After the stock exchanges in China and Hong Kong were closed on Friday due to a holiday, things went steeply down there on Monday. The investors there were only now able to react to the Chinese counter -tariffs and did this with strong sales. Shares of Chinese electric carmakers broke down drastically.
• Asian stocks react violently to the expansion of the trade conflict
• Papers of electric car farmers under great pressure
• Probably help from Beijing
At the beginning of the week, the courses in China and Hong Kong were under massive pressure. After the customs shock triggered by US President Donald Trump, who had the courses in Asia sagged last Thursday, investors were now reacting to the countermeasures from Beijing. These were only announced on Friday after the regular trading hours in Asia, but there was no trade due to the Dead Memoral Day in Hong Kong and China.
Customs conflict becomes a trade war
Trump had introduced flat -rate tariffs of ten percent on imports from all countries last week. In addition, there should be other individual criminal levies that vary depending on the country from April 9th. New tariffs of 34 percent apply to China. China, on the other hand, fought back on Friday by announcing the country to US imports of 34 percent, which should apply from April 10th. In addition, Beijing has put eleven American companies on a black list and imposed export controls for several rare earths to the United States. The trade conflict is now pussy faster and stronger than expected.
Chinese e-car manufacturer under pressure
As the “Volkszeitung”, the mouthpiece of the China Communist Party, wrote “Dpa-Afx”, the new tariffs would dampen bilateral trade and could put Chinese exports under pressure. Furthermore, there was talk of an additional “economic downward pressure”.
How concerned the investors are in view of this situation was also clearly evident in the course development of the shares of the shares of Chinese electric carmakers on Monday. The shares of the Tesla rival BYD in Hong Kong lost 15.9 percent to 315.20 HKD. For Xiaomi shares, 20.59 percent also went down to 36.45 HKD, while Xpeng papers ultimately drop out by 20.29 percent to 65 HKD and LI auto shares 17.40 percent to 80.10 HKD. Already on Thursday, these papers had mostly reacted to Donald Trump’s customs hammer, now the descent accelerated again.
Chinese government is likely to intervene
According to the Chinese investment bank CICC, the new tariff China’s economy would inevitably face challenges. However, the conditions for the Chinese stock market are cheaper compared to 2018 or the past three years, “Cnevpost” quotes the experts. According to CICC, the medium -term development of the Chinese market is determined by the domestic economic fundamental data and the political reactions.
As the Chinese “Volkszeitung” “according to” dpa-Afx “writes, it is likely that the government in Beijing will get help for the Chinese economy. Another key interest rate, special loan or more scope for expansion of the budget deficit would be possible. Effective political steps would be taken to stabilize the capital market and restore the trust of the markets, it said. China has been in the trade war with the United States for eight years and has gained extensive experience. “Dow Jones” from the article quotes “extraordinary efforts” to promote domestic consumption and take concrete measures to stabilize the capital markets. At the moment, however, these vague promises cannot yet ensure confidence among investors.
Editor finance.net
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