China stocks close lower after US tariffs

SHANGHAI: Mainland China shares ended lower on Wednesday, pressured by U.S. President Joe Biden’s decision to levy fresh tariffs on Chinese goods.

U.S. President Biden on Tuesday unveiled steep tariff increases on an array of Chinese imports, including electric vehicle (EV) batteries, computer chips and medical products, risking an election-year standoff with Beijing as he woos American voters who give his economic policies low marks.

The tariffs are considered as a fresh sign of escalations in Sino-U.S. relations, which have long been one of the key factors influencing Chinese financial markets.

“We are more concerned China may face similar trade-restrictive measures from other regions,” analysts at Nomura said in a note.

“The EU and UK account for about 40% of China’s EV exports in 2023, the EV sector may face increased pressure if Europe follows the U.S. and imposes high punitive tariffs on Chinese EVs.”

At the close, the Shanghai Composite index was down 0.82% at 3,119.90.

The blue-chip CSI300 index was down 0.85%, with the real estate index up 2.21%.

Property shares outperformed the market after Bloomberg reported, citing unnamed sources, that China is considering a proposal to have local governments across the country buy millions of unsold homes, an attempt to rescue the property market.

The market did not react much to China’s central bank’s decision to leave a key policy rate unchanged while rolling over maturing medium-term lending facility (MLF) loans on Wednesday, in line with market expectations.

Around the region, the MSCI’s Asia ex-Japan stock index was firmer by 0.51%, while Japan’s Nikkei index closed up 0.08%.

At 0704 GMT, the yuan was quoted at 7.2237 per U.S. dollar, 0.13% firmer than the previous close of 7.233.

Markets in Hong Kong are closed on Wednesday for a public holiday. – Reuters