China Unveiled Additional Measures to Stabilize Financial Markets Ahead of Trade Talks with U.S.

Li Chen
07 May, 2025
Hong Kong

Mainland China and Hong Kong stock market indexes shot up in early trading but lost momentum after a few hours of trading as policymakers announced measures to support economic growth. 

The Hang Seng index soared as much as 1%, and the mainland-focused China edged down after rising as much as 0.7%. 

On Wednesday, the People's Bank of China and the China Securities Regulatory Commission announced a new set of measures to stabilize financial markets and support the smooth functioning of the economy. 

The People's Bank of China lowered its reserve ratio requirements by 50 basis points for banks, which is expected to make available an additional one trillion yuan, or about $139 billion. 

In addition, the central bank announced its willingness to provide support to listed companies to acquire their shares. 

Beijing policymakers are expected to announce measures to provide additional support to export-sensitive companies and facilitate foreign fund flows into the stock market. 

Despite the fresh efforts by policymakers, central bankers, and regulators, investors remained skeptical and worried about the effectiveness of the measures. 

The Hong Kong Monetary Authority intervened in the foreign exchange market for the fourth time since Friday to keep the Hong Kong dollar's peg stable amid rising inflow of foreign funds ahead of the Hong Kong listing of CATL. 

Contemporary Amperex Technology, the largest maker of electric vehicle batteries, moved one step closer to its Hong Kong listing after the exchange's committee approved its listing. 

Earlier on Wednesday, China said tariff-related talks with the U.S. will start later in the week in Switzerland. 

China's Vice Premier He Lifeng is scheduled to meet the U.S. Treasury Secretary Scott Bessent from May 9 to 12 in Switzerland. 

 

China Indexes and Stocks 

The Hang Seng index inched up 0.5% to 22,779.11, and the mainland-focused CSI 300 index edged up 0.5% to 3,826.88. 

CATL advanced 2.2% to ¥236.16 in Shanghai trading ahead of the company's $5 billion listing on the Hong Kong Stock Exchange next week. 

Nongfu Spring Co. Ltd. declined 2% to HK $37.85, JD Health International Inc. rose 1.3% to HK $38.0, and Trip.com Group Ltd. rose 3% to HK $485.60. 

Alibaba Group declined 1.3% to HK $122.10, Tencent Holdings decreased 1.2% to HK $493.0, and Baidu Inc. gained 0.7% to HK $88.40.