By JIAXING LI
SHANGHAI/HONG KONG- China’s markets return from a week’s break on Wednesday to a fresh trade dispute with the United States and ructions in the global artificial intelligence sector. Investors said they are watching for what Beijing would do to bolster confidence.
The early signs point to a measured open for stock markets on the Mainland. Tariffs so far have been less than what the Trump administration had initially indicated and relief was evident in Hong Kong, where Chinese stocks rallied this week. Enthusiasm around China’s artificial intelligence company DeepSeek is also likely to bolster AI stocks.
Still, investors will look for signals from Beijing on how it sets the tone for things to come.
One of the first such signals would come on Wednesday from where the central bank fixes the yuan the midpoint in the trading band within which it allows the currency to trade on any given day, analysts said.
Yuan’s weakness helped blunt the impact of tariffs in US President Donald Trump’s first term as president, and the fix could hold clues to China’s negotiating stance on tariffs.
Mainland stock markets are also likely to take their cue from Hong Kong, which opened two days earlier after the Chinese New Year holiday. Chinese stocks there rose strongly on Tuesday, despite a move by the Trump administration to impose 10 percent tariffs on Chinese imports.
Much has happened during China’s week-long Lunar New Year holiday. Over the weekend, Trump imposed levies on goods from China, a move that prompted Beijing to announce targeted tariffs on US imports and put several companies, including Google, on notice for possible sanctions.
Trump’s actions, which also included duties on Mexico and Canada, jolted global markets. The tariffs came as the world of artificial intelligence — another major driver for global stocks over the past year — was roiled when China’s DeepSeek unveiled a cheaper AI model just a day before China went on break. That triggered a selloff across technology stocks as investors reassessed the sector’s value.
Even so, there was some relief for markets, too. Although he described the initial tranche of tariffs on China as an “opening salvo,” they were lower than what Trump has threatened in the past. And the president also gave reprieve to two other trading partners – Canada and Mexico – leading investors to believe that China could strike a deal as well. — Reuters
