Chinese Stocks End Mixed Amid Economic Data, Tech Sector Boosts Hong Kong Shares

Chinese stocks closed mixed after Q2 GDP data showed a 5.2% YoY growth, decelerating from the previous quarter. Hong Kong's Hang Seng index rose 1.6%, while tech stocks surged 2.8%. Nvidia's announcement to resume chip sales to China boosted cloud computing and 5G stocks. Alibaba and Tencent gained 7% and 4%, respectively.

Chinese stocks closed mixed on Monday, July 2, 2025, following the release of Q2 GDP data, which showed a 5.2% year-over-year (YoY) growth rate, decelerating from the previous quarter's 5.4% [1]. The Hang Seng index in Hong Kong rose 1.6%, while tech stocks surged 2.8%. The announcement by Nvidia Corporation (NASDAQ:NVDA) that it will resume sales of its H20 artificial intelligence (AI) chip in China boosted cloud computing and 5G stocks. Alibaba Group (NYSE:BABA) (HK:9988) and Tencent Holdings Ltd (HK:0700) gained 7% and 4%, respectively.

The Q2 GDP growth rate was slightly better than economists' forecasts, which predicted a 5.1% YoY growth [1]. However, the deceleration from the previous quarter suggests that the Chinese economy is facing headwinds, particularly from trade tensions with the U.S. and a prolonged property downturn [2].

June data indicated that retail sales growth slowed to 4.8% YoY, while industrial output expanded by 6.8% [1]. Fixed asset investment grew 2.8% in the first half of this year, against estimates of a 3.6% increase [1]. The urban unemployment rate remained at 5% in June [1].

The Chinese government has been implementing stimulus measures to support the economy. In May, the central bank cut interest rates and injected additional liquidity into the market to cushion the economy from U.S. President Donald Trump's trade tariffs [1]. However, these measures may not be sufficient to tackle entrenched deflationary pressures [2].

Nvidia's announcement to resume sales of its H20 AI chip in China is expected to boost the local tech industry. The H20 chip is widely popular for AI development and is used by major Chinese tech firms like Alibaba, Tencent, and Baidu [3]. The resumption of chip sales comes amid improving trade relations between Washington and Beijing and is likely to have a positive impact on cloud computing and 5G stocks.

References:

[1] https://www.cnbc.com/2025/07/15/chinas-second-quarter-gdp-growth-slows-to-5point2percent-as-economists-warn-of-mounting-headwinds-ahead.html
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3T902U:0-china-s-economy-set-to-slow-in-q2-as-pressure-from-us-tariffs-mounts/
[3] https://www.investing.com/news/stock-market-news/hong-kong-tech-majors-rise-as-nvidia-flags-resumption-of-h20-ai-chip-sales-4134613