© Reuters
Investing.com – Chinese stock markets rebounded from recent losses Monday, outpacing their broader Asian peers as US President Joe Biden said during a G7 summit that he sees an imminent improvement in US-China relations.
Speaking at the G7 summit in Japan, Biden said the group had agreed on a unified approach to China, and that he expected a thaw in relations with the country “very soon.”
The shift in rhetoric improved sentiment towards the Chinese markets, helping them recover from two straight weeks of losses. Chinese indices rose by about 0.7% and 0.4%, respectively.
Gains in Hong Kong-listed Chinese stocks pushed up 1.7%.
Biden has hinted that he could speak to Chinese President Xi Jinping soon, and that the G7 is looking at ways to diversify supply chains to reduce its dependence on China.
COVID-related turmoil in China over the past three years has sent ripples through global supply chains, given the country’s key role in trade. This also saw many companies, particularly in the manufacturing sector, move to reduce their reliance on Chinese factories.
While the easing of most anti-COVID measures this year has seen sentiment improve some, manufacturers remain cautious about China.
Biden’s comments come just months after the US shot down a Chinese balloon in US airspace that it claimed was being used to conduct espionage operations. China denied the allegations and condemned the destruction of the airship.
The dispute has heightened tensions between Washington and Beijing, which have in turn been exacerbated by clashing rhetoric over the status of Taiwan. On Sunday, Biden reiterated that any action by China against Taiwan will be met with a response.
But any improvement in Sino-US relations bodes well for Chinese markets, which were hit by a slew of weak economic indicators in May.
While the Chinese economy grew more than expected in the first quarter, indicators for April showed a more challenging start to the second quarter. China also gave a modest forecast for its GDP for the full year, at 5%.
