The Economic Information Daily reported on the 24th that Chinese President Xi Jinping arrived in the United States on the afternoon of September 23, U.S. Eastern Time, and was accorded high-level hospitality by U.S. President Trump. The two leaders are scheduled to hold a closed-door meeting on the 24th local time. On the occasion of the summit between the leaders of China and the United States, Lin Ka-hang, Executive Director and Managing Director of Guonong Securities, reminded investors on the Economic Information Daily's live program "Market Open Good Morning" not to have excessive or blind expectations for the "Xi-Trump meeting." In terms of actual market impact, negative factors in the current situation still outweigh the positive ones. Investors should remain calm when positioning Hong Kong stocks and avoid being swayed by U.S. political sentiments and negotiation tactics.
Regarding the announcement extending the two-month truce in the China-U.S. trade war, Lin Ka-hang stated frankly that this is not a substantial positive development. He explained that the truce has only been extended by two months, which is essentially a transitional political move that fails to eliminate market uncertainty and instead postpones underlying concerns to the future. Analyzing the political motivations behind this, the key factor is undoubtedly the U.S. midterm congressional elections. The Trump administration currently faces an unfavorable situation in the congressional elections, and under immense political pressure, it is difficult for the U.S. side to make substantive concessions during the leaders' meeting. Therefore, extending the truce period by two months is largely a short-term, expedient measure timed to coincide with the midterm elections.
On issues related to the Xi-Trump meeting, many major financial institutions have offered various analyses. For instance, UBS believes that frictions between China and the U.S. in areas such as AI distillation and tariffs will become the new normal, and localized frictions do not indicate a reversal in the strategic stability between the two nations. Facing various research reports and professional jargon from major institutions, Lin Ka-hang advises investors to return to basics, avoid overcomplicating their thinking, and simply focus on the core question: "Are Sino-U.S. relations getting better or worse?" He believes that the relationship is clearly continuing to deteriorate, though not yet heading toward an immediate, complete decoupling, because the United States currently cannot afford the cost of abruptly severing trade ties with China.
Lin Ka-hang pointed out that although China's export share to the U.S. continues to decline, China's total trade volume over the past two years has not decreased but actually increased, indicating that even if exports to the U.S. face further setbacks in the future, the impact on China's overall trade structure would be quite limited. In contrast, if the U.S. abruptly decouples completely from China, its high-tech production would immediately be paralyzed due to a lack of rare earth supplies, and U.S. agricultural products would lose the Chinese market. Since farmers in the U.S. Midwest are mostly supporters of the Republican Party, disruptions in agricultural exports would directly damage the core electoral prospects of the Republican Party in the midterm elections.
Lin Ka-hang reminded investors to remain rational when assessing Hong Kong stocks, face the fact that China's dependence on trade with the U.S. has significantly decreased, avoid over-interpreting any short-term benefits from the Xi-Trump meeting, and do not panic excessively over U.S. sanctions. (al)
Regarding the announcement extending the two-month truce in the China-U.S. trade war, Lin Ka-hang stated frankly that this is not a substantial positive development. He explained that the truce has only been extended by two months, which is essentially a transitional political move that fails to eliminate market uncertainty and instead postpones underlying concerns to the future. Analyzing the political motivations behind this, the key factor is undoubtedly the U.S. midterm congressional elections. The Trump administration currently faces an unfavorable situation in the congressional elections, and under immense political pressure, it is difficult for the U.S. side to make substantive concessions during the leaders' meeting. Therefore, extending the truce period by two months is largely a short-term, expedient measure timed to coincide with the midterm elections.
On issues related to the Xi-Trump meeting, many major financial institutions have offered various analyses. For instance, UBS believes that frictions between China and the U.S. in areas such as AI distillation and tariffs will become the new normal, and localized frictions do not indicate a reversal in the strategic stability between the two nations. Facing various research reports and professional jargon from major institutions, Lin Ka-hang advises investors to return to basics, avoid overcomplicating their thinking, and simply focus on the core question: "Are Sino-U.S. relations getting better or worse?" He believes that the relationship is clearly continuing to deteriorate, though not yet heading toward an immediate, complete decoupling, because the United States currently cannot afford the cost of abruptly severing trade ties with China.
Lin Ka-hang pointed out that although China's export share to the U.S. continues to decline, China's total trade volume over the past two years has not decreased but actually increased, indicating that even if exports to the U.S. face further setbacks in the future, the impact on China's overall trade structure would be quite limited. In contrast, if the U.S. abruptly decouples completely from China, its high-tech production would immediately be paralyzed due to a lack of rare earth supplies, and U.S. agricultural products would lose the Chinese market. Since farmers in the U.S. Midwest are mostly supporters of the Republican Party, disruptions in agricultural exports would directly damage the core electoral prospects of the Republican Party in the midterm elections.
Lin Ka-hang reminded investors to remain rational when assessing Hong Kong stocks, face the fact that China's dependence on trade with the U.S. has significantly decreased, avoid over-interpreting any short-term benefits from the Xi-Trump meeting, and do not panic excessively over U.S. sanctions. (al)
