China Stocks Waver as Trump-Xi Summit Approaches

The Shanghai Composite rose 0.2% to 3,663 on Friday, while the Shenzhen Component edged down 0.1% to 11,186, delivering a mixed performance as investors adopted a cautious stance ahead of next week’s summit between US President Donald Trump and Chinese President Xi Jinping. The high-stakes meeting in Shenzhen faces renewed uncertainty after allegations surrounding Nvidia CEO Jensen Huang’s ties to a suspected Chinese spy threatened to reignite bilateral friction over semiconductor trade. Huang’s controversy could hand US lawmakers fresh ammunition to push for stricter technology controls ahead of the leaders’ talks. Notable gainers included Cambricon Technologies (4.7%) and Hygon Information Technology (3.8%), while optical module suppliers Zhongji Innolight (-3.2%) and Eoptolink Technology (-2.9%) retreated. Despite the day’s divergent moves, both benchmark indices remained on track to post weekly gains.

The Shangai Composite Index dropped 25 points or 0.67 percent on Thursday to close at 3656 points. Losses were led by Zijin Mining (-3.88%), China Molybdenum (-2.84%) and SAIC Motor (-2.82%). Offsetting the fall, top gainers were Avic Shenyang Aircraft (1.89%), ICBC (1.76%) and Bank Of China (1.58%).

The Shanghai Composite fell 0.67% to close at 3,655.8 on Thursday, while the Shenzhen Component dropped 1.68% to 11,198, both retreating from the previous session as investors were underwhelmed by the PBoC’s measures to support domestic demand and growth. The PBoC said it would maintain a flexible, targeted and forward-looking monetary policy, keeping liquidity ample and financing conditions accommodative while aligning money and credit growth with economic expansion and price stability goals. It also pledged greater structural support for domestic demand, technological innovation, small businesses and key infrastructure, while diversifying loan interest rate benchmarks beyond the loan prime rate. Adding to the negative sentiment, concerns over a potential leadership change at Nvidia further weighed on the already fragile AI trade. Notable decliners included Foxconn Industrial Internet (-4.85%), Zijin Mining Group (-3.88%), CATL (-2.70%), BYD (-2.10%) and Zhongji Innolight (-6.11%).