HONG KONG (AFP) – Asian markets mostly rose Monday, with investors keeping a wary eye on China-US trade talks planned for the weekend, which come after Washington imposed sanctions on several Hong Kong officials, further straining tensions between the superpowers.
Adding to uncertainty was US lawmakers’ inability to find common ground on a much-needed, new stimulus for the world’s top economy, with executive orders signed by Donald Trump considered sticking plasters for a crippling crisis.
Washington on Friday hit a group of Chinese and Hong Kong officials — including the city’s leader Carrie Lam — with sanctions in the latest salvo in a row linked to Beijing’s decision to impose a security law on the city.
The move came after the White House set the clock ticking on forcing Chinese internet giants TikTok and WeChat to end all operations in the US, as part of a diplomatic-commercial offensive analysts fear will likely worsen leading into November’s presidential election.
China slammed the sanctions as “barbarous and rude”.
On Monday, Hong Kong media mogul Jimmy Lai, one of the city’s most vocal Beijing critics, was arrested under the security law, deepening a crackdown on democracy supporters.
US regulators also last week recommended overseas firms listed in the US should be subject to US public audit reviews from 2022, which could cause Chinese firms to delist.
The developments have put the spotlight on Saturday’s meeting of trade officials to review their “phase one” trade deal signed in January.
There is a concern that the pact could be torn up as China has failed to meet certain criteria owing to the impact of the virus, a move most experts say would be devastating to a global economy that is already teetering.
Still, National Australia Bank’s Tapas Strickland said: “The running assumption in markets has been President Trump needed the phase one deal to succeed (as much as China) this side of the November elections to secure the midwest” farming belt.
But he added: “At the same time President Trump is running a hard China line into the elections”.