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Zhang Shidong

The coming meeting between President Xi Jinping and his US counterpart Donald Trump is on the radar of market traders in mainland China and Hong Kong, as the results – whether smiling handshakes or a tense test of wills – could add volatility to an already unpredictable market.
However, observers said current expectations for substantial results from the meeting are minimal – so much so that investors have placed the event low on their hierarchy of variables likely to jolt stocks.
Many stock traders are paying less attention to the sit-down scheduled for September 24 in the US than they did to Trump’s state visit to China in May, even as signs of a flare-up of tensions between the world’s two largest economies are emerging.
It is widely expected that the two leaders will extend the current trade agreement and sign some industry-specific pacts, while key structural issues and differences will remain unresolved.
“Investors should not be too excited about Xi’s trip to the US, given we do not expect any outcome which is materially supportive for China’s or Asia’s equity markets,” said William Bratton, head of cash equity research for Asia-Pacific at BNP Paribas.
“Our base case expectations for the trip are an ongoing commitment to ‘constructive strategic stability’, the finalisation of earlier agreed trade commitments and an extension of the [tariff] truce.”
Stock reactions have been subdued in the run-up to the leadership summit. Mainland China’s CSI 300 Index has dropped nearly 4 per cent over the past month, while Hong Kong’s Hang Seng Index has retreated 1 per cent, largely reflecting fears of monetary tightening in the US.
The two benchmarks rose at least 3 per cent preceding the last sit-down in May.
At the expected meeting in Washington during his three-day US visit, Xi may be accompanied by top business leaders in technology, electric vehicles and aerospace – matching the delegation of US CEOs Trump brought to China, the South China Morning Post reported last week.

The top-level talks were expected to focus on trade, technology and geopolitics, with the aim of managing stabilisation beyond the tariff truce, keeping dialogues alive and stabilising relations before key political events such as the US midterm elections in November, according to Barclays.
The offshore Chinese yuan strengthened by an average of 0.15 per cent against the US dollar one month before the Xi-Trump meetings during 2017 and 2026, it added.
Tensions between Beijing and Washington have been lingering ahead of the meeting. The US is mulling a 7.5 per cent tariff on Chinese imports for alleged manufacturing overcapacity and a new rule to restrict China’s access to sophisticated artificial intelligence chips through data centres. At the G20 finance summit, China refused to endorse a joint communique after disagreement about the rhetoric on trade surplus.
“Despite low expectations of a major breakthrough, we see a reinforcement of the current status quo of stabilisation following Trump’s earlier visit to China in May,” said UBS Global Wealth Management’s chief investment office.
“While larger structural issues aren’t likely to be resolved, this would still mark a slightly positive outcome that shows the current framework is holding.”
Offshore investors held a mildly upbeat outlook for Chinese stocks after the leadership summit, with 46 per cent of those surveyed expecting modest gains in the following month, according to a survey released by Goldman Sachs on Monday.
“Our baseline remains that US-China relations are likely to stabilise rather than materially improve or deteriorate,” the investment bank said. “Both sides have incentives to avoid renewed escalation, but strategic competition over trade, technology, and national security is likely to persist.”
Goldman expected a “managed, albeit fragile, detente”, with targeted agreements possible but a broader improvement of relations unlikely.


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Hope for material results is slim, but investors remain wary of volatility as banks forecast ‘fragile detente’ will continue


Hope for material results is slim, but investors remain wary of volatility as banks forecast ‘fragile detente’ will continue.


Handshake or arm-wrestling match? What China’s stock traders expect from Xi-Trump meeting

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Hope for material results is slim, but investors remain wary of volatility as banks forecast ‘fragile detente’ will continue

Hope for material results is slim, but investors remain wary of volatility as banks forecast ‘fragile detente’ will continue