Chinese stocks went up, and the yuan strengthened on Monday after positive signs came from trade talks between China and the U.S. over the weekend. U.S. Treasury Secretary Scott Bessent and top trade negotiator Jamieson Greer met with senior Chinese officials, led by Vice Premier He Lifeng, in Geneva, Switzerland. After the talks, both sides sounded optimistic, and the market is waiting to hear more details about any potential agreements later in the day.
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By midday, China’s blue-chip CSI 300 Index was up 0.6%, while the Shanghai Composite Index rose by 0.4%. In Hong Kong, the Hang Seng Index climbed 0.9%. The yuan gained 0.2% against the dollar, while its offshore version rose by about 0.3%.
Charles Wang, Chairman of Shenzhen Dragon Pacific Capital Management, said the talks were better than expected, adding that both sides have strong reasons to continue the discussions. However, he noted that the process will take time as both sides need to decide where they can compromise and where they will stand firm.
Before the talks, U.S. President Donald Trump suggested that tariffs on China might be reduced from 145% to around 80%, which he thought was a reasonable number. China has been at the center of Trump’s global trade war, which has caused financial market instability, disrupted supply chains, and raised concerns about a potential worldwide economic downturn.
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Tensions between the two countries have been rising since Trump became president, especially after his announcement in April to impose large tariffs, followed by China retaliating with similar measures. Since then, China’s CSI300 Index has recovered and is almost back to its level from April. Meanwhile, Hong Kong’s Hang Seng Index has dropped slightly since then. The yuan has also gained 0.4% since early April, partly due to a shift in investments from U.S. markets.
On Monday, some sectors saw big gains, including the CSI Defence Index, which jumped 5%, and the technology sector, which rose 0.9%. In Hong Kong, the Hang Seng Tech Index increased by 1.9%, and the Hang Seng Automobile Index rose by 2.1%.
