China shares waver, HK bounces as Beijing vows more support for consumption, AI

China stocks wavered and Hong Kong shares bounced on Wednesday after Beijing set an ambitious economic growth target while pledging more support for domestic consumption and the tech industry as a trade war with the United States heats up.

The blue-chip CSI300 Index dipped 0.2% in early trade and the Shanghai Composite lost 0.3% in volatile trading, though tech shares firmed.

Hong Kong's Hang Seng Index bounced 1.7%, while the Hang Seng Tech Index climbed 1.8%.


China's top policymakers announced a 2025 growth target of roughly 5%, a record 4% deficit-to-GDP ratio, and an inflation target of 2% as expected as the National People's Congress (NPC), China's rubber-stamp parliament, began its annual meeting on Wednesday.

Among sector-specific policies, the government said it will support the application of large-scale AI models - marking the first time AI models were mentioned in the government work report - in what appeared to follow from the global fanfare over Chinese AI startup DeepSeek.

The CSI Semiconductor Index and AI index climbed 0.3% and 0.5%, respectively, to lead gains onshore.

Top policymakers also promised a "special action plan" to stimulate consumption and set aside 300 billion yuan ($41.27 billion) to support a recently-expanded consumer subsidy to revive sluggish spending at home as exports come under mounting pressure from tariffs.

"The policy direction clearly stressed support for the AI and tech sector, which is lending more help to the Hong Kong markets where they have bigger weightings," said Jason Chan, senior investment strategist at Bank of East Asia.

The tech-focused policy tone set at the parliament meeting could offer some renewed support to China's rally.

Chinese stocks listed in Hong Kong have surged as much as 31% from the January trough to a three-year high as start-up DeepSeek's launch of a low-cost AI model set off a re-rating in the beaten-down market and triggered fund rotations.

However, the run-up has started to show signs of fatigue owing to patchy economic data and an escalating tit-for-tat trade war between China and the U.S., prompting investors to book profits as risk appetite soured.

The U.S. doubled duties on Chinese goods to 20% on Tuesday and Beijing quickly responded with levies of its own.

Investors anticipating more measures to support capital markets were disappointed.

In September, the People's Bank of China rolled out two new tools to support capital markets, including a swap programme sized at an initial 500 billion yuan ($68.70 billion) - allows funds, insurers and brokers easier access to funding in order to buy stocks.