The long march
Chinese Premier Xi Jinping urged citizens to embrace “the new long march” amid rising trade tensions with the United States. With this term, he is asking people to be ready for hardships to achieve progress. The hard times are already visible. China’s growth is falling, so are its exports. Private debt is rising too.
Markets around the world perceived the call for the long march as a sign that the trade war is here to stay. The worries for Huawei worsened as Japanese giant Panasonic ditched ties with the Chinese tech giant. The list of companies suspending business with Huawei is growing with ARM and Vodafone joining the ranks.
Both the main Chinese stock indexes, the Shanghai Composite and the Shenzhen Component, dropped on May 23, extending May 22’s fall. The Shanghai Composite Index retreated 1.35% from the previous day’s close. The Shenzhen Component shed 232 points, or 2.56%, to end up at 8.809.54.
The iShares MSCI China ETF (MCHI) dropped 1.07% on May 22 after gaining 1.52% on May 21. The ETF was down 1.88% in pre-market trading at 5:31 AM EST. Meanwhile, the iShares China Large-Cap ETF (FXI) dropped 0.56% yesterday and was down 1.58% in pre-market trading at 5:55 AM EST. The technology-focused KraneShares CSI China Internet ETF (KWEB) lost 1.50% yesterday and was down 0.86% in pre-market trading at 4:15 AM EST. The Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) lost 0.42% on May 22 and was down 1.53% in today’s premarket trading at 5:25 AM EST.