Chinese shares rose on Wednesday as investors grew optimistic ahead of a key meeting between U.S. President Donald Trump and Chinese leader Xi Jinping, where the two are expected to discuss a trade framework aimed at easing tariffs and tackling fentanyl exports. Hong Kong markets remained closed for a local holiday.
Market Overview:
The blue-chip CSI300 Index gained 0.5%, while the Shanghai Composite Index rose 0.4% by midday. The meeting, expected to take place in South Korea on Thursday, has fuelled hopes of progress toward a more stable U.S.-China trade relationship.
Policy Context:
Beijing on Tuesday unveiled a detailed proposal for its five-year development plan, signaling its intention to keep growth within a “reasonable range.” Economists at UBS interpreted that as a 4.5%-5% target for economic expansion. However, markets reacted mildly as the country had just wrapped up its high-level plenum, pledging to stimulate consumption and technological innovation.
Sector Highlights:
The CSI New Energy Index jumped over 3%, despite electric vehicles being excluded from China’s list of strategic industries for the first time in more than a decade. Semiconductor-related shares rallied, led by Guochuang Software, which surged 13%, tracking a strong overnight performance by Nvidia. Meanwhile, non-ferrous metal stocks rose 3%, supported by stronger commodity sentiment.
Why It Matters:
Investor optimism reflects renewed confidence in U.S.-China economic engagement and China’s efforts to stabilize growth amid slowing domestic demand. The Trump-Xi meeting could shape the next phase of tariff policy and tech trade relations, while China’s new economic blueprint signals a pivot toward steady, innovation-led growth.
What’s Next:
Markets will be watching Thursday’s Trump-Xi talks for signals on tariff reductions and potential agreements on fentanyl exports. Any positive outcome could further boost risk sentiment and extend the rally in Chinese equities, though investors remain cautious amid global economic uncertainty.
With information from Reuters.