Global stocks had tumbled yesterday after China, Mexico and Canada hit back at US tariffs and fears grew that Europe could be president Donald Trump’s next target.
Investors welcomed China’s economic targets for the coming year today as the government held its annual meeting of the National People’s Congress.
However, observers have tempered expectations for the stimulus given China is facing strong economic headwinds.
These include a persistent property sector debt crisis, stubbornly low consumer demand and stuttering employment for young people.
China set an annual growth target of around 5% today, vowing to make domestic demand its main economic driver.
Beijing also announced a rare hike in fiscal funding, allowing its budget deficit to reach 4% this year.
It comes alongside a pledge to create 12 million new jobs in China’s cities and a push for 2% inflation in 2025, an official document seen by AFP today showed.
The world’s second-largest economy is also planning to increase defence spending by 7.2%, the same as last year.
Hong Kong rose around 2.5% in early trade before pulling back to around 1.5%.
Jakarta climbed more than 2% and Taipei jumped 1%.
Tokyo and Shanghai held steady while Seoul was slightly up.
Sydney, Wellington and Bangkok were down around 1%.
Hong Kong firm CK Hutchison rose 25% after the company agreed to sell its lucrative Panama Canal ports to a US-led consortium under fierce pressure from Trump.
US tariffs are expected to hit hundreds of billions of dollars in total trade between the US and China.
Trump signed an executive order on Monday to increase a previously imposed 10% tariff on Chinese goods to 20%.
China responded by saying it would impose levies of 10% and 15% on a range of US agricultural imports.
“Investors don’t like tariffs, and they are deeply uncomfortable with president Trump’s new world order, which is weighing on market sentiment,” said Kathleen Brooks, research director at XTB trading platform.
“More tariffs are expected from the US in the coming weeks, including for the EU and reciprocal tariffs, which could keep investors on edge in the short term,” Brooks said.