Seng Index rose 1.4% to 22,197.45, and the mainland-focused CSI 300 index advanced 0.4% to 3,797.54. 

Technology stocks led market indexes higher in Friday's trading in the hopes that the HKMA will follow the possible rate decline in the U.S. in June. 

Alibaba Group Holding rose 3.3% to HK $117.70, Tencent Holdings advanced 2.8% to HK $484.20, and Baidu jumped 5.2% to HK $88.70. 

Shenzhou International Group Holdings jumped 2.4% to HK $54.05, NetEase jumped 4.2% to HK $166.90, and SMIC dropped 1.3% to HK $45.75.