Chinese stocks climb on tech self-reliance push, Xi-Trump meet

Chinese stocks advanced as renewed emphasis on technological self-reliance at a key political gathering and confirmation of the US-China summit supported sentiment.Benchmarks for Chinese shares in Hong Kong and on the mainland were both up about 0.5% as of 10:28 a.m. local time. Gains were more pronounced in tech-focused gauges, with the ChiNext Index rising as much as 2.2% and the STAR 50 Index rallying more than 3%.

China said it aims to “greatly increase” the capacity for self-reliance and strength in science and technology in the next five years, according to a communique released Thursday after a four-day conclave of the Communist Party’s Central Committee. It will also seek to maintain manufacturing’s share in the economy at a “reasonable” level as part of efforts to build a modern industrial system.

Optimism is also rising ahead of the meeting between President Donald Trump and President Xi Jinping next week on the sidelines of the Asia-Pacific Economic Cooperation summit. “I think we’re going to come out very well and everyone’s going to be very happy,” Trump said Thursday regarding his sit-down with Xi.
“The plenum confirms the market expectations of the next five years, and the recent signs of de-escalation from both sides is supporting risk sentiment,” said Hao Hong, chief investment officer at Lotus Asset Management in Hong Kong. “I was expecting a bit more discussion on how best to boost income and consumption, but the market will still go up, he added.Friday’s advance suggests the policy readout gave confidence to some investors on Beijing’s ability to further elevate the tech industry and turn around tepid consumption. Chinese equities have staged a strong rally this year, with enthusiasm over the country’s advances in artificial intelligence outweighing concerns over trade tensions with the US.

Some of the best performers on Friday included shares related to the chip and AI sectors. GigaDevice Semiconductor Inc. and Luxshare Precision Industry Co. were both up more than 5% at their session highs. Hua Hong Semiconductor Ltd. shares jumped 12% in Hong Kong.

The readout’s mention of modernising the military and enhancing capability to safeguard sovereignty also added momentum to defence stocks. Anhui Great Wall Military Industry Co. shares gained more than 7%.

A lack of meaningful tariff adjustment in the Xi-Trump talks, however, may quickly hurt sentiment given the pace of the rally so far. The CSI 300 Index has wavered since gaining about 30% from an April low through the early-October peak.

Read Also: Here’s why these three Aluminium-linked stocks are in focus on Friday