Chinese bourses saw extended selling after the EU unveiled steep tariffs of between 17% to 30% on the import of Chinese electric vehicles. The EU trailed the U.S. in imposing tariffs on Chinas fast-growing EV sector. But unlike the U.S., the EU does represent a major market for Chinese EV makers. The tariffs ramped up concerns that the EU and the U.S. could impose more restrictions on Chinese imports, while Beijing could also announce retaliatory measures, denting relations between the worlds largest economies.
Asian equity markets were mixed on Friday, struggling for clear direction as investors weighed cooler-than-expected US inflation figures against a revised path for Federal Reserve interest rate cuts. The Shanghai Composite however managed to edge higher by 0.12% to close at 3,033 while the Shenzhen Component gained 0.5% to 9,252 on Friday as risk sentiment improved, although mainland stocks still declined for the fifth straight week as signs of economic weakness and the lack of fresh stimulus measures in China dampened investor confidence.
During the week, data showed consumer prices in China rose less than expected in May, while producer prices remained deflationary. China's vehicle sales increased 1.5% year-on-year in May, down from a 9.3% rise in April, according to the China Association of Automobile Manufacturers. Sales of new energy vehicles surged by 33.3%, and the China Passenger Car Association reported that new energy vehicles made up 46.7% of total car sales, a new monthly record. For the first five months of the year, vehicle sales grew 8.3%, with new energy vehicles up 32.5%.
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