SHANGHAI: China and Hong Kong shares ended higher on Thursday, as investors played down the latest US tariff increase on Chinese imports and pinned their hopes on talks between the world’s two largest economies as well as on market and policy support from state firms.
China’s blue-chip CSI300 Index closed 1.3% higher, while the Shanghai Composite Index rose 1.2%. Hong Kong’s benchmark Hang Seng was up 2.1%.
The rise in Hong Kong shares followed a 6% surge in Chinese internet companies listed on the US market overnight after US President Donald Trump temporarily cut the steep tariffs he had just imposed on dozens of other countries.
Trump at the same time escalated tariffs on China to 125% from the 104% level that just took effect on Wednesday.
“Even though it’s obvious that the tariffs are targeting China, there is still some room for manoeuvring and negotiations if they can pause tariffs on other countries,” said Jason Chan, senior investment strategist at Bank of East Asia.
“Markets still have some hope that at least some discussions could take place.”
Tech majors traded in Hong Kong climbed 2.7%.
Kai Zhan, international partner at Chinese law firm Yuanda, said announcements overnight showed “Trump is using tariffs as a negotiation tactic rather than acting irrationally.”
Zhan said the market was also expecting that the White House’s temporary tariff exemptions for other countries provided China with opportunities to reroute its exports.
Non-ferrous metals shares rose 3.5%, leading gains onshore. China on Wednesday raised additional duties on American products to 84% and imposed restrictions on 18 US companies, mostly in defence-related industries.
“We believe Beijing views these US trade actions as nothing short of a declaration of economic war, not just a trade dispute.
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