US Listed Chinese Stocks Gain on Stimulus Plans to Counter US Tariff Risks

U.S.-listed Chinese stocks Alibaba Group Holding BABA, JD.com, Inc JD, PDD Holdings Inc PDD, Baidu, Inc BIDU, NIO Inc NIO, Li Auto Inc LI, XPeng Inc XPEV are trading higher Tuesday amid reports indicating China’s stimulus plans to deter potential U.S. tariffs.

Chinese e-commerce juggernaut Alibaba is considered the barometer for China’s tech sector.

Reuters cites familiar sources as saying Chinese authorities plan to issue 3 trillion yuan ($411 billion) in special treasury bonds in 2025, a jump from 2024’s 1 trillion yuan.

Also Read: Consumer Finance Watchdog Cracks Down on Credit Card Sneaky Fees and False Promises

The stimulus will target potential U.S. tariffs on Chinese imports, which President-elect Donald Trump threatened during his presidential campaign days.

China expects to drive consumption through subsidy programs, equipment upgrades, funding investments in advanced sectors, and more.

China targets a subsidy program allowing consumers to trade in old cars or appliances and subsidize large-scale equipment upgrades.

The stimulus would also fund the construction of railways and airports and build security capacity. A significant portion of the funding will go towards electric vehicles, robotics, semiconductors, and green energy.

The rest of the stimulus will help recapitalize large state banks.

China’s new special treasury debt issuance in 2025 would equate to 2.4% of 2023 gross domestic product (GDP).

China’s November economic growth missed expectations, affecting retail and property sectors.

The National Bureau of Statistics (NBS) announced that November retail sales grew 3% year-over-year, down from October’s 4.8% growth and below economists’ forecast of 5.3%.

Fixed-asset investment increased by 3.3% for the year through November, while property investment fell by 10.4%. Industrial production rose 5.4% year-over-year in November, slightly higher than October’s 5.3% growth, and the urban unemployment rate remained steady at 5%.

Investors can gain exposure to Chinese equities through iShares China Large-Cap ETF FXI and KraneShares Trust KraneShares CSI China Internet ETF KWEB.

Price Actions: At the last check on Tuesday, BABA stock is up 0.38% to $85.46. JD is up 0.02%, BIDU is down 0.62%, NIO is up 3.13%, LI is up 0.99%, and XPEV is up 2.58%.

Also Read: