By Callum Keown

Chinese stocks were given a boost Monday as they continued to outperform U.S. equities amid signs that the world's second largest economy may prove resilient in the face of President Donald Trump's tariffs.

Beijing outlined an extensive plan to "vigorously boost" consumption Sunday. Then early Monday economic data revealed a surprisingly robust start to the year.

Alibaba's American depositary receipts -- a Barron's stock pick for 2025 -- jumped 4% on track for its highest close since November 2021 and up 72% in 2025. Rival tech companies JD.com and Baidu also made gains.

While the specter of President Donald Trump's tariffs looms large over China, the economy performed well in January and February. Retail sales jumped 4% year-over-year in the first two months of 2025, up from 3.7% in December, while industrial production rose 5.9% beating economists' expectations of a 5.4% increase.

The 30-point plan, announced Sunday, aims to "stimulate domestic demand across the board and increase spending power by raising earnings and reducing financial burdens," the General Office of the Communist Party of China Central Committee said Sunday.

Significantly, it also includes measures to stabilize the stock market and develop more bond products for individual investors -- though it was light on detail.

It's an indication that Beijing is keen to support the stock market and stimulate the economy to counteract the impact of Trump's tariffs.

In contrast, Trump has appeared apathetic at times when it comes to the stock market's recent selloff. "Markets are going to go up and they're going to go down. We have to rebuild our country," Trump said last week.

The U.S. and Chinese stock markets started the year in different places -- the S&P 500 began 2025 off the back of two consecutive years of 20%+ gains, while Chinese equities have had a more turbulent couple of years. Nonetheless, their diverging fortunes this year are stark.

Hong Kong's Hang Seng Index climbed 0.8% Monday and is now up 20% this year -- the S&P 500 is down 3.8% this year. The KraneShares CSI China Internet exchange-traded fund $(ETF.AU)$, which tracks Chinese internet companies is up 29% this year, while the Roundhill Magnificent Seven ETF has fallen 13%.

China is showing a willingness to support its stock market -- and it's working.

Write to Callum Keown at callum.keown@barrons.com

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March 17, 2025 11:26 ET (15:26 GMT)

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