China, Hong Kong stocks fall as investors temper hopes for Trump-Xi meeting

SHANGHAI: China and Hong Kong stocks fell on Wednesday, as investors tempered expectations for an upcoming meeting between US and Chinese presidents, while rising trade tensions with Europe weighed.

The real estate sector, however, advanced amid signs of fresh government support.

The large-cap CSI300 Index was down 0.5% by the lunch break, while the Shanghai Composite Index fell 0.4%.

In Hong Kong, the Hang Seng Index dropped 0.8%.

“The planned meeting between US President Donald Trump and Chinese President Xi Jinping is a sign the US-China relationship is becoming more predictable,” Oxford Economics said in a report.

“However, trade, technology, and security policies are likely to stay on a structurally more restrictive path,” the think tank said, forecasting “a calmer, but not closer, relationship.”

The main focus of the leaders’ September 24 meeting is whether Trump and Xi will signal an extension to a trade truce struck last year that averted a major shock to the global economy.

The European Central Bank on Tuesday said China’s industrial transformation is squeezing European firms out of global markets.

Rating agency Fitch said that China’s trade shock has affected the euro zone, particularly export-oriented Germany.

It lowered China’s 2026 growth forecast by 0.1 percentage point to 4.5%, citing its increasing economic imbalances.

An index tracking China’s carmakers fell 0.6% as some European auto executives and politicians have called for local content rules and expanded tariffs to curb vehicle sales from China.

An index of China’s new energy vehicles declined nearly 1%. Meanwhile, a rebound in tech shares lost steam in both China and Hong Kong.

Property shares in both markets jumped after a Reuters report that Chinese regulators asked some banks not to classify overdue loans to China Vanke as non-performing and extend repayment deadlines for the state-backed developer.