FX.co ★ China Stocks Plunge as Trade War Escalates

The Shanghai Composite Index suffered a substantial decline, plummeting over 5% to dip below the 3,200 mark, while the Shenzhen Component tumbled 7.3% to 9,610 during post-holiday trading on Monday. This downturn in mainland stocks mirrored a global market selloff, exacerbated by an intensifying trade war that has fueled concerns of a looming global recession. In the wake of the United States increasing tariffs on Chinese products to 54% last week, China announced retaliatory measures on Friday, imposing a 34% levy on all American imports, opting to escalate tensions rather than returning to negotiations. On Sunday, President Trump reiterated that the U.S. would continue with his planned tariffs unless the trade imbalance with China is rectified. Across the board, sectors experienced losses, particularly affecting major market players such as Contemporary Amperex, which fell 9.8%, East Money with a 6.3% decrease, BYD Company dropping 7.4%, Kweichow Moutai declining 2.9%, and Zijin Mining plunging 10%.