US Listed Chinese Stocks Gain As US-China Trade Talks Spark Optimism
U.S.-listed Chinese stocks Alibaba Group Holding (NYSE:BABA), Baidu, Inc. (NASDAQ:BIDU), JD.Com, Inc. (NASDAQ:JD), and PDD Holdings Inc. (NASDAQ:PDD) are trading higher on Monday.
The up movement comes as U.S. and Chinese officials meet in London on Monday for trade talks, which will likely focus on rare earth minerals too.
Chinese EV stocks, including Li Auto Inc (NASDAQ:LI) and XPeng Inc (NYSE:XPEV), also gained on Monday.
Also Read: Trump Accuses China of Violating Tariff Deal — U.S.-Listed Chinese Stocks Slide in Response
The meeting came after President Donald Trump and Chinese President Xi Jinping discussed trade issues on the phone last week.
China has reportedly granted temporary approvals for the export of rare earths, while jetliner Boeing Co (NYSE:BA) has begun commercial jet deliveries in China, CNBC reported on Monday.
China's consumer price inflation dropped by 0.1% in May, compared to Reuters consensus estimates of 0.2%. The producer price index declined 3.3% compared to a 3.2% analyst consensus estimate.
China's export growth missed expectations in May, plunging 48.3% year over year as shipments to the U.S. declined sharply.
Rare earth elements play significant roles, from smartphones to electric vehicles to fighter jets. The U.S. depends on China for ~70% of imports of rare earth elements, signaling U.S. supply chain risks, SCMP reported on Monday, citing analyst estimates.
Beijing has maintained export controls on medium and heavy rare earths, which it announced on April 4 despite the Geneva, Switzerland understanding in May.
Last week, UBS Group expressed optimism about Chinese stocks, citing the recent tariff pause with the U.S., potential stimulus measures from Beijing, and attractive low valuations as key drivers.
Neil Hosie of UBS said Beijing's economic policy measures in September and the emergence of artificial intelligence start-up DeepSeek's affordable models sparked global investor interest in China equities.
Hosie said a 90-day tariff truce and Beijing's hopes for domestic stimulus have translated into higher inflows into China's markets.
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