BEIJING: While the Chinese stock market was not immune from Monday’s global stock market meltdown after the United States announced wide-ranging tariffs, the A-share market will likely gain continued favor from investors, as China has plenty of policy room in the midterm to long run and its economy is resilient enough to offset the impact of the sweeping tariffs, said experts.
Although the benchmark Shanghai Composite Index and Shenzhen Component Index were down by 7.34 percent and 9.66 percent respectively on Monday, action was taken immediately. Central Huijin Investment, an arm of China’s sovereign wealth fund, said during the late trading hours on Monday that it had increased its holdings in exchange-traded funds.
Fully acknowledging the A-share market’s current investment value, Central Huijin said it would increase its exposure and firmly safeguard the stable operation of the capital market.
A sell-off swept the global market after US President Donald Trump signed an executive order on Wednesday to impose a 10 percent baseline tariff on all imports to the United States. The policy includes tariffs as high as 34 percent on imports from China and 20 percent from the European Union.
Japan’s Nikkei 225 closed 7.83 percent lower on Monday, while Hong Kong’s Hang Seng Index slumped 13.22 percent.
The pan-European STOXX 600 was 6 percent lower shortly after the opening bell, and Germany’s DAX index was more than 9.5 percent lower during early deals.
The US stock market also fell victim to the country’s tariff regime. The Nasdaq plunged 5.8 percent on Friday to end the week by losing over 10 percent, signaling the entry of a bear market for the first time since 2022, according to Dow Jones Market Data. The S&P 500 nosedived 9.08 percent over the past week, while the Dow Jones slumped 7.86 percent, with both reporting their biggest weekly losses since March 2020.
Zhang Bin, deputy director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said that the latest US tariff policies are “unprecedented” for this generation. Bringing harm both to the US and other economies, the chain effects are hard to predict. Under such circumstances, it is also difficult to foresee the bottom of the US economy and its capital market. –The Daily Mail-China Daily news exchange item
