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Letters | China can support its stock market in more ways than stabilise it
Readers discuss Beijing’s intervention to calm investor jitters amid a trade war, the danger of isolating China, and a nation under pressure
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Global markets have been on a roller-coaster ride since early April amid the chaos caused by US President Donald Trump’s tariffs. Trump’s hostile tariffs and China’s aggressive retaliation push both countries towards the economic decoupling cliff.
This is not a simple trade war but a war that determines if the US is still able to dictate the global economic rules of the game. This will result in a more fragile supply network and is causing a shock to the US economy. These consequences are the price the US will pay for Trump’s arrogance in believing the globe cannot live without the US.
On the positive side, the trade war has helped China identify its flaws. It is beginning to correct them, promoting long-term, healthy economic development. Economies in the rest of the world are doing the same.
Beijing has sought to calm investors’ fears by stabilising the stock market. Central Huijin, a unit of China’s sovereign wealth fund, bought exchange-traded funds. China’s state firms pledged to boost share purchases. China’s financial regulatory authority raised insurers’ equity investment cap.
In the meantime, we see an influx of buy orders through the southbound Stock Connect. The daily net buy of Hong Kong stocks on April 9 reached a new high of HK$35.5 billion (US$4.6 billion). This helped turn around the Hong Kong stock market’s declining trajectory. Beijing did well to stabilise the confidence of global investors.
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