Chinese stocks rise by most in a week as trade war with US fuels stimulus hopes
Advertisement
The CSI 300 Index, a gauge of the nation's biggest companies, advanced 0.2 per cent to 3,778.18 at the trading break, after jumping as much as 0.5 per cent to log the best intraday gain since April 14. The Shanghai Composite Index added 0.3 per cent. Hong Kong's stock market is closed for the Easter holiday and will reopen on Tuesday.
The gains were led by tech firms. Artificial intelligence chip designer Cambricon Technologies jumped 5.7 per cent to 707.60 yuan, while high-end processor maker for servers and computers Hygon Information Technology advanced 2.1 per cent to 152.82 yuan. Electric vehicle battery maker Contemporary Amperex Technology rose 3.3 per cent to 232.78 yuan.
Limiting gains, Chinese baijiu maker Luzhou Laojiao fell 1.8 per cent to 129.43 yuan, while property developer China Vanke eased 1.9 per cent to 7.17 yuan.
Traders are betting on bolder stimulus in the coming months to help mitigate risks amid intensifying trade tensions between China and the US, according to global investment banks. While UBS, Goldman Sachs, Nomura and others have cut their forecasts for China's economy, they expect more measures from Chinese policymakers to underpin the economy.
Advertisement
'We expect the government to accelerate bond issuance and the spending of proceeds in the coming months,' Andrew Tilton, an economist with Goldman Sachs, said in a note over the weekend.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
RTHK
35 minutes ago
- RTHK
HK and mainland markets rally after bad week
HK and mainland markets rally after bad week The Hang Seng Index ended trading on Monday up 225 points, or 0.92 percent, at 24,733. File photo: RTHK Mainland and Hong Kong stocks gained on Monday, recovering from last week's sharp declines, as defence and tech stocks led gains. The benchmark Hang Seng Index ended trading for the day up 225 points, or 0.92 percent, at 24,733. The Hang Seng China Enterprises Index climbed 1.01 percent to 8,893 while the Hang Seng Tech Index jumped 1.55 percent to 5,481. Up north, the benchmark Shanghai Composite Index closed up 0.66 percent at 3,583 while the Shenzhen Component Index closed 0.46 percent higher at 11,041. The combined turnover of these two indexes stood at about 1.5 trillion yuan, down from 1.6 trillion yuan on Friday. Sectors such as military equipment and gold led gains while stocks related to photovoltaic equipment suffered major losses. The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 0.5 percent to close at 2,334 The rebound on Monday came after markets last week booked their steepest losses since April. The bullish trend for Chinese equities has started to show signs of slowing as the much anticipated Politburo meeting and tariff negotiations with the United States both failed to deliver positive surprises. "Market sentiment is becoming more volatile as positive catalysts are losing momentum," Citic Securities said in a note, adding that investors might shift focus to defensive sectors for shelter or industries with clear growth trajectories. The tech sector jumped 1.6 percent and AI-related shares added 1.7 percent, leading markets higher. Domestic chip stocks continued to rally on Monday after Beijing raised concerns over potential security risks in Nvidia's H20 chip. Looking ahead, markets are awaiting new developments on the trade truce between China and the United States that expires on August 12. US Treasury Secretary Scott Bessent said Washington has the makings of a deal and was "optimistic" about the path forward. "Given rising uncertainties in the foreign market, especially in the US where Trump's intervention in economic reporting undermines the efficacy of policies, both on- and off-shore Chinese markets will likely be under pressure in the near term," Hong Hao, chief investment officer at Lotus Asset Management, said in a note. (Reuters/Xinhua)
HKFP
2 hours ago
- HKFP
Hong Kong may see surplus in current financial year, defying previous forecasts of continuing deficit
Hong Kong may see a surplus in the current financial year, the city's finance chief has said, defying previous forecasts of recording a deficit for the fourth straight year. Hong Kong has seen improved performance in retail sales and the property market, recording 3.1 per cent year-on-year growth in the second quarter, Financial Secretary Paul Chan said on a Commercial Radio programme on Sunday. 'We originally expected deficits of a few billion in our operating account for the 2025-26 fiscal year, but if this momentum continues, there is a chance our operating account may record a surplus,' Chan said in Cantonese. Hong Kong saw a deficit of HK$87.2 billion for the 2024-25 fiscal year, the third consecutive shortfall. During his budget address in February, Chan attributed the deficit to the poor property market taking a toll on government revenue from land sales and stamp duty. Due to the deficit, the government said that it aimed to cut spending by 7 per cent over the next three years. At the time, the finance minister said the city forecast a continuing deficit of HK$67 billion in the coming 2025-26 financial year. As part of spending cuts, the government axed a HK$2,500 annual subsidy for students and reduced the public transport subsidy scheme, which offers a monthly rebate for commuters. Chan said on Sunday that while the government had upcoming infrastructure expenses, including those for the Northern Metropolis development plan near the border with mainland China, the city's finances were 'very stable and healthy.' Last week, the government said in a statement that Hong Kong's financial markets' performance had steadily improved this year. The Hang Seng Index recorded an increase of over 25 per cent so far this year, according to the statement. The government has also 'achieved remarkable results' in attracting talent and investment, it said. Meanwhile, Chan said on Wednesday that more mainland Chinese companies were expected to list on Hong Kong's stock exchange amid geopolitical tensions, which have made it harder for them to list in the US. Mainland Chinese companies 'would naturally want to come to Hong Kong for listing, because… they can access both international and Mainland capital,' the finance chief said.
AllAfrica
2 hours ago
- AllAfrica
Dependent and exposed: Taiwan's military supply chain crisis
In modern war, the side that produces faster usually wins. From the Liberty ships of World War II to the drone swarms in Ukraine, mass production, not just strategy or bravery, decides who survives. Taiwan does not yet have that ability. Currently, Taiwan can produce about 1,000 precision missiles per year. Experts in the United States estimate it would need more than 1,200 anti-ship missiles to stop a full-scale Chinese invasion, and that is only one type. The People's Liberation Army (PLA) already has more than 3,000 ballistic and cruise missiles and can make more quickly. Taiwan's current stockpile could be used up in just a few days. Instead of building enough at home, Taiwan has depended on US arms sales. That choice now carries high risk. As of 2024, more than US$21 billion in promised weapons—more than Taiwan's whole annual defense budget—have not yet arrived. Some will not come until 2026 or later, including fighter jets, anti-ship missiles and mobile rocket systems. Even simple weapons like Stinger missiles are arriving three years late. If a war starts soon, they will not be ready. At home, Taiwan spends only 2.45% of its GDP on defense. This is less than what South Korea or Israel spends and barely more than the NATO guideline. More than half of that spending goes to salaries and upkeep. Less than one-fourth of defense purchases are made inside Taiwan. Almost all of that goes to just three state-owned companies: the National Chung-Shan Institute of Science and Technology (NCSIST), the Aerospace Industrial Development Corporation (AIDC) and the China Shipbuilding Corporation (CSBC). Private industry is barely involved. So can Taiwan build a real defense industry with the ability to produce large numbers of weapons, manage supply chains and sustain operations during war? Taiwan is known for high-end manufacturing, but it lacks war-ready production. There are about 2.99 million workers in manufacturing, making up 25.9% of the national workforce. Yet fewer than 0.15% work in the defense sector. Taiwan has around 1.1 million skilled technicians under age 40 who could be mobilized, but there is no reserve force or civilian-military integration plan. The country has only one composite repair dock for fighter jets, and it can service just four to six aircraft at a time. Production levels are far too low for modern war. In 2024, Taiwan is expected to produce just over 1,000 missiles in total, including surface-to-air, anti-ship, and cruise types. Hsiung Sheng long-range missiles are produced at 140 units per year. Sky Bow III interceptors are limited to 96 per year. The Chien Hsiang loitering munition line is growing but still capped at 200 units annually. These rates fall short. Taiwan has fewer than 3,500 military drones in total. Ammunition is in even worse shape. The army estimates it needs 50,000 to 70,000 rounds of 155 mm artillery in the first month of combat. Current monthly production is under 5,000 rounds. The budget structure makes things worse. Taiwan's 2024 defense budget is NT$606.8 billion (US$18.8 billion), about 2.5% of GDP. More than half goes to salaries and pensions. That leaves less than 25%—about NT$145.8 billion (US$4.5 billion)—for weapons procurement, research and stockpiling. Even this amount is not fully usable. The legislature froze NT$90 billion. Major projects like the next-generation submarine have been delayed. A slight increase to NT$647 billion in 2025 will not close the gap. Meanwhile, supply chains remain fragile. Over 70% of missile parts—seeker heads, GPS units, engines—are still imported . Many components fall under US arms export rules that block local substitutes, even during war. Taiwan's US arms backlog now totals US$21.5 billion, or 110% of its 2025 defense budget. Key systems like Patriot missiles, SLAM-ERs, and 120 mm tank rounds are facing delivery delays of three to five years. Some were ordered as early as 2017. By mid-2025, only partial shipments have arrived. Taiwan still needs US approval for subsystem integration and has no local alternative to ITAR-controlled components. Policy has not solved these problems. No law requires state-owned firms to help private defense companies scale up. Procurement is spread across ministries, creating delays and confusion. Civilian drone companies have offered to modify platforms for defense use, but fewer than a dozen have been approved. The defense workforce is aging rapidly. At Aerospace Industrial Development Corporation (AIDC), the average employee is 49.3 years old. A retirement wave is coming, and no training pipeline exists to bring in younger engineers. Without new talent, critical skills will disappear, and money alone will not fill the gap. China is better prepared than Taiwan in every part of military production. It has more factories, more supplies, more trained people and a government system that moves with speed. This makes China one of the most dangerous military-industrial powers in the world. First, China dominates the shipbuilding Industry. Its shipyards build more than 50% of the world's total output. Just four shipyards—Dalian, Jiangnan, Guangzhou, and Hudong-Zhonghua—built more combat ships in five years than most Western navies combined. Second, China leads in drones, missiles and rockets. It makes 70% of the world's drones. Da-Jiang Innovations alone produces more drones in one week than some countries make in a year. China plans to make over 1 million loitering munitions each year by 2026. It also builds tens of thousands of short-range and cruise missiles each year, along with more than 10,000 long-range artillery rockets. Third, China's system is built ready for upcoming war. More than 200 major state firms and thousands of private suppliers are locked into a military-civil system. Civilian factories are mapped and assigned wartime jobs. Orders can be sent and carried out in days. China's laws allow the government to take over labor, machines and materials for military use. Fourth, the system is full of talent and tools. China trains tens of thousands of engineers through defense universities. Top defense firms hire straight from these schools. The Ministry of Industry and Information Technology tracks every piece of production, from steel and drone parts to AI-guided targeting software. Finally, the budget is massive. Officially, China's defense budget is US$231 billion. But off-budget spending likely raises it to over US$470 billion. Much of this goes to weapons, infrastructure and stockpiling. Taiwan needs to build a defense industry that can mass-produce simple, reliable weapons—fast. South Korea focused on 'good enough' systems and gave clear contracts with monthly targets. Taiwan should copy that. Firms that meet quotas should get rewards. No more one-off prototypes. Civilian factories must join the fight. Ukraine turned garages into drone shops and scaled defense output from US$1 billion to US$35 billion in two years. Taiwan has even better industrial skills. But it needs laws that let the government help firms switch to wartime work fast. Metal, auto parts, and electronics sectors should run drills and stock tools for conversion. Local production must also be cheap. Ukraine now builds artillery and drones for a fraction of import costs. Taiwan's drone makers and software firms can do the same. They just need grants, bulk orders and open calls to adapt commercial products for defense. Innovation must go beyond the military. Taiwan's Ministry of Economic Affairs should launch a full-scale investment program for dual-use tech. Australia already does this. Let non-defense firms apply for R&D grants if their tools help national security. The focus should be on small and medium businesses. Taiwan also needs a trained tech reserve. Israel built one through Unit 8200. Taiwan should recruit engineers and coders into part-time defense roles with clear missions and fast call-ups. Taiwan must also build with allies. Invite Japan, Australia, and the US to set up shared production lines for drones and munitions. Co-production means supply security. Taiwan should also export affordable drones and sensors to partners like the Philippines, Vietnam, and Indonesia. A working defense export plan builds peace through strength. The United States and other allies will likely help Taiwan in a crisis. But help takes time, and it will not cover every need. Taiwan must be able to hold its ground until support arrives. That means building a defense system that can stand on its own. It depends on factories, supply lines, and trained civilians who can step in when needed. A modern war needs the whole society to be ready. The future of Taiwan will be decided by what it can build, not just what it can buy. Yenting Lin is a master's student in public policy at George Mason University. He holds a BA and BS from National Chung Cheng University in Taiwan. His research focuses on national security and US–Taiwan–China relations. His writing has appeared in Small Wars Journal, American Intelligence Journal, and The Defence Horizon Journal, and he contributes columns to Ketagalan Media, Asia Times, Modern Diplomacy, Geopolitical Monitor, and International Angle. The views in this article are his own.
