China, Hong Kong shares rise as Beijing's efforts to curb price wars lift sentiment
China's blue-chip CSI300 Index climbed 0.7 per cent by the lunch break, while the Shanghai Composite Index gained 0.6 per cent. Hong Kong benchmark Hang Seng was up 0.8 per cent.
Market reaction in Asia was rather muted after US President Donald Trump on Monday began telling trade partners - from powerhouse suppliers like Japan and South Korea to minor players - that sharply higher US tariffs will start August 1, marking a new phase in the trade war he launched earlier this year.
China's top leaders pledged last week to step up regulation of aggressive price-cutting by Chinese companies, as the world's second-biggest economy struggles to shake off persistent deflationary pressures.
Shares of solar manufacturers led gains onshore, with Tongwei up 10 per cent, after China's industry ministry pledged to curb disorderly low-price competition in the photovoltaic industry.
Deeper policy efforts to curb excessive competition are expected to help rebalance industrial supply and demand, support a rebound in producer prices, and improve long-term earnings expectations for A-shares, analysts at Huaxi Securities said in a note.
Semiconductor shares also rose, up 1.1 per cent, as a slew of companies posted upbeat profit alerts.
Consumer-related shares climbed in Hong Kong, as subsidies from food delivery platforms boosted consumer demand. Xiabuxiabu, a hotpot restaurant, rose nearly 7 per cent.
Hang Seng Tech Index was up 1.3 per cent.
Traders are watching for China's key inflation data due on Wednesday to gauge the health of the world's second-largest economy in the face of persistent deflation pressure and trade risks.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
an hour ago
- New Straits Times
Easing foreign equity caps may boost FDI but raises sovereignty risks, say economists
KUALA LUMPUR: Easing foreign equity limits in strategic sectors may unlock fresh foreign direct investment (FDI) inflows into Malaysia but also pose structural and sovereignty-related risks, economists said. Malaysia has gradually liberalised its foreign equity rules including allowing up to 100 per cent ownership in the manufacturing sector since 2009. The country, however, still imposes significant limits in sectors like telecoms, finance, insurance, agriculture, property and healthcare. Investment, Trade and Industry Ministry last week reportedly said it was in talks with regulators and key industries about relaxing foreign ownership limits as part of efforts to reduce the 25 per cent US tariff on Malaysian goods. UCSI University Malaysia associate professor in finance and research fellow at Centre for Market Education Dr Liew Chee Yoong said the economic and structural impacts would likely be multifaceted. Liew said relaxing equity limits in Malaysia could potentially boost FDI inflows by 15-25 per cent in selected sectors, offering much-needed capital for infrastructure upgrades and technological progress. "This could facilitate valuable knowledge transfer, particularly in areas like 5G deployment, financial technology and cloud infrastructure," he told Business Times. Greater competition from foreign players could spur innovation and may lead to more competitive pricing for consumers, he added. "Strengthening linkages with global corporations might also bolster Malaysia's position within international supply chains," he said. Liew said the push for Malaysia to ease the caps is driven by a combination of interrelated factors. "Primarily, the US seeks enhanced market access for its corporations, particularly large financial institutions, telecommunications providers and technology firms, enabling them to gain controlling stakes and greater operational influence within Malaysia's developing economy. "This push also aims to secure competitive parity for US companies against regional rivals, such as Singaporean or Chinese firms, which may operate under different frameworks or have established significant regional headquarters." He added that these kinds of requests are frequently used as bargaining tools in broader trade talks, such as under the Indo-Pacific Economic Framework, to gain certain advantages. From a geopolitical standpoint, strengthening economic ties through investment is a strategic move to offset China's growing influence in the region, he said. Balancing growth and sovereignty Liew said one of the main advantages from the possible relaxation is the substantial inflow of foreign capital, which plays a crucial role in enhancing national infrastructure and supporting the growth of high-value industries. He added that gaining access to advanced technologies and international best practices could boost productivity and competitiveness, create jobs in higher-value sectors, and deepen economic ties with key partners such as the US. "However, these advantages are counterbalanced by substantial risks. Foremost is the erosion of control over strategic national assets and key industries, raising sovereignty concerns. "Domestic firms, particularly small and medium enterprises and Bumiputera-owned companies, face the risk of marginalisation or acquisition," he added. Liew said the disruption to long-standing socio-economic policies designed to ensure equitable wealth distribution could have significant political and social repercussions. "Furthermore, substantial profit outflows from foreign-controlled entities could negatively impact Malaysia's foreign exchange reserves and current account stability over time," he added. Putra Business School associate professor Dr Ahmed Razman Abdul Latiff said Malaysia imposes equity restrictions to promote greater local participation in industries and to ensure that wealth distribution benefits local investors and, ultimately, the broader population. "Lifting up such restrictions is still doable as long as the initial objectives are maintained or strengthened. "Maybe no longer through equity participation but perhaps with higher technology transfer such as technical know-how and co-sharing of intellectual properties rights," he added. Razman said this approach helps accelerate innovation within local industries and enables the development of competitive homegrown products, which in turn supports the long-term sustainability of local businesses. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said opening up Malaysia's economic sectors to foreign investors must be done thoughtfully to safeguard local interests. "At the same time, we would also want our local companies to be able to compete effectively and be able to penetrate the overseas market," he said. Current landscape of foreign equity in Malaysia Afzanizam said as of June 2025, foreign ownership in Malaysian equities stood at 19 per cent, down from the historical peak of 25.1 per cent recorded in June 2013. This comes despite the market's appealing valuation, with the FTSE Bursa Malaysia KLCI trading at a price-to-earnings ratio of around 14 times, compared to the historical average of 17 times. "Among the criticisms is the liquidity of the stocks as the large companies, especially the government linked companies are being held by domestic institutions such as the government linked investment companies. "This has led to the amount of available stocks to invest is not economically viable for the foreign institution to invest from the liquidity stand point," Afzanizam told Business Times. Meanwhile, Liew said many service industries in Malaysia still face strict foreign ownership limits. For example, the telecommunications sector generally allows up to 49 per cent foreign ownership, while commercial banks are subject to a lower cap of 30 per cent. Investment and Islamic banking are typically limited to 49 per cent as well. "The insurance sector allows up to 70 per cent foreign ownership. Further limitations apply to agriculture and property, such as thresholds between 30 per cent and 50 per cent for agricultural land. "Crucially, the long-standing Bumiputera policy, mandating a 30 per cent equity share for Bumiputera interests, continues to influence ownership structures across various sectors," he shared. Key industries likely under review Afzanizam said Tengku Zafrul may have been referring to key sectors such as telecommunications and banking, given their significant role in Malaysia's economy. Sharing a similar view, Liew noted that the telecommunications sector is currently subject to a 49 per cent foreign ownership cap, which impacts major companies like Maxis Bhd and Axiata Group Bhd. He added that banking restrictions are even more pronounced, with commercial banking limited to 30 per cent foreign ownership and investment banking to 49 per cent. "Other sectors likely under discussion include professional services such as legal, accounting, and engineering firms, which often face limits between 30 per cent and 49 per cent; private healthcare, capped at 30 per cent; and potentially defence-related industries or critical transport infrastructure like ports and airports, deemed vital for national security and sovereignty," Liew said.
The Star
2 hours ago
- The Star
ECB holds fire amid Trump's tariff threat
FRANKFURT: The European Central Bank is likely to stare down the economic danger posed by US President Donald Trump's tariffs by opting to leave a potential cut in borrowing costs for another day. In their final decision before a seven-week summer break, policymakers on Thursday will probably keep the interest rate unchanged at 2%, pushing off a response to Trump's threatened tariffs of 30% until they materialise and their impact can be better assessed. With many officials likely to use the interlude for a long holiday, the temptation to restate that inflation is at target and to postpone worrying about the economic outlook until new quarterly forecasts are compiled for the Sept 10 to 11 meeting may seem appropriate. What policymakers do know, however, is that trouble is lurking. Aside from concerns about tariffs, the euro has strengthened, damping the outlook for prices and threatening to further squeeze exporters. Meanwhile, another political crisis in France may be brewing over its bloated public finances. Given that backdrop, the ECB Governing Council could acknowledge among themselves that the chance of another rate cut in September is growing, even if they stick with their well-worn 'meeting-by-meeting' approach to decision-making. In that vein, president Christine Lagarde, in her opening statement to reporters this Thursday, is likely to restate that risks to growth are 'tilted to the downside', Morgan Stanley economists wrote in a preview titled 'Ready for the Beach.' Bloomberg Economics senior euro-area economist David Powell said, 'We expect the Governing Council's language after the July 24 meeting to be similar to the wording in June, leaving open the possibility of additional cuts without committing to them.' Economic reports in the coming week will inform their deliberations. They include the ECB's own bank lending survey, due tomorrow; consumer confidence on Wednesday; and purchasing manager indexes from across the region and other major economies, set for release on Thursday, hours before the outcome of the ECB deliberations. Other key indicators, such as Germany's closely watched income from operations business confidence and Italian economic sentiment, will follow on Friday. Elsewhere, inflation numbers from Japan to Brazil and testimony by the UK central bank chief are among the things in store for investors. The US economic data calendar is relatively light and highlighted by a pair of housing market reports. On Wednesday, June data from the National Association of Realtors are projected to show a third month of scant change in sales of previously owned homes. Contract closings have been hovering near an annualised rate of four million, just above last year's level, which was the weakest since 2010. Meanwhile, economists expect a government report on Thursday to show new-home sales recovered a bit in June after posting the biggest monthly decline since 2022. The pace of contract signings on new houses has largely trended sideways for the better part of two years. The housing market has struggled to gain traction as elevated mortgage interest rates and affordability constraints keep many potential buyers sidelined. Other reports include Friday's release of June durable goods orders, preceded by S&P Global's July manufacturing and services surveys on Thursday. Fed policymakers are in a blackout period ahead of their July 29 to 30 meeting, although chair Jerome Powell tomorrow gives welcoming remarks at a conference focused on capital frameworks for large banks. Further north, the Bank of Canada's business and consumer surveys for the second quarter will offer fresh insight into inflation expectations and investment plans. Retail data for May and a flash estimate for June are likely to show slumping sales as consumers pull back after a tariff-driven rush to buy cars earlier in the year. Two fiscal monitors from the federal government may contain more details about retaliatory tariff revenues collected to date. Asia's data docket offers a broad cross-section of economic signals, from trade in South Korea to inflation indicators in Japan, Singapore and New Zealand. The figures will help clarify how the region's economies are responding to trade-related uncertainties. South Korea opens the week today with 20-day trade data, an early indicator for July exports. Next follows consumer confidence on Wednesday and retail sales during the week, offering a read on household conditions after the Bank of Korea held rates steady this month. Also on today, China will release loan prime rates, which are expected to be kept steady for a second month in July, taking a cue from the People's Bank of China. Australia takes the spotlight tomorrowwith minutes from the Reserve Bank of Australia's (RBA) July policy meeting, at which it shocked investors by keeping rates on hold at 3.85%. The minutes may offer a clearer sense of how close policymakers are to resuming their easing cycle. RBA governor Michele Bullock gives a speech on Thursday. Tomorrow, Taiwan is set to publish export orders for June, along with employment data. India's July purchasing managers' index (PMI), due Thursday, will indicate the resilience of both manufacturing and services activity. Japan closes out the week on Friday with a full slate of data, including Tokyo consumer price index, department store sales and factory activity. The inflation reading will offer an early steer on national price trends, while the other releases will help assess how well domestic demand and production are holding up. New Zealand reports second-quarter inflation today, while Singapore publishes its price gauges on Wednesday and industrial production data on Friday. Thailand has car sales and customs trade balance figures during the week. The United Kingdom will release public finance data tomorrow at a time when its economic woes and fiscal position are very much in focus. With unemployment at a four-year high and growth faltering, PMI numbers on Thursday and retail sales on Friday may also draw attention. Britain's exposure to market stress may be a topic when Bank of England governor Andrew Bailey and colleagues testify on financial stability to lawmakers tomorrow. — Bloomberg
The Sun
2 hours ago
- The Sun
Trump and Xi may meet before or during October APEC summit in South Korea
SEOUL: U.S. President Donald Trump may visit China before attending the Asia-Pacific Economic Cooperation (APEC) summit in October or meet Chinese leader Xi Jinping on the sidelines of the event in South Korea, according to a report by the South China Morning Post. The two leaders could discuss ongoing trade disputes, as both nations attempt to negotiate an end to escalating tariffs that have disrupted global supply chains. Trump has pushed for higher tariffs on imports, including a 55% rate on Chinese goods, arguing it will boost domestic manufacturing. Critics, however, warn this could raise prices for American consumers. A deadline of August 12 has been set for the U.S. and China to reach a long-term trade agreement. A Trump spokesperson did not comment on the reported meeting plans. The most recent high-level talks between the two countries occurred on July 11, when U.S. Secretary of State Marco Rubio and Chinese Foreign Minister Wang Yi held discussions in Malaysia. Rubio confirmed that Trump had received an invitation to visit China, stating both leaders 'want it to happen.' Meanwhile, China's Commerce Minister Wang Wentao emphasized the need to stabilize trade relations, suggesting recent talks in Europe indicated a tariff war was unnecessary. - Reuters
