Economy

Hong Kong Stocks Surge: Will US-China Talks and China’s GDP Growth Sustain the Rally?

Hong Kong stocks surged 2.4% on easing trade tensions and China‘s strong GDP growth, reaching 4.8%.

byAndres Castro

October 20, 2025, 8:55 AM

An aerial view of the dense Hong Kong skyline at sunset, with the iconic ICC tower rising above the city and hazy mountains.

Hong Kong's dense urban landscape is set against a backdrop of mountains and hazy skies. By MDL.

Executive Summary

Hong Kong stocks rallied significantly on Monday, recovering from losses, driven by optimism over easing US-China trade tensions and China’s economic growth figures.

China’s gross domestic product (GDP) grew by 4.8 percent year-on-year in the third quarter, bringing cumulative growth for the first nine months to 5.2 percent, nearing its annual target.

Beijing commenced a significant closed-door meeting to finalize economic plans for the next five years, with a communique detailing these plans anticipated on Thursday.

The Story So Far

The recent rally in Hong Kong stocks and mainland Chinese markets is primarily driven by renewed investor optimism following “constructive” talks aimed at easing US-China trade tensions, alongside positive economic indicators from China, which reported a 4.8 percent GDP growth in the third quarter. Further confidence is anticipated from Beijing’s ongoing closed-door meeting, where officials are finalizing the country’s economic plans for the next five years.

Why This Matters

The significant rally in Hong Kong and mainland Chinese stocks, driven by optimism over easing US-China trade tensions and China’s stronger-than-expected 4.8% Q3 GDP growth, signals renewed investor confidence in the region’s economic stability and its ability to achieve annual targets. The ongoing closed-door meeting in Beijing to finalize its next five-year economic plans means forthcoming policy details will be crucial in shaping China’s long-term economic trajectory and influencing global market sentiment.

Who Thinks What?

Investors expressed optimism, driving a significant stock rally in Hong Kong and mainland China, fueled by easing US-China trade tensions and China’s economic growth figures.

China’s National Bureau of Statistics reported robust third-quarter GDP growth, positioning the country closer to its annual economic target, while Beijing works to finalize long-term economic plans.

Hong Kong stocks experienced a significant rally on Monday, October 20, 2025, recovering from their steepest loss since April, driven by optimism over easing US-China trade tensions and China’s economic growth figures. The benchmark Hang Seng Index jumped 2.4 percent by midday, reflecting a renewed investor confidence following “constructive” talks between the US Treasury Secretary and China’s Vice-Premier.

Market Performance

The Hang Seng Index closed the noon session up 2.4 percent at 25,854.98. The technology sector also saw strong gains, with the Hang Seng Tech Index surging 3.2 percent.

Mainland Chinese markets mirrored the positive sentiment. The CSI 300 Index rose 0.8 percent, and the Shanghai Composite Index added 0.7 percent.

Individual Stock Movements

Among individual stocks, NetEase saw a 5.5 percent increase to HK$236, while insurance giant AIA Group added 4.4 percent, reaching HK$72.10. Alibaba Group Holding also posted a 5 percent gain, trading at HK$162.10.

Conversely, some companies experienced declines. Jewellery maker Chow Tai Fook fell 1.6 percent to HK$16.25, and Chinese real estate developer Longfor Group Holdings lost 1.4 percent, closing at HK$10.26.

China’s Economic Growth and Policy Outlook

Adding to the market’s positive momentum, China’s gross domestic product (GDP) grew by 4.8 percent year-on-year in the third quarter. This data was released on Monday by the National Bureau of Statistics (NBS).

The third-quarter performance brings the cumulative GDP growth for the first nine months of the year to 5.2 percent, positioning China closer to achieving its annual economic target.

Beijing also commenced a significant closed-door meeting on Monday to finalize economic plans for the next five years. A communique detailing these plans is anticipated to be released on Thursday, offering further insights into China’s long-term economic strategy.

Outlook

The market’s rebound underscores investor sensitivity to both trade relations and economic fundamentals. With key policy decisions on the horizon from Beijing, the coming days are expected to provide further direction for China’s economic trajectory and its impact on global markets.