China stocks post best day in a month on Trump-Xi trade hopes

China's stock markets posted their strongest session in about a month on Friday as investors bet that a planned meeting between President Donald Trump and Chinese President Xi Jinping next week could yield progress on trade tensions that have weighed on markets for much of 2026.

The CSI300 index of large-cap stocks and the Shanghai Composite both rose around 1% on the day, according to the Economic Times, citing Reuters reporting. In Hong Kong, the Hang Seng Index gained about 0.6% to close at 24,750.78 points, while the Hang Seng Tech Index climbed 2.2%.economictimes+1

Trade Talks Drive Optimism

Trump is scheduled to host Xi at the White House on September 24 for their second meeting this year. Reuters has reported that the summit is expected to address the extension of an existing tariff truce, possible reductions in tariffs on roughly $30 billion in goods, and agricultural purchases. U.S. Trade Representative Jamieson Greer has indicated the two countries could make announcements related to agriculture and non-tariff barriers.reuters+2

The South China Morning Post reported in August that Chinese executives may join Xi's delegation and that a one-year trade deal agreed in Busan last October is "almost certain" to be extended. Negotiations reportedly include lower tariffs on American energy and agricultural products and reduced duties on Chinese inputs used by U.S. manufacturers.zacks+1

Tech and AI Stocks Lead Gains

Technology shares were the day's clear leaders. The CSI Integrated Circuits Index surged about 5%, while the CSI AI Index gained roughly 3%. In Hong Kong, Lenovo ↘ 10.79%, Hua Hong Semiconductor, and Kuaishou were among the top risers.bastillepost+1

The strength in AI and chip stocks reflects continued investor appetite for China's domestic technology buildout, particularly as the country pushes to expand capabilities amid U.S. restrictions on advanced chip access. Alibaba ↗ 1.28% rose 3% in U.S. pre-market trading, while PDD Holdings ↘ 1.10% and JD.com ↗ 1.64% also gained, lifting the KraneShares CSI China Internet ETF ↗ 0.48% by 2%.247wallst

Challenges Remain

The rally came despite headwinds, including the Federal Reserve's interest rate hike earlier in the week. Goldman Sachs ↘ 0.36% has pointed to continued weakness in Chinese domestic demand as a persistent challenge, even as the international expansion of Chinese firms offers a counterweight. Markets now turn to September 24 for signs that the trade truce can be extended beyond its November expiry.economictimes+1