Chinese equities surged on Friday, with the CSI 300 Index at one point climbing 2.5% to its highest level this year, as investors anticipated new policy measures to boost consumption. Consumer stocks led the rally, with liquor makers Kweichow Moutai and Wuliangye Yibin jumping more than 5% each. In Hong Kong, the Hang Seng Index has gained 2.49%, reflecting renewed confidence in China’s economic outlook. The Shanghai Composite is up 1.64%.
The rally comes ahead of a press conference on Monday, where officials from the finance and commerce ministries, along with the central bank, are expected to outline measures to stimulate domestic demand. The policy shift follows signals from China’s annual National People’s Congress, where boosting consumption was named a top priority for the first time under President Xi Jinping.
Investor sentiment toward Chinese equities has also been bolstered by strong foreign inflows. Data from the Institute of International Finance (IIF) shows that overseas investors added $11.2 billion to Chinese stocks in February—the highest monthly inflow since September 2023—amid growing recognition of China’s advances in artificial intelligence and electric vehicles.
Despite these gains, broader concerns remain. Analysts note that Chinese equities are still trading well below their 2021 peaks, and regulatory uncertainty continues to weigh on investor confidence. However, some portfolio managers see the combination of low valuations and policy support as a catalyst for further upside.
The rebound in Chinese stocks is also occurring against the backdrop of global market shifts. While US equity indices have struggled in recent weeks, Hong Kong’s Hang Seng Index has surged 20% year-to-date, outpacing major Western benchmarks. Analysts attribute this trend to China’s resilience to trade disruptions and its recent moves to support private enterprise.