Chinese Stocks Slide As Questions on Economic Development Linger

Chinese stocks slipped on Wednesday as analysts raised concerns about how the country will achieve the economic targets set at the recently-closed Two Sessions.

The Shanghai Composite Index, the main gauge of Chinese stocks, fell 0.23% or by 7.90 points to 3,371.92. The Shenzhen Component Index slipped 0.17% or by 17.94 points to 10,843.23.

China's "Two Sessions" closed on Tuesday, and concerns such as the tariffs imposed by US President Donald Trump on China and the ongoing tech wars were among those discussed, the South China Morning Post reported Tuesday.

The US was not directly mentioned in the final government report, but Beijing said it will oppose "hegemonism and power politics, unilateralism and protection in all forms," the SCMP reported.

The closing of the Two Sessions left open questions about China's plans to revive its economy, the Associated Press reported separately.

As China opened the session by setting the economic growth target at 5%, analysts have already said it would be difficult to achieve with the measures detailed during the Two Sessions, the AP said.

Among those measures include 300 billion yuan in rebates for trade-ins of cars and appliances to boost spending, the report said.

"It is unclear how much of a jolt this budget will provide to underlying domestic demand and reflation efforts, despite the sizeable rise in the deficit," the AP reported, citing Fitch Ratings Lead China Analyst Jeremy Zook.

Tuesday's closing was also the first time the chairman of the country's top legislative body was absent.

National People's Congress Chairman Zhao Leji was missing during the closing session due to a "respiratory tract infection," the SCMP reported, citing deputy Li Hongzhong.

Meanwhile, UBS downgraded China's tech sector to neutral from attractive after a year-to-date gain of 32%, Forexlive reported Wednesday.

On the corporate front, Ningxia Baofeng Energy Group finished 2% lower after posting a 12% increase in 2024 net profit to 6.34 billion yuan.

Hengdian Group DMEGC Magnetics closed 10% higher despite profit finishing flat at 1.83 billion yuan in 2024.

Hengdian Group DMEGC Magnetics' attributable profit rose about 0.5% to 1.83 billion yuan in 2024 from 1.82 billion yuan in 2023, according to a Wednesday filing with the Shenzhen Stock Exchange.

Earnings per share at the solar wafer manufacturer increased 0.5% to 1.1335 yuan from 1.1277 yuan in the previous year.

Operating income declined 6% to 18.6 billion yuan from 19.7 billion yuan a year earlier.

Shares surged 10% during Wednesday's morning trading.

Hengdian Group DMEGC Magnetics plans to invest about 2.24 billion yuan in two solar power projects in Lianyungang city in China's Jiangsu province.

Subsidiaries Dongwang Power Generation and Donggan Power Generation will develop the projects, according to a Wednesday filing with the Shenzhen bourse.

The projects are slated for completion within 12 months after construction starts. Internal rate of return for the projects is expected at nearly 7%, with payback in 11.1 years.