The Shanghai Composite Index dropped by 0.1%, dipping below the 3,350 mark, while the Shenzhen Component fell 0.65%, closing at 10,140 on Friday. This retreat erased some of the gains made earlier in the week as market sentiment grew cautious ahead of crucial trade talks between China and the United States this weekend.
Vice Premier He Lifeng is scheduled to meet US Treasury Secretary Scott Bessent on Saturday in Switzerland. The high-level discussions are aimed at addressing escalating tariff tensions between the two global economic giants. Investors are hopeful that these talks might pave the way for a de-escalation of the ongoing trade conflict.
Earlier this week, the People's Bank of China (PBOC) indicated that it would likely lower interest rates to buffer the economy from the growing effects of trade disputes. This move reflects Beijing's efforts to stabilize the domestic market amid concerns about the potential fallout from rising tariffs.
In addition to the trade talks, market participants are keenly awaiting the release of upcoming trade data, which will shed light on how China's export-driven economy is faring under the pressure of tariff increases. These figures could provide critical insight into the broader economic outlook and shape investment decisions in the coming weeks.
Among the day's notable decliners were Avic Chengdu, which saw a drop of 2.9%, Zhongji Innolight, down by 1.4%, and Hytera Communication, also falling by 1.4%. Despite Friday’s pullback, the Shanghai and Shenzhen indices are still set to post solid weekly gains of around 2.1% and 2.4%, respectively.