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China and Hong Kong stocks firmed on Tuesday, as Chinese President Xi Jinping’s vow to further open up the economy in a speech at the Boao forum eased worries over rising trade tensions between the world's largest economies.
On the mainland, the Shanghai Composite index was up 0.5 per cent at 3,154.26, while China's blue-chip CSI300 index was up 0.7 per cent at 3,879.50. Chinese H-shares listed in Hong Kong rose 1.4 per cent to 12,236.79, while the Hang Seng Index was up 1.1 per cent at 30,574.45.
President Xi on Tuesday promised to further liberalise the economy and lower the import tariffs on products, including cars, in a speech that struck a conciliatory tone on trade tensions between China and the United States.
Xi also said China would raise the foreign ownership limit in the automobile sector as soon as possible and push previously announced measures to open the financial sector.
Automakers rallied on the mainland after Xi's pledge to open up the sector. His comments follow a week of escalating tariff threats sparked by US frustration with China's trade and intellectual property policies.
“With his speech, Xi is offering a solution to the Sino-U.S. trade dispute,” said Yang Hai, strategist at Kaiyuan Securities, referring to the pledge to open up Chinese markets, including financial and auto sectors, while demanding fewer restrictions on Chinese purchases of high-tech products.
“Xi's waving an olive branch to the U.S., and the market is now waiting to see how the U.S. side will play the card in response,” Yang, based in Shaanxi province, added.
Yang's view was echoed by David Qu, China markets economist at ANZ in Shanghai, who said Xi's speech could help lower the temperature of the “trade war”.
China’s stocks are among fund managers' top picks for 2018 as they bet the United States and China will avert a full-blown and potentially costly trade war.
Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.78 per cent, while Japan's Nikkei index was up 0.59 per cent. The yuan was quoted at 6.297 per US dollar, 0.25 per cent firmer than the previous close of 6.3126.
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