Alibaba Soars 7% On AI Push As China Pledges To 'Vigorously Boost' Spending — Hang Seng Reaches 2-Year High

Hong Kong stocks surged Thursday morning, with the Hang Seng Index climbing 2.5% to 24,183.07, reaching its highest level since January 2022 and extending its year-to-date gains to 23.37%.

What Happened: Chinese tech giants led the rally on Hong Kong Exchange, with Alibaba Group Holding Ltd BABA BABAF rallying 7.24% to 139.30 HKD ($17.93) and Tencent Holdings Ltd TCEHY jumping 5.84% to 534.00 HKD ($68.72).

Other major tech firms also posted substantial gains, including Baidu Inc BIDU up 3.83% to 90.80 HKD ($11.68), JD.com Inc JDCMF rising 4.06% to 171.20 HKD ($22.03), and Meituan MPNGY advancing 4.08% at 179.50 HKD ($23.10).

The market rally follows Premier Li Qiang‘s announcement of increased fiscal stimulus during China’s annual parliamentary meeting on Wednesday, Reuters reported. Li pledged to “vigorously boost” sluggish consumption and cushion impacts from escalating U.S. trade tensions, while maintaining China’s 5% growth target for 2025.

“An increasingly complex and severe external environment may exert a greater impact on China in areas such as trade, science, and technology,” Li warned, addressing what he called “changes unseen in a century.”

See Also: NBA Legend Shaq Says His Net Worth ‘Quadrupled’ Once He Took Note From Jeff Bezos And Started Investing In Things That ‘Change People’s Lives’

Why It Matters: Beijing plans to issue 1.3 trillion yuan ($179 billion) in ultra-long special treasury bonds this year, up from 1 trillion yuan in 2024, and will allow local governments to issue 4.4 trillion yuan in special debt. The budget deficit is projected to widen to around 4% of GDP.

Investors seem particularly enthused by China’s AI ambitions, with Li promising to foster artificial intelligence applications across electric vehicles, smartphones, and robots. Market sentiment has been bolstered by the recent emergence of AI platform Deepseek, with Alibaba also announcing its new QwQ-32B reasoning model today.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.