Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
Chinese equities experienced their biggest weekly rally since 2008, as a massive wave of buying overwhelmed the Shanghai stock exchange on Friday. The CSI 300 Index surged 4.5%, bringing its weekly gain to 16%, following a series of economic stimulus measures announced by Xi Jinping's government.
Trading was so intense that it caused glitches and delays in processing orders, prompting the Shanghai exchange to investigate. This burst of activity signals a shift in investor sentiment after years of losses, with China's US$8.9 trillion stock market having been one of the world's worst performers.
Earlier in the week, Chinese authorities launched a much-anticipated monetary stimulus package and pledged further support for the housing market and consumption. Although the details of the stimulus plan are still emerging, many investors are afraid of missing out on a potential sustained rally.
As domestic markets close for Golden Week holidays, investors are eager to avoid missing gains that could continue in Hong Kong. According to David Chao, a strategist at Invesco Asset Management, the "FOMO" (fear of missing out) among investors is high, with Chinese stocks having rallied close to 10% in just three days. Some analysts believe there is still a 20% upside potential for Chinese stocks based on historical valuations.
The rally also extended to Hong Kong, where a gauge of Chinese stocks rose 2.5%, marking its longest winning streak since 2018. Additionally, China's tech-heavy ChiNext index surged a record 10%, and turnover reached nearly three times the volume seen earlier in the week.
Despite the broad rally, Chinese bank stocks declined amid concerns about a reported one trillion yuan capital injection plan. Investors fear this move could dilute the return on equity for banks, according to JPMorgan analysts. As a result, investors may be shifting focus away from stable sectors like banking, which had been popular during market downturns.
Looking ahead, some investors expect further fiscal stimulus to sustain market momentum. Raymond Chen, a fund manager at ZiZhou Investment Asset Management, said, “We can expect fiscal measures as well to come.” Other analysts, including those from Morgan Stanley, are turning bullish, predicting another 10% upside for the CSI 300 Index in the near term.
The bullish sentiment also boosted Asian stocks with exposure to China’s economy, as a risk-on mood spread across the region.
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