China stocks stayed nearly unchanged on Thursday, while Hong Kong shares slipped. The early optimism from U.S.-China trade talks faded quickly after key issues remained unresolved.
U.S. President Donald Trump announced that the two sides had reached a “framework” deal. China would lift export bans on rare earth minerals, and the U.S. would allow Chinese students back into its universities. But with no written details and no clear timeline, investors weren’t buying it—literally.
What Does This Mean for Regular Investors?
In simple terms: the stock market had a “meh” reaction. China’s blue-chip CSI 300 Index recovered from a 0.6% fall to close flat—up just 0.03%. That’s barely a heartbeat. The Hang Seng Index in Hong Kong dropped 0.5% after hitting a near three-month high the day before.
This means everyday investors are holding back. They don’t trust the trade truce just yet—and honestly, who can blame them?
Tariffs Still There, Tech Still Targeted
Despite talk of a “breakthrough,” tariffs on 55% of Chinese imports are still in place, according to U.S. Commerce Secretary Howard Lutnick. Tech restrictions? Not even mentioned.
That hit tech stocks hard. In Hong Kong, Alibaba dropped 2%, Xpeng sank 5%, and SMIC, a major chipmaker, lost 1.7%. In China, the CSI Semiconductor Index fell 1.1%.
As Jason Chan of Bank of East Asia put it:
“It’s disappointing that tariffs weren’t lowered. And there’s nothing on tech export bans.”
Translation: it’s like calling off a war but keeping the soldiers in place.
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Rare Earths: A Tiny Bright Spot
There was one small win. The CSI Rare Earth Index rose 0.4% after dropping earlier in the day. That reflects hopes that China’s move to resume exports of these minerals could help the sector.
Still, the boost was modest. Investors want more than vague promises—they want clear, actionable policy. You can’t invest on vibes alone.
Bigger Picture: Confidence Is the Real Issue
Markets have been shaky since Trump’s April 2 tariff announcement. China’s CSI 300 has barely moved since then. The Hang Seng has gained around 4%, still underperforming global peers like the MSCI World Index, which is up 10%.
Wang Zhuo, a partner at Zhuozhu Investment, summed it up well:
“Investors are shifting away from trade headlines. They’re watching economic fundamentals now.”
In other words, it’s no longer about what Trump or Beijing say—it’s about what factories, consumers, and inflation do.
Final Thought
The deal may be back “on track,” but without lowering tariffs or lifting tech bans, it’s just smoke and mirrors. Investors see through it. China’s market needs more than press releases. It needs real action.
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