US tariffs escalate global trade war | China sets 5% GDP growth target | HKEX hits record profits after China stimulus
All eyes are on China this week as US president Donald Trump's new tariffs take effect against the backdrop of China’s annual National People’s Congress. On Tuesday, the US imposed 25% duties on most Canadian and Mexican imports and raised the charge on China to 20%, spurring swift retaliatory measures and further raising tensions in global trade relations.
As China battles with this intensifying trade war and sluggish domestic demand, the world's second-largest economy set its 2025 GDP growth target at "around 5%" at the National People's Congress that kicked off on Wednesday. Meanwhile, China M&A is projected to rebound this year, fuelled by the sudden rise of AI start-up DeepSeek, which is helping to drive more deals in the tech sector. However, China’s securities regulator has clamped down on small company listings on New York stock exchanges, arguing many of them were used for price manipulation, leading to significant losses for investors.
Hong Kong’s stock exchange operator announced record profits for 2024, marking the end of a two-year slump thanks to a market rally and a surge in new listings. As part of China’s broader strategy to reduce reliance on Western financial systems, Hong Kong is developing an Asian international settlement house that could rival Belgium’s Euroclear and Clearstream of Luxembourg.
Meanwhile in India the equity market suffered another bleak milestone with the benchmark index sinking for a record 10th consecutive day, amid continued selling by overseas investors.
We’re also reading:
Trump escalates global trade war, sparking tit-for-tat tariffs
President Donald Trump's new US tariffs — 25% duties on most Canadian and Mexican imports and raising the charge on China to 20% — took effect on Tuesday, spurring swift reprisals that plunged the global economy into a deepening trade war. Canada hit back with phased levies on $107 billion of US goods while China imposed tariffs as high as 15%, mainly on American agricultural shipments. Mexican president Claudia Sheinbaum said Tuesday her government would announce tariffs and other measures on Sunday in response to Trump’s new charges.
China sets GDP growth target at 'around 5%' amid rising trade war
China set its 2025 gross domestic product growth target at "around 5%" as the annual National People's Congress kicked off on Wednesday. The world's second-largest economy is battling an intensifying trade war with the US and weak domestic demand. The goal was unveiled in the "government work report" that Premier Li Qiang at the start of China's weeklong sitting of the top legislative body. China fixed its budget deficit target at 4% of GDP, higher than last year's 3%, indicating a commitment to expansionary spending to shore up growth. The inflation target will be lowered to 2%, from 3%, indicating persistent deflationary pressure on the economy.
China M&A deals set to rebound from decade-low as DeepSeek, AI fuel interest
Mergers and acquisitions (M&A) in China are projected to rebound this year from a 10-year low as the sudden rise of start-up DeepSeek propels more deals in the technology sector, bankers and analysts said. The catalysts could come from demand for overseas investments by Chinese companies, exits by private equity funds and restructuring involving Chinese state-owned enterprises, they said. In recent months, Beijing has pushed the nation’s brokerage industry to consolidate, leading to several large-sized mergers. Despite a drop in value, M&A transactions had been growing steadily over the past two years, PwC said.
Recommended by LinkedIn
China puts brakes on US stock listings for homegrown companies
China’s securities regulator has clamped down on small companies’ listings on New York stock exchanges after many of them became vehicles for price-rigging, causing heavy losses for US investors. The rate of China-approved applications for US initial public offerings has slowed noticeably in the past year, falling from 22 in the first half of 2024 to 11 since June. Four people close to the China Securities Regulatory Commission (CSRC) said it intended to impose “tighter control” this year over US IPOs of Chinese companies with small capitalisation and weak fundamentals, viewing them as prone to market manipulation. The CSRC was concerned about whether the small-cap companies listed in the US truly need to raise funds.
Hong Kong stock exchange posts record profits after China stimulus
Hong Kong’s stock exchange operator made record profits in 2024 as a stock market rally and listings revival helped put an end to a two-year slump for the financial hub. Hong Kong Exchanges and Clearing reported full-year profits of HK$13.1bn (US$1.7bn) on Thursday, topping the previous record of HK$12.5bn set in 2021 amid a pandemic-era trading boom. The results were boosted by a rise in the average daily turnover of securities traded on the exchange — a key revenue driver for the company — as investors returned to Hong Kong stocks after Beijing announced a series of stimulus measures last autumn.
Hong Kong targets creation of rival to Euroclear
Hong Kong Exchanges and Clearing, which runs the stock market, said on Tuesday it was working with the territory’s monetary authority to develop an Asian international settlement house that could rival Belgium’s Euroclear and Clearstream of Luxembourg. China has sought to reduce its dependency on western financial systems amid growing geopolitical tensions and comes as Europe moves to seize €200bn of frozen Russian assets. HKEX and the Hong Kong Monetary Authority said the venture would provide a platform for Beijing’s ambition to “internationalise” the renminbi, by deepening the use of the currency as a global reserve asset and for settling trades.
Indian stocks face historic losing streak as foreigners flee
The NSE Nifty 50 Index fell 0.2% on Tuesday, extending a drop from the September peak to 16%. Global funds have led the selloff, pulling nearly $14 billion this year, driven by concerns about slowing economic growth and relatively high valuations. The shift in sentiment for Indian equities has been swift, considering that the South Asian nation was a favourite among most emerging-market fund managers as recently as September. Despite recent government measures to boost consumption and oversold technical indicators, weak corporate earnings and elevated valuation premium have seen India fall out of favour with fund managers.