"The weekend talks are better than expected," said one Chinese investment expert. Photo: AFP
Chinese stocks rallied and the yuan strengthened on Monday, after weekend talks in Geneva between Chinese and US officials showed encouraging signs of a de-escalation in a high-stakes trade war.
US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer held long talks on the weekend with senior Chinese officials led by Chinese Vice Premier He Lifeng in Switzerland. Both sides struck a positive note afterwards, with markets awaiting details of any early agreement later in the day.
China's blue-chip CSI 300 Index was up 0.6 percent at midday break, while the Shanghai Composite Index added 0.4 percent. Hong Kong's benchmark Hang Seng Index climbed 0.9 percent.
The yuan strengthened 0.2 percent against the dollar, while its offshore counterpart was up about 0.3 percent in Asian trade.
"The weekend talks are better than expected," said Charles Wang, chairman of Shenzhen Dragon Pacific Capital Management Co in Shenzhen. "Both sides are under strong incentives and pressure to push forward trade talks, but the game will be a long process.
"Both sides need to determine on areas of concession and persistence."
Before the talks, US President Donald Trump had signalled punitive tariffs of 145 percent on China would likely come down and even floated an alternate tariff figure of 80 percent that he said "seems right".
China is at the epicentre of Trump's global trade war that has roiled financial markets, upended supply chains and fuelled risks of a sharp worldwide economic downturn.
Tensions between the two sides have steadily ratcheted up since Trump's inauguration in January, intensifying after his 2 April 'Liberation Day' announcement of sweeping tariffs and Beijing retaliating with equally hefty tariffs on US goods.
China's blue-chip CSI300 Index dropped sharply the week after those tariff announcements, but has since recovered. It is now nearly back around the 2 April level.
The Hong Kong benchmark Hang Seng is down 0.3 percent since 2 April. The yuan has benefited from the capital flight from US markets and dollar assets, and is up 0.4 percent since early April.
Leading gains on Monday, the CSI Defence Index surged 5 percent and the info tech sub-sector index jumped 0.9 percent.
In Hong Kong, the Hang Seng Tech Index advanced 1.9 percent and Hang Seng Automobile Index gained 2.1 percent.
- Reuters
