Chinese stocks experienced a slight decline as investors adopted a cautious stance ahead of the upcoming trade discussions between the world’s two largest economies this weekend.

The CSI 300 Index onshore benchmark finished Friday’s morning session down 0.2%, while an index of Chinese companies listed in Hong Kong saw a dip of 0.3%. Despite this downturn, both indices remain close to reversing losses from when President Donald Trump announced tariffs reaching as high as 145% on Chinese goods last month.

The prevailing cautious sentiment comes as Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer get ready to meet with Chinese Vice Premier He Lifeng in Switzerland for trade negotiations this weekend. Trump indicated that should discussions yield positive results, he might consider easing the tariffs on China.

While these talks aim to ease the tariff dispute, expectations for a swift resolution remain low. Reflecting ongoing investor anxiety, the markets largely disregarded recent data showing unexpected export growth in China for April, despite the tariffs imposed by Trump.

“China continues to face significant uncertainty regarding a deal with the US, and the long-awaited stimulus has been limited so far,” remarked Patrick Pan, equity strategist at Daiwa Capital Markets Hong Kong, adding that even if the CSI 300 rebounds later, “I won’t be overly optimistic due to the ongoing concerns.”

The onshore benchmark experienced gains in the last three sessions, supported by stimulus measures from Chinese authorities, which included interest rate reductions and lower bank reserve requirement ratios.

© 2025 Bloomberg

Follow Moneyweb’s comprehensive finance and business news on WhatsApp here.