Shanghai Stock Market, China Confronts the US... Expected to Pour Out Stock Market Stimulus Measures

Despite the intensifying US-China tariff war, the Chinese stock market continued its upward trend. Even though the cumulative US tariff rate on China rose to a total of 145%, and China retaliated with a high tariff of 125%, investors seem to place more hope on the Chinese government's stock market stimulus measures.

On the 11th, the Shanghai Composite Index closed at 3238.23, up 0.45% from the previous trading day. The Shanghai Composite Index has risen for four consecutive trading days since the 8th, following Black Monday on the 7th, when fears that the US would fall into a recession due to the tariff war engulfed Asian stock markets. The increase over the past week since Black Monday is 4.57%.

Investors are concerned about the negative impact of the tariff war but are paying more attention to the Chinese authorities' stock market stimulus measures and market support actions.

More than 100 listed companies, including PetroChina, a Chinese state-owned oil and gas company, Midea, an appliance manufacturer, and CATL, a battery manufacturer, announced plans to buy back their shares at the height of the US-China tariff war. Previously, Chinese sovereign wealth funds announced plans to increase their holdings of exchange-traded funds (ETFs). Investors expect that although China is a major target of the US tariff bombardment, Chinese companies' share buybacks, the authorities' reinforcement of fiscal and monetary policy easing, and economic stimulus measures will support the Chinese stock market. Experts also predict that China will introduce additional consumption stimulus measures, such as lowering the reserve requirement ratio, cutting interest rates, and resuming bond purchases by the central bank.

On the 14th, China's new loans and loan balances for March will be announced. On the 16th, the 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 core export sector has been shaken by the tariff war.

Beijing = Kim Eun-jung, Correspondent kej@hankyung.com