Unsurprisingly, Hong Kong stocks gave back nearly half of the massive gains logged on Friday, when shares rose the most in seven years on rumors that the Trump administration was busy drafting a trade truce to present to Xi Jinping at the G-20.
The Hang Seng dropped 2.1% to start the week, its worst day since October 23.
H-shares fell 1.3% on the day.
On the mainland, the CSI 300 fell 0.8%, while the SHCOMP shed a half a percent. The ChiNext outperformed, logging a small gain on a day with Xi Jinping talked up innovation and tipped plans to establish a new trading platform for high-tech companies.
In his hotly anticipated speech at the Shanghai trade fair, Xi stuck to the usual talking points when it comes to Beijing’s commitment to “opening up”. As is customary, critics were quick to point out that everyone has heard this before and that China needs to accelerate the process if they intend to convince anyone. Xi also committed to slashing import tariffs further and talked up the “Belt and Road” initiative.
It’s true that all of that is par for the course and that there was little “new” in Xi’s speech in terms of concrete initiatives. But frankly, if that’s what you were expecting (i.e., if you were expecting Xi to walk up to the podium and launch into a detailed list of firm commitments complete with implementation dates), then I’m not sure you’ve been paying attention.
For what it’s worth, here’s a table from Barclays that documents what the Chinese President has said over the past week:
More important than the obligatory and purposefully nebulous nods to continued “opening up”, was Xi’s reiteration of China as the guardian of globalization in a world where the U.S. is abdicating that responsibility in favor of a inward-looking, xenophobic populism.
“As globalization deepens, the practices of law of the jungle and winner take all are a dead end,” Xi said, a clear jab at Trump. “[Countries] shouldn’t always whitewash themselves and blame others, or act like a flashlight that only exposes others, but not themselves”, he added.
What’s highly amusing here is that the harder Trump pushes, the more likely it is that the world is going to turn to China when it comes to leading the way forward on multilateralism and, in an irony of ironies, progressivism.
These are the kind of patently absurd outcomes you get when you let an unhinged political neophyte whose life is a case study in narcissism, jingoism, greed, selfishness and bumbling idiocy be President of the United States. You end up giving an authoritarian (Xi) an opportunity to cast himself as a beacon of hope and a bastion of sanity and tolerance. That, despite Xi’s less-than-exemplary record on human rights and clear penchant for repressive tactics.
Just hours ahead of Xi’s speech, whilst shrieking in the general direction of rednecks in Tennessee on Sunday night, Trump said this:
We’ve taken the toughest-ever action to crack down on China’s abusive trade practices. We’re doing very well.
No, you’re really not.