Chinese stocks rebound as nation stands up to Trump 'bullying' tariffs
Chinese stocks today bounced somewhat from steep declines on Monday, heartened by the nation's strong response to US President Donald Trump's threat to impose further tariffs on China and by statements of corporate support for China's capital market.
The Shanghai Composite Index gained 0.91 percent in the morning session, while the Shenzhen Component Index edged up 0.42 percent. Hong Kong's Hang Seng Index gained 1.58 percent.
The Ministry of Commerce lambasted the newest tariff threats from Trump as "unilateral bullying" and said China will take countermeasures should the United States escalate its tariffs on Chinese imports.
Trump threatened to impose an additional 50 percent tariff if China, by a Tuesday deadline, doesn't rescind the 34 percent retaliatory tariff it imposed on US products last week.
"China will fight to the end if the US side is bent on going down the wrong path," said a ministry spokesperson, calling it a "mistake on top of a mistake."
Reinforcing the government's strong stance, state-owned sovereign fund Central Huijin Investment announced its confidence in China's capital market on Monday, saying it fully recognizes the current value of allocating assets in Chinese stocks and is increasing its holdings in exchange-traded funds.
A host of other companies followed suit with statements of support, including China Chengtong Group, China Merchants Group, new-energy tech firm CATL, China National Petroleum Corp and China Mobile. Some announced share buybacks to boost investor confidence.
Today's reversal in Hong Kong and Shanghai markets came a day after global markets tanked amid fears that Trump's tariffs on trading partners would lead to recession. The Hang Seng Index plunged 13.22 percent on Monday, and the Shanghai Composite Index lost 7.34 percent. Both markets were closed on Friday for a holiday.
"The turnaround is based on China's firm stance and quick response," said Zhou Junzhi, chief economist at China Securities. "The market performance may continue to fluctuate, but we may have seen the worst."
Trump instigated the tariff war last week, imposing levies on imports from most trading partners as retribution for what he called unfair trading practices. The 34 percent tariff he announced for China brought the total of US import levies on the nation to more than 50 percent.
As a counterattack, China announced on Friday to impose 34 percent levies on all products imported from the US starting from April 10.
The government has pledged to adopt policies to strengthen the domestic economy.
"Market confidence comes from China's economic resilience, more diversified trade structure and supportive policy stances," Zhou said. "We can expect more stimulus measures in the second quarter, and possibly cuts in reserve rate requirements and interest rates."
Elsewhere in Asia, Japan's benchmark Nikkei rose nearly 5 percent. South Korea and Indian were also in green territory, with only the Singapore stock index still showing losses in the morning session.
Nomura on Monday lowered its estimate of Japan's economic growth for 2025 to 0.6 percent from an earlier 0.9 percent, citing uncertainties in US tariff policy, which could hit the nation's car and electronics industries hard.
