Shares of Tencent Holdings (TCEHY) rallied on Wednesday, up 4% as of 3:48 p.m.
Yesterday, there wasn’t much news specific to the Chinese tech giant. Yet, optimistic comments from U.S. Treasury Secretary Scott Bessent sparked renewed optimism about trade negotiations between the U.S. and China. Consequently, many major Chinese technology stocks surged today, with Tencent seeing particularly significant gains.
China and U.S. negotiators to meet in Sweden
Yesterday in an interview, Bessent mentioned that he will be in Stockholm on both Monday and Tuesday, where he will collaborate with his Chinese counterparts. It appears they are discussing a potential extension at that time.
On May 12th, the U.S. and China decided to reduce their reciprocal tariffs, which had grown to triple digits due to China’s response to President Trump’s “Liberation Day” tariff proclamation in April. This reduction of tariffs was arranged to facilitate trade discussions, as the deadline for these talks, set for August 12th, draws near.
During the negotiations, there have been a few bumps in the road, like when President Trump claimed China was going back on promises to expedite deliveries of essential rare earth materials. This might have raised doubts about whether an agreement could be finalized in time. However, Bessent’s remarks yesterday were reassuring.
Tencent would benefit from a China recovery
During the past three years of quasi-recession in China, Tencent has skillfully managed its business operations, demonstrating significant growth across all sectors recently. As a tech giant encompassing mobile games, social media, streaming video and music, fintech, and cloud services, Tencent is strategically placed to capitalize on artificial intelligence advancements.
The optimism surrounding trade talks might positively impact the Chinese economy, and the recent speculation that Nvidia may resume shipping H20 GPUs to China could potentially bolster share prices. Investors will gain more insights regarding these developments when Tencent releases its Q2 earnings on August 13.
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2025-07-24 00:00