China’s stock market fell as the Shanghai Composite index dropped 0.6% and the Shenzhen Component decreased 1%, influenced primarily by new U.S. tariffs on Chinese imports. Investor sentiment weakened ahead of the “Two Sessions,” where the Chinese government is expected to reveal significant fiscal stimulus measures. Technology stocks suffered steep losses, reinforcing market concerns.

China’s stock market faced declines as the Shanghai Composite index fell by 0.6%, slipping below the 3,370 mark, while the Shenzhen Component decreased by 1% to reach 10,820. Both indices are expected to conclude the week on a downward trend following the announcement from U.S. President Donald Trump, who instituted an additional 10% tariff on Chinese imports, effective March 4.

President Trump also indicated that his proposed 25% tariffs on trading partners Mexico and Canada would be implemented next week. The escalating tariffs pose a serious risk to China’s economy, which heavily depends on exports and free trade practices. Moreover, investor confidence waned as attention turned to the upcoming “Two Sessions,” during which the Chinese government will present its policy agenda for the year ahead.

During this critical period, significant emphasis will be placed on fiscal stimulus measures designed to bolster economic growth. The technology sector and AI-related stocks experienced the most significant downturns, with Cambricon Technologies plummeting by 7.3%, Eoptolink Technology dropping 7.6%, and Hygon Information Technology declining by 5.3%.

In summary, China’s stock market is experiencing downward pressure primarily due to new tariffs imposed by the United States, which threaten its export-driven economy. The forthcoming “Two Sessions” will provide vital insight into the government’s economic strategies, particularly regarding fiscal stimulus. As investors react to these developments, technology stocks reflect heightened vulnerability amid the broader market instability.

Original Source: www.tradingview.com

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