Word that China and the United States have agreed to cancel in phases the tariffs imposed during their months-long trade war has spurred market jumps.
"In the past two weeks, top negotiators had serious, constructive discussions and agreed to remove the additional tariffs in phases as progress is made on the agreement," a Ministry of Commerce spokesman said yesterday.
"If China and the United States reach a phase-one deal," Gao Feng added, "both sides should roll back existing additional tariffs in the same proportion simultaneously ... which is an important condition for reaching the agreement."
If confirmed by Washington, such an understanding could help provide a road map to a deal to de-escalate a trade war that has cast a shadow over the world economy. Beijing's key demand since the start of negotiations has been the removal of punitive tariffs imposed by President Donald Trump, which by now apply to the majority of Chinese exports to the United States.
Stocks rallied on the news, with the Hang Seng Index rising by 158 points to a three-month high at 27,847 points. European shares and US stock futures also jumped. And China's onshore yuan strengthened to a three-month high at 6.988 against the US dollar.
But it was not all good news. A group of US legislators have introduced a move to would block a federal retirement fund from investing in Chinese stocks.