Stocks in Hong Kong surging towards a two-month peak, fuelled by optimistic whispers of potential trade negotiations between Trump and Xi.
Hittin' the Stock Market
The Hang Seng Index saw a 1.1% surge to 23,420.36 by noon, with the Hang Seng Tech Index following suit, increasing 0.6%. Over on the mainland, the CSI 300 and Shanghai Composite Index both experienced a 0.5% boost.
In the spotlight, electric-vehicle maker Li Auto climbed 6.5% to HK$117.10, and gold producer Zijin Mining Group advanced 3% to HK$18.30. Industrial and Commercial Bank of China, China Construction Bank, Alibaba Group Holding, and Tencent Holdings also made some impressive gains.
By the way, a chat between Xi and Trump, their Chinese and American counterparts, will be intriguing. If these talks happen, it could put investors at ease, potentially signifying a long-term trade deal between Beijing and Washington. This could follow from the 90-day tariff truce they agreed to in Switzerland in early May.
So, how does the US-China tariff war affect ordinary Chinese citizens? Well, it's a layered situation.
First off, the tariffs have led to a steep drop in bilateral trade, impacting Chinese exporters and industries that depend on the US market. economically, the uncertainty can affect consumer spending, investment, and overall growth.
The employment sector isn't immune. Industries heavily relying on US exports, like electronics and manufacturing, may face reduced production and jobs due to the tariffs. Price increases are also a concern, with tariffs potentially leading to higher prices for certain goods.
On a brighter note, China is making efforts to diversify its trade relationships and find new markets, lessening its dependence on the US market for certain sectors and workers. Consumers might also experience some temporary relief as tariffs on US imports have been reduced from 125% to 10% for a limited time.
Yet, the long-term stability remains uncertain because the tariff reduction is only temporary. For Chinese citizens, the tariff war brings about a mix of challenges and opportunities, all firmly intertwined with their economic and social lives.
- The potential US-China trade deal, resulting from diplomacy between their leaders, could positively impact businesses in the finance and technology sectors, as it might lessen the uncertainty caused by the trade war.
- The tariff war has negatively affected various businesses in China, particularly those relying on exports to the US, such as electronics and manufacturing, leading to potential job losses and increased prices for consumers.
- To mitigate this impact, China is focusing on increasing its diplomatic and business relationships with other nations, aiming to diversify its trading partners and lessen its dependence on the US market in certain sectors.
