China, HK stocks end higher as Beijing shows openness to tariff talks

SHANGHAI: Chinese and Hong Kong stocks closed higher on Wednesday, after China published a white paper indicating openness to talks following 104% US tariffs, and as state pledges to support the local market also boosted sentiment.

The blue-chip CSI300 Index opened down but then clawed back losses to end 1% higher, while the Shanghai Composite Index rose 1.3%. Hong Kong’s benchmark Hang Seng rose 0.7%.

China on Wednesday said it would take resolute and effective measures to safeguard its rights and interests in response to US President Donald Trump’s 104% duties on Chinese imports.

China also released a White Paper that said Beijing was willing to communicate with Washington to resolve differences and friction that it considered normal for the world’s two biggest economies.

“Risk assets have bounced on a white paper that suggests China is open to dialogue - though does not confirm US/China negotiations are under way and means further headline noise is inevitable,” Citi analysts said in a note.

Reuters reported China’s top leaders plan to convene a meeting as early as Wednesday to discuss measures to boost the economy and stabilise capital markets.

“The first real battleground of the tariff war is financial markets, especially stock markets,” said Ting Lu, chief China economist at Nomura. “The financial markets of both economies have been severely hit, and the worst might be yet to come.”

Lu expects China’s stabilisation funds, supported by the country’s central bank, to intervene significantly in stock markets over coming weeks.

China’s biggest brokerages have pledged to help steady domestic share prices, the Shanghai bourse said, while scores of listed companies said they planned to buy stocks.

Chinese state holding companies, led by Central Huijin, continued to support the stock market by increasing share investment.