'Trump must be fuming'... Why China is smiling amid escalating tariff war

The US-China tariff war is intensifying day by day, but the Chinese stock market continues to rise. Although the cumulative US tariff rate on China has been recalculated to reach a total of 145%, and China has retaliated with a high tariff of 125%, investors seem more hopeful about the Chinese government's stock market stimulus measures.

On the 11th, the Shanghai Composite Index closed at 3,238.23, up 0.45% from the previous trading day. The Shanghai Composite Index has risen for four consecutive trading days since the so-called Black Monday on the 7th, when fears of a US recession due to the tariff war engulfed Asian markets. The increase over the past week since Black Monday alone reached 4.57%.

On the same day, the CSI300 Index, composed of large-cap stocks from the Shanghai and Shenzhen markets, also closed up 0.41% at 3750.52. While investors are concerned about the negative impact of the tariff war, they are more interested in the Chinese authorities' stock market stimulus measures and market support actions. As Chinese companies join the government in defending stock prices, investors are also participating in the buying trend.

More than 100 listed companies, including China's state-owned oil and gas company PetroChina, home appliance maker Midea, and battery manufacturer CATL, announced plans to buy back their shares at the height of the US-China tariff war. Previously, China's sovereign wealth funds had announced plans to increase their holdings of exchange-traded funds (ETFs).

Investors expect that although China has become a major target of the US tariff blitz, corporate share buybacks, and the government's fiscal and monetary policy easing, and economic stimulus measures will support the Chinese stock market. Experts also predict that China will introduce additional consumption-boosting measures such as lowering the reserve requirement ratio, cutting interest rates, resuming central bank bond purchases, and providing childbirth and child subsidies.

Meanwhile, on the 14th, China's new loans and loan balance growth for March will be announced. On the 16th, China's GDP growth rate for the first quarter will be released. With domestic demand sluggish for a long time, the market's attention is focused on how much China's key economic pillar, exports, have been shaken by the tariff war. On the same day, China's March industrial production, retail sales, and unemployment rate will also be announced.

Beijing Correspondent Kim Eun-jung kej@hankyung.com