Chinese stocks rise after Beijing calls for closer co-operation with US


Chinese equities updates

Chinese stocks were boosted by calls from Beijing for greater co-operation with Washington after the US securities regulator tightened controls on Wall Street listings of groups from the world’s second-biggest economy.

China’s CSI 300 benchmark of Shanghai- and Shenzhen-listed blue-chips rose 1.5 per cent on Monday, while Hong Kong’s Hang Seng index added 0.7 per cent. The city’s Hang Seng Tech index, which tracks big internet groups including Tencent and Alibaba, reversed early losses to rise 0.2 per cent.

Those gains came after the China Securities Regulatory Commission, Beijing’s market regulator, called on Sunday for closer co-operation with Washington, stressing the country’s efforts to improve transparency and predictability after a crackdown on tutoring groups obliterated the market value of the $100bn sector’s biggest companies.

Chinese listings in the US have become a geopolitical flashpoint as Beijing seeks to exert greater control over the country’s powerful tech sector.

The US Securities and Exchange Commission said on Friday that Chinese groups seeking to sell shares in America would be subject to stricter disclosures.

Last month, China’s cyber security regulator announced plans to review all foreign listings by companies with data on more than 1m users after top leaders in Beijing called for an overhaul of how the country regulates initial public offerings in the US. The crackdown came just days after the $4.4bn listing of ride-hailing group Didi Chuxing.

The intensifying scrutiny of how Chinese groups access capital markets has pummelled stocks, delivering the worst month for tech groups from the country listed in the US since the global financial crisis. The Hang Seng Tech index fell 17 per cent last month.

“China appears to be attempting to check the rise in corporate power and rebalance the share of the economy in favour of labour, which could result in [a] decline in corporate profit share,” analysts at JPMorgan wrote in a note on Sunday.

Meanwhile, data released by China over the weekend showed that factory activity grew at the slowest pace in 15 months in July as demand contracted for the first time in more than a year.

Elsewhere in the region, Japan’s Topix rose 1.7 per cent and Australia’s S&P/ASX 200 gained 1.5 per cent.

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