This year’s intense rally in Chinese stocks will not change course in spite of concerns about a revived trade war between the world’s two largest economies, according to Soochow Securities.
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The foundation of this round of the global bull market is a weakening US dollar, said Chen Li, CEO and chief global economist at Soochow Securities (Hong Kong), on the sidelines of the firm’s third capital market strategy meeting in Hong Kong on Monday.
Chen’s assessment comes as Chinese stocks slumped on Monday amid a wave of sell-offs triggered by US President Donald Trump’s threat to impose an additional 100 per cent tariff on all Chinese imports and restrict exports of critical software from November 1.
Market jitters continued to be driven by concerns over America’s fiscal policy, the global economic outlook, policy instability under President Trump and ongoing domestic political conflicts, according to Chen. “None of these factors have disappeared.”
He said heightened trade tensions triggered a correction, but it would not have a huge impact on the market.
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“We’ve seen [potential] tariffs of 245 per cent, 100 per cent … So what?” Chen said, adding that investors “have become immune” to the prospects of higher duties.
