Chinese stocks gained on Wednesday after stronger factory activity data and President Xi Jinping’s renewed commitment to “high-quality development” lifted investor sentiment.
The CSI 300 Index rose 0.4% by midday, while the Shanghai Composite Index gained 1.1%. Hong Kong markets were closed for a public holiday.
Factory Activity Extends Growth
A private business survey showed China’s manufacturing sector expanded for a seventh consecutive month in June, marking its strongest quarter since late 2020.
The upbeat data reinforced hopes that parts of China’s economy continue to recover despite broader growth challenges.
Xi Reaffirms Economic Goals
Speaking on Wednesday, Xi pledged to “steadily promote high-quality development”—Beijing’s strategy for achieving sustainable, innovation-led economic growth.
His remarks helped support investor confidence, particularly in technology and advanced manufacturing sectors.
Tech Stocks Lead Gains
Technology shares continued to outperform traditional industries.
An index tracking chipmaking equipment and materials jumped nearly 4%, reaching a fresh record high.
Biotechnology and software stocks also posted strong gains, reflecting investor optimism towards innovation-driven industries.
Meanwhile, sectors such as agriculture and property also advanced, suggesting buying interest was broadening beyond technology.
Investors Remain Cautious
Despite the rally, analysts say concerns over China’s economic outlook persist.
Goldman Sachs said discussions with Chinese investors revealed growing caution over the country’s near-term growth prospects, citing weak consumer confidence, labour market pressures and the continuing property downturn.
However, Vikas Pershad, Portfolio Manager for Asian Equities at M&G Investments, said China still offers attractive long-term opportunities across multiple sectors.
“We see a lot of growth on offer at better than reasonable prices in China across sectors,” he said, adding that the firm remains confident in its investment strategy despite current uncertainties.
(with inputs from Reuters)
