US and China tensions escalate as Hong Kong is in chaos

U.S. and China tensions escalate in the stock markets

Tensions continue to rise between the U.S. and China as the markets try to decipher what direction it should take. Hong Kong protests continue over the weekend with Beijing’s proposed laws.

Asian markets traded mostly higher to start the week amid the U.S. and China chaos, with other markets closed due to public holidays.

Meanwhile, the National People’s Congress continues its talks amid Hong Kong turmoils. People are tweeting all over the world expressing their concern over the people of Hong Kong.

Asian markets perform well despite chaos

Here’s a recap of the remaining markets that traded starting the week:

  • Australia’s ASX 200 climbed 118.60 points, or 2.16%, to 5,615.60, with all sectors finishing up.
  • Over in Japan, the Nikkei 225 index added 353.49 points, or 1.73%, to 20,741.65 while the Topix index was up 24.40 points, or 1.65%, to 1,502.20.
  • South Korea’s KOSPI gained 24.47 points, or 1.24%, to 1,994.60.
  • Mainland Chinese shares traded as the Shanghai composite rose 0.15% closing at 2,817.97 points.
  • The Hang Seng index in Hong Kong surprisingly canceled earlier losses of more than 1% to finish up 0.1% at 22,953.68 amid the chaos.

In a report from Reuters, government departments in Hong Kong rallied behind Beijing’s diabolical plans on Monday, May 25, after thousands gathered on the streets to protest over the weekend.

China still has attractive investment, analysts say; urges the U.S. to stop the blame games

Last week, the U.S. made a bold move to ban a couple of Chinese firms, as well as forbidding Huawei, China’s tech giant.

However, in a recent report from CNBC, it looks like China has the upper hand as companies diversify manufacturing after the coronavirus shock.

There are also recent reports that the Hang Seng Index changed its stock index rules, becoming a new flocking area for Chinese companies.

Gerry Mattios, expert vice president at Bain, said in a phone interview:

“We’re not going to see China drying up on manufacturing all of a sudden […] A big [portion] of the exporting manufacturing capacity that China had could potentially be shifting out of China, but a lot of the capacity for internal consumption in China will stay in China.”

In terms of China’s labor market, How Jit Lim, a managing director with a consulting firm Alvarez & Marsal, praises China to have an attractive supply chain solution with its mature labor force.

He added that there are very few countries in the world where you can find almost everything you need to build something.

Even though China may be the first economy to rise from economic lockdown, other countries may not be prepared to buy in a big way. Even Chinese officials remain wary.

As per Reuters, Chinese foreign minister Wang Yi expressed his deep sympathy to the U.S. for the pandemic. In addition to the coronavirus crisis, a “political virus” is also spreading in the U.S. using every opportunity to attack China.

The markets are in for another emotional roller-coaster this week with the world focusing its eyes on Hong Kong. Wall Street trading in the U.S. will resume on May 26 after Memorial Day.

Featured image courtesy of Studio Incendo/Flickr

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