Trade War Pours Cold Water on 'DeepSeek Rally'... Chinese Stock Market Under Dark Clouds
Summary
- The report stated that the Chinese stock market's upward trend due to 'DeepSeek' is being broken by the US-China tariff war.
- It revealed that the Chinese stock market is showing a downward trend due to President Trump's declaration of an additional 10% tariff.
- The report indicated that global investment funds are leaving China due to US-China trade tensions, and the Chinese government is planning to secure a 5% economic growth rate and implement retaliatory measures.
Dark clouds have once again gathered over the Chinese stock market. While it had been rallying this year due to the 'cost-effective AI DeepSeek' effect, U.S. President Donald Trump has again pulled out the tariff card against China.
In particular, President Trump has decided to impose an additional 10% tariff on March 4, when China's largest annual political event, the Two Sessions (National People's Congress and Chinese People's Political Consultative Conference), begins. As the trade war intensifies, investor sentiment that had barely recovered is rapidly shrinking.
On February 28, the Shanghai Composite Index closed at 3320.9, down 1.98% from the previous trading day. The index fell a total of 1.72% over the past week. The CSI300 index, which consists of the top 300 stocks by market capitalization on the Shanghai and Shenzhen exchanges, also closed at 3,890.05, down 1.97% from the previous trading day.
Global investment funds that had been flocking to the Chinese AI industry with positive outlooks triggered by DeepSeek are now hastily exiting the Chinese stock market as the U.S.-China trade conflict openly intensifies.
In fact, China has warned of a major counterattack against the United States starting with the opening of the Two Sessions on March 4. This is evident from the Chinese Ministry of Commerce's strong stance that "if the United States pushes to the end, we will take all necessary countermeasures."
Market participants expect that while the Chinese government must secure a 5% economic growth rate this year, it will take an aggressive stance on retaliatory measures against the United States and policies to protect domestic industries.
Meanwhile, China's trade balance for February will be announced on March 8. Recently, China's export growth rate has exceeded market expectations. This is largely due to rushed exports before tariffs increase further. Additionally, with the Chinese yuan weakening, China's global market share is trending upward.
Beijing=Kim Eun-jung, Correspondent kej@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
