Asian markets saw gains on Monday following Chinese plans to boost consumption in the world’s second-largest economy. This rally was also supported by optimism from a positive turn on Wall Street, driven by hopes that the U.S. Congress would approve a spending bill to avoid a government shutdown.
Attention shifted to Beijing as Chinese officials revealed a package aimed at stimulating spending among the country’s consumers, who have been struggling due to post-COVID economic challenges. The State Council announced a series of initiatives focused on increasing wage growth, providing better employment support, and encouraging increased lending for consumption. These efforts aim to address the economic stagnation that has plagued the country since the pandemic.
The newly introduced measures also include property reforms, stock market stabilization, and pension benefits. Officials plan to establish a childcare subsidy system and protect workers’ rights to rest and holidays, all in an effort to boost household income and consumption.
Despite these efforts, analysts remain cautious, particularly in light of ongoing trade tensions with the U.S. under President Donald Trump’s tariff policies. Economists from Moody’s Analytics warned that the U.S.-China trade war could dampen global trade and exacerbate deflationary pressures in China, weakening consumer spending and hindering price growth.
In the U.S., retail sales and industrial production showed better-than-expected growth in early 2025, offering some optimism for the global economy. Hong Kong’s market, buoyed by strong investments in Chinese tech firms, led the charge in the region, with Shanghai, Tokyo, Sydney, and other key markets following suit.
The rising gold prices—breaking records and nearing $3,005 per ounce—reflect concerns over Trump’s trade policies and the global economic outlook. In the U.S., optimism about avoiding a government shutdown drove Wall Street to positive gains.
Looking ahead, the Federal Reserve’s policy decisions will be in focus, as traders await economic projections and interest rate decisions amid the ongoing tariff conflict. Concerns about inflation and potential recession continue to linger.
Key Market Updates:
- Tokyo (Nikkei 225): +0.9% at 37,396.52
- Hong Kong (Hang Seng): +1.0% at 24,192.95
- Shanghai (Composite): +0.2% at 3,426.13
- Gold: $2,900 per ounce
- Crude Oil: WTI +0.6% at $67.58 per barrel; Brent Crude +0.6% at $70.98 per barrel
Markets are awaiting further developments in both U.S. policies and China’s economic strategy.
