Hong Kong stocks slip as US trade deals signal hurdles for China’s offshore shipments
Latest trade deal with Vietnam suggests the US is targeting Chinese supply chains around the region
The Hang Seng Index dropped 0.6 per cent to 24,069.94 on Thursday, erasing most of the gain on Wednesday. The Hang Seng Tech Index slipped 0.7 per cent. On the mainland, the Shanghai Composite Index advanced 0.2 per cent and the CSI 300 Index rose 0.6 per cent.
Smartphone and car maker Xiaomi slumped 3.4 per cent to HK$58.10 while WeChat operator Tencent lost 0.1 per cent to HK$501. E-commerce leader Alibaba Group slid 2.9 per cent to HK$106.20 after it announced a big subsidy programme to boost user and merchant incentives, escalating competition with JD.com and Meituan. JD.com dropped 2.1 per cent to HK$125.30, while Meituan slipped 2.5 per cent to HK$122.80.
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“It negatively affects China’s exports, forcing Chinese firms to relocate factories overseas, if other deals follows this mode,” said Gary Ng, a senior economist at Natixis Corporate and Investment Bank. “The impact will also depend on the definition of transshipment and the tolerance for ‘made-in-China’ inputs, which is unclear for now.”
The Trump administration’s tiered approach was also evident in the agreements with Canada and Mexico, a move that could hurt US-bound Chinese goods – mainly assembly parts – produced in offshore manufacturing bases to overcome punitive tariffs on direct exports from China.
Elsewhere, Cloudbreak Pharma slumped 39 per cent to HK$6.20 on the company’s trading debut.
Most major Asian markets traded higher. Japan’s Nikkei 225 added 0.1 per cent and South Korea’s Kospi rose 1.3 per cent, while Australia’s S&P/ASX 200 was little changed.