Chinese mainland stocks edged higher on Friday, outperforming their regional peers, as strong industrial profit data lifted market sentiment despite lingering worries over Middle East tensions, said Wang Ying, a market analyst for China Global Television Network (CGTN).
Chinese stocks closed higher on Friday, with the benchmark Shanghai Composite Index up 0.63 percent to 3,913.72 points. The Shenzhen Component Index closed 1.13 percent higher at 13,760.37 points.
Shares related to the lithium battery industrial chain and pharmaceutical and chemical sectors led the gains, while the green power sector suffered steep losses.
"The Shanghai Composite index inched up 0.63 percent, while the Shenzhen Component index added 1.13 percent. And the blue chip CSI 300 index rose 0.56 percent. The slight strength came after China's industrial firms reported strong profit growth early in the year, reinforcing recovery signals in China even as the Middle East conflict threatens global growth," Wang said.
"Industrial profits grew 15.2 percent in the first two months over the same period last year. And among the sectors reporting the fastest profit growth were computer, communication and other electronic equipment manufacturing with a 200 percent rise during the period. Across the board today, the green power sector was outperforming, with Henan Yuneng Holdings and Jinneng Holding Shanxi Electric Power both jumping to the upper daily limit. Gains also were coming from pharmaceuticals, chemical industry and lithium battery sectors," said the analyst.
Chinese mainland stocks edge higher on Friday as strong industrial profit data lifts market sentiment
Many U.S. businesses remain hopeful that U.S.-China presidential talks will help usher in greater stability and predictability in China-U.S. relations, said Margery Kraus, founder and executive chair of APCO, a global advisory and advocacy firm based in Washington D.C.
At the invitation of Chinese President Xi Jinping, U.S. President Donald Trump will pay a state visit to China from May 13 to 15. As high-level meetings and leadership exchanges unfold between the two countries, companies are closely watching for signs of improved communication and reduced uncertainty in the bilateral relationship.
"I think that, messages for both countries, it's important to have a message of stability, and this is no different than what we talked about a little bit earlier. And the reason for that is companies need predictability. And I know from the U.S. and with the tariffs -- one day it's this, one day it's that -- how much, just disorientation it provided for the companies. And so I think it's wonderful that they're getting together. The idea of the two people talking together, the two leaders talking together, I think makes everybody more comfortable that there'll be some kind of more normal relationships between China and the U.S.," Kraus said during an interview with China Global Television Network.
In her view, any headway in smoothing out relations could lead to significant mutual benefits, as it would allow American businesses to look past political differences to seek lucrative economic cooperation.
"I think that for the U.S. companies, maybe there's a little bit of tug of war between the headquarters and the people on the ground who see so much more opportunity. And so I think for the U.S. companies, if we could come to some framework where it's less political and more economic, I think that would be a really good thing. China is really showing itself to be very innovative in certain areas, and I know a lot of their healthcare innovations. And maybe there's an opportunity for some of the companies to partner. So we've come up with this idea of a 'multi-local company.' We talk about multinational, but it gives the idea that really these companies need to learn to be multi-local and know how to deal differently in each area," she said.
Kraus stressed that long-term, APCO remains confident in China's potential.
"We are very bullish on continuing our work in China. I think that we see the Chinese market as one where there are a lot of opportunities for these companies that are becoming these multinationals or multi-locals. Both economies are so important to the world that if we could find some ways to partner, it would be so important for the future. And also, I think the world is really dependent on these two big economies also paying attention to the rest of the world and how what they do can be helpful and elevate the quality of life," she said.
US companies see opportunity in stabilizing in ties with China: APCO
