SHANGHAI: China stocks jumped on Wednesday, the first trading day after a holiday break, as investors cheered Beijing’s decision to launch a huge new economic zone in Hebei province, with shares of more than 30 related companies surging the daily limit of 10 percent. Hong Kong stocks gained initially before edging lower, with the appetite for risk attenuated ahead of a potentially tense meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this week. Both the CSI300 index and the Shanghai Composite Index gained 1.1 percent at the end of the morning session, to 3,494.86 points and 3,256.67 points, respectively.
China approved a new special economic zone, described as “a thousand year project”, on Saturday in the heavily polluted province of Hebei, to focus on building clusters of high-tech and innovative businesses and take over some “non-capital functions” from Beijing. “The way they put it leaves lots of room for imagination, in terms of future investment,” said Tian Weidong, an analyst at Kaiyuan Securities. Tian identified several sectors aside from property that would benefit from the economic zone including environmental protection and infrastructure stocks. Both CSI sub-indexes were up over 2 percent at midday.”This time the momentum is more sustainable because it’s boosted not simply by the housing market, which holds lots of uncertainty at the moment,” Tian said. Raw material stocks led the gains in a board-based rise, with the sector index up 2.8 percent at the lunch break. Real estate developers added 1.7 percent, despite Beijing’s ban on property sales to contain speculators after a sudden housing boom in the new economic zone.
