China Rallies to Stabilize Stock Markets Amid Rising U.S. Tariffs

Chinese Authorities and Brokerages Unite to Boost Market Confidence

As the U.S.–China trade war deepens, China is taking strong action to protect its stock markets and economic stability. Major Chinese brokerages, including Citic Securities, Orient Securities, and Industrial Securities, have pledged to support the domestic stock market. The Shanghai Stock Exchange held a high-level meeting with these firms, emphasizing the need to stabilize markets amidst growing global uncertainty.

These efforts come as part of a larger response by Chinese regulators and state-backed entities. Central Huijin, China’s sovereign wealth fund, and the Social Security Fund have significantly increased their investments in exchange-traded funds (ETFs) and A-share stocks. Their goal is to reassure investors and bring liquidity into the market.

Stock Buybacks Gain Momentum Across Chinese Companies

Over 100 publicly listed Chinese companies have announced stock buyback or share purchase plans to restore investor confidence. One notable example is Sanyi Heavy Industry Co., which repurchased 5 million shares worth 92.9 million yuan ($12.64 million) on Tuesday.

XCMG Construction Machinery followed suit, unveiling plans to repurchase shares worth up to 3.6 billion yuan. Meanwhile, state-owned firm Chengtong is using a 100 billion yuan stock buyback fund to invest directly in public companies, injecting more cash into the struggling markets.

These buyback programs indicate a coordinated effort from both the private and public sectors to reduce volatility and protect the market from external shocks.

Southbound net buying through Stock Connect has crossed 29.63 billion yuan, hitting a record high.

Trump’s New Tariff Order Escalates Trade War

On Tuesday, U.S. President Donald Trump signed an executive order imposing an additional 50% tariff on Chinese imports. This increases the total tariff rate to 104%, including previous levies. The new tariffs will take effect from 00:01 ET on April 9.

The decision is a dramatic escalation in the ongoing trade tensions between the two nations. U.S. Treasury Secretary Bessent called China’s response a “big mistake,” while revealing that the U.S. is currently in discussions with over 70 countries for new trade deals. He added that the tariff hikes were not due to domestic pressures, but rather due to international trade negotiations.

Chinese Leadership Sends a Message of Strength

In the midst of economic turbulence, President Xi Jinping offered a strong statement of confidence in China’s economy. Using a vivid metaphor, he said, “The Chinese economy is a sea, not a pond. Storms can overturn a pond, but never a sea.” This message was aimed at reassuring both domestic and global audiences that China’s economy can withstand external shocks.

Market Reaction and Outlook

Despite an initial drop, Chinese markets rebounded. The Shenzhen Index rose by 0.9%, and the Hang Seng Tech Index recovered after an early 6% fall. These signs of recovery highlight the effectiveness of China’s intervention efforts so far.

The combined actions of the Chinese government, brokerages, and listed companies reflect a unified front to stabilize the markets. With bold economic policies, strategic buybacks, and strong leadership messaging, China is working to counter the pressure from rising U.S. tariffs and maintain long-term economic stability.

Summary

China Responds Boldly to U.S. Tariff Hike

As U.S. President Donald Trump raised tariffs on Chinese imports to a total of 104%, China has taken swift measures to protect its economy and calm the markets. Major brokerages like Citic and Orient Securities have promised to help stabilize stock prices. Over 100 companies have launched share buyback plans, including Sanyi Heavy Industry and XCMG Construction. Additionally, state-backed investors like Central Huijin and the Social Security Fund are investing more in Chinese stocks and ETFs.

President Xi Jinping assured the public of China’s economic strength, stating that “the Chinese economy is a sea, not a pond,” implying it can handle global shocks. Meanwhile, U.S. Treasury Secretary Bessent criticized China’s actions and revealed that the U.S. is negotiating trade deals with 70 countries. Despite early losses, Chinese stock indices rebounded, showing signs that China’s strategies to support its markets may be working.