Trump Makes Chinese Stocks (Somewhat) Great Again

Global investors lured by relatively low prices, AI bets, and prospect of more stimulus from Beijing

- REUTERS Singapore/Hong Kong, 14 March

As US President Donald Trump's wide-ranging trade war rouses fears of recession, global investors have found an unlikely new sanctuary: Chinese equities. Hong Kong's benchmark Hang Seng Index — where many major Chinese companies are listed — is up 17 percent since Trump entered the White House in January.

That compares to an about 9 percent drop in the S&P 500, which has also shed $4 trillion in market value from record highs last month.

Trump's erratic pronouncements on tariffs and moves to slash federal government spending have challenged assumptions about the appeal of US stocks, which have vastly outperformed most of their global counterparts since 2021.

Investors have moved from believing in "TINA" — there is no alternative to US assets — to "TIARA" — there is a real alternative," said Andy Wong, a senior Hong Kong-based executive at Pictet Asset Management.

Much of the Chinese rally has been led by technology shares that have risen 29 percent so far in 2025, hitting their highest level in more than three years last week. Like many of the new China equities bulls, Wong said he sees opportunities in tech, defense, and consumer-facing plays.

A key reason for the optimism: Chinese stocks are cheap, trading 30 percent under their 2021 highs. The Hang Seng Index is priced at 7 times its projected 12-month earnings — a commonly used metric to value stocks — compared to 20 times for the S&P 500, according to LSEG data.

To be sure, Chinese equities traded cheaply for a reason. Many investors were burned after a pandemic-era government crackdown on tech stocks, and questions remain over the property market and the economy. Concerns about the concentration of power in the White House are magnified in Beijing, where President Xi Jinping has no serious political opposition.