Stocks in China declined on Monday following a latest downturn in US- China trade-relations. In a recent tweet, President Donald Trump announced tariff increase on Chinese products of $200 billion, from 10% to 25%.
The Shanghai composite fell 5.58% and finished at 2,906.46, while the Shenzhen indices were down by 7.56% and finished at 8,943.52. The Shenzhen composite was also down by 7.381% and finished at 1,515.80. The CSI 300, which tracks the biggest recorded stocks on the terrain, declined 5.84% to 3,684.62.
Hong Kong – Hang Seng slipped 2.90% to close at 29,209.82. Hong Kong-listed stock of Chinese Telecommunications equipment company ZTE was down by 8.82%. Its stock was down due to the trade-war between Washington and Beijing. Shenzhen listed stock of the company was also down by 9.98%.
The Chinese currency Yuan (offshore) was also down and finished at 6.7790 against the US dollar. It had touched high at 6.72 a week ago. Its counterpart, on-shore Yuan was traded at 6.7655 opposite the greenback, which were approximately 6.73 before one week.
In the tweet Trump has said that he is increasing duty on Chinese goods of $200bn imported in US by 15%. He said that he may enforce tariff of 25% on Chinese products of $325bn.
China has given indication that it will not bow to the pressure created by Trump and may cancel the visit of its VP, Liu to the US. Donald Trump has clearly said that he is not happy with the pace of the negotiations going on with China. He is mounting pressure on Chinese leadership to do more.
Rodrigo Catril, A foreign exchange expert with the National Australia bank warns that position of the risk assets would become worse and the recovery of the global growth will be hampered.
Another expert at the investment firm, Greg Valliere said that people were optimistic to see something by May end, but this is reckless.