The Chinese stock market is raising expectations ahead of the US-China talks. -Here is the reason.

The Chinese stock market closed mixed on the 8th, likely due to the cautious stance ahead of the major U.S.-China meetings scheduled for this week.

The Shanghai Composite Index fell 4.90 points (0.16%) to 3052.37, and the Shenzhen Component Index closed at 1052.09, down 4.41 points (0.04%). The large-cap benchmark index CSI300 dropped 8.69 points (-0.24%) to 3611.07, and the tech-focused GEM closed at 2023.13, up 0.36 points (0.02%).

Foreign investors continued to sell for two consecutive trading days. The total amount of northbound funds (foreign funds) that flowed into the Shanghai and Shenzhen markets was recorded at 3.79 billion yuan. Of this, 1.739 billion yuan was net sold through the Shanghai-Hong Kong Stock Connect, and 1.97 billion yuan was net sold through the Shenzhen-Hong Kong Stock Connect.

The bilateral meeting between Chinese Vice Premier Liu He and U.S. Secretary of State Janet Yellen is scheduled for tomorrow, and the atmosphere of dialogue between the U.S. and China seems to be intensifying.

On the 11th, news was delivered that a summit meeting between Chinese President Xi Jinping and U.S. President Joe Biden is scheduled to take place on the 15th (local time) on the occasion of the APEC Summit to be held in San Francisco, USA. Quoting sources, Japan’s Kyodo News reported that “the U.S. and Chinese governments are making final preparations for a separate summit meeting from the APEC summit” and are coordinating to hold it on the 15th.

The bilateral face-to-face meeting between the U.S. and Chinese leaders is about a year away. President Xi and President Biden had their first face-to-face meeting on the occasion of the G20 Summit held in Bali, Indonesia, in November last year.

President Xi is also scheduled to have a dinner with more than 100 corporate executives, including the CEOs of major U.S. companies, during the APEC summit. Through this, President Xi is expected to alleviate Western concerns about investment in China and emphasize U.S.-China cooperation and mutual growth.

Meanwhile, Pan Gongsheng, the governor of the People’s Bank of China, said in a keynote speech at the annual meeting of the 2023 Financial Forum held today, “Recently, production and consumption have been steadily recovering, employment and consumer prices have been generally stable, and growth momentum has improved,” and that the achievement of this year’s economic growth target (‘around 5%’) has come into sight.

Governor Pan also emphasized, “I will encourage financial institutions to keep stable fundraising channels open to solve the real estate market slump.”

On this day, in the Chinese stock market, real estate development (1.6%), media (3.7%), and computer-related stocks (1.8%) were strong, while securities brokerage and mining-related stocks recorded a decline of around 1%, showing a sluggish trend.

The Hong Kong market closed lower on the day. The Hang Seng Index closed at 17568.46, down 0.58% from the previous day.