Chinese Stocks Drop as Investors Remain Cautious Before US Talks

Chinese stocks experienced a slight decline as investors adopted a cautious stance ahead of the much-anticipated weekend trade talks between the world’s two largest economies.

The onshore benchmark CSI 300 Index finished Friday’s morning session down by 0.2%, while a gauge of Chinese firms listed in Hong Kong slid 0.3%. Despite this downturn, both indexes are still close to offsetting the losses incurred since President Donald Trump announced tariffs as high as 145% on Chinese goods last month.

The cautious atmosphere is fueled by Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer gearing up to meet with Chinese Vice Premier He Lifeng in Switzerland for trade negotiations this weekend. Trump noted that should discussions proceed favorably, he might consider reducing the tariffs on China.

While these talks aim to ease the tariff dispute, expectations for a swift resolution remain low. In another sign of persistent investor unease, markets largely overlooked recent data showing unexpected export growth in China for April, despite Trump’s tariffs.

“China still confronts significant uncertainty regarding an agreement with the US, and the long-awaited stimulus has been limited thus far,” remarked Patrick Pan, equity strategist at Daiwa Capital Markets Hong Kong, adding that even if the CSI 300 rebounds later, “I won’t be overly optimistic due to ongoing concerns.”

The onshore benchmark had risen in the last three sessions, supported by stimulus measures from Chinese authorities, including interest rate cuts and a reduction in banks’ reserve requirement ratios.

© 2025 Bloomberg

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