London Daily

Focus on the big picture.
Friday, Apr 03, 2026

An epic year of market events shook China, Hong Kong and Taiwan

An epic year of market events shook China, Hong Kong and Taiwan

China, Hong Kong and Taiwan’s economies were among the first to suffer from the virus pandemic. They were also home to some of the most dramatic events in global financial markets this year.

Take China’s equity market, whose value topped $10 trillion for the first time since the 2015 crash and where a liquor-maker became the country’s most valuable stock. The yuan tested a record low offshore before commencing a rally that some say could take the currency to levels not seen since 1993.

In Hong Kong, colonial stalwart HSBC Holdings PLC fell to its lowest price since 1995 before becoming one of the city’s best trades. Record foreign inflows into Taiwan’s technology shares were so intense that the central bank had to intervene almost daily to rein in its strongest currency in more than two decades.

Here are some of the year’s biggest financial-market events in China, Hong Kong and Taiwan, a region at the forefront of the global recovery.

Comeback currency


Concern over the impact of COVID-19 on China’s economy triggered a slump in the yuan from mid-January. The currency tested its all-time low in offshore trading just four months later. But in the half-year since, it has surged to near the 6.5 mark, with Citigroup Inc. chief China economist Liu Li-gang predicting it could rally past 6 next year — a level it hasn’t breached since 1993. Capital inflows into stocks and bonds are also boosting the yuan, posing a challenge to China’s central bank, which doesn’t want a stronger currency to harm an export-driven recovery.

Ant squashed


Days before Ant Group Co. was due for the biggest stock market debut ever seen, Chinese regulators abruptly halted the $35 billion initial public offering. Many observers concluded that the move was aimed at humbling both the Alibaba Group Holding Ltd. behemoth and its founder, billionaire Jack Ma, who at a Shanghai conference in October criticized China’s state-owned banks. The immediate reaction in the financial market reduced Ma’s fortune by almost $3 billion. Beijing last month also issued rules to root out internet monopolies and began scrutinizing investments in new energy vehicles.

Bust to boom


Resuming trade after an extended Lunar New Year break as the coronavirus outbreak worsened, Chinese equities were hit by a brutal wave of selling in February. More than 3,000 stocks went limit down in their worst day since the 2015 bubble burst. At that point it would have taken a strong stomach to predict that only five months later, China’s recovery in the face of the virus would propel a frenzy that would add $1 trillion to the market’s value in an 8-day period. That rally set the stage for the stock market to finish out the year stronger than it started.

Chinese defaults


A spate of defaults by China’s state-linked firms took investors by surprise in November, after months of support to curb the fallout of the coronavirus helped prevent a wave of payment failures earlier in the year. A focus on state-owned enterprises marks a shift away from private firms to the mammoth state sector — these borrowers dominate the nation’s onshore bond market and were once considered guaranteed to receive a bailout. The historic repricing of risk among weaker-rated SOEs has some investors now seeing 2021 as a potential inflection point for the emergence of a genuine credit risk mechanism in the world’s second-largest bond market.

H.K. markets steady


Beijing’s passing of a sweeping national security law in June elicited global condemnation, but it has been mostly business as usual for markets in the former British colony. While the benchmark Hang Seng Index is down by 6% this year, capital inflows have remained steady and a record number of companies raised $1 billion or more from initial public offerings, including JD Health International Inc.’s $3.5 billion December listing. The Hong Kong dollar has remained strong in the face of economic and political pressure, including when U.S. President Donald Trump aides aired the idea of undermining its peg to the greenback. The city’s de facto central bank undertook a record intervention to prevent the Hong Kong dollar strengthening past the permitted range with its U.S. counterpart.

Taiwan tensions?


Concerns about a possible Chinese military invasion were heightened, but you wouldn’t know it from looking at Taiwan’s markets. Chipmaker Taiwan Semiconductor Manufacturing Co. briefly entered the world’s top 10 companies by market value and its shares are up more than 50% this year. The domestic benchmark stock index has been hitting record highs since July, surpassing the 14,000-point level for the first time in early December. The Taiwan dollar has recently reached its strongest level against the U.S. dollar since 1997, with the central bank apparently shifting from its previous “smoothing” strategy to a managed appreciation.

Shot: HSBC. Chaser: Moutai.


One of the most whiplash-inducing rebounds of the year was HSBC, which ran afoul of U.K. regulators, core investors and Chinese officials and saw its Hong Kong shares lose more than 50% of their value between February and late September. It promptly bounced back as much as 55% on better-than-expected third quarter results and a plan to return to dividend payouts, making it one of Hong Kong’s best-performers in the fourth quarter. And then a moment befitting 2020: baijiu distiller Kweichow Moutai Co Ltd. dethroned Industrial & Commercial Bank of China Ltd. as the biggest mainland stock by market value.

Newsletter

Related Articles

0:00
0:00
Close
Trump’s Strategic Pressure on UK Seen as Push for Stronger Alignment and Fairer Terms
UK Focuses on Trade Finance to Secure Critical Materials for Defence and Energy Sectors
Majority of UK Businesses Hit by Middle East Conflict While Confidence Holds Firm
UK Royal Navy Faces Renewed Scrutiny as Debate Intensifies Over Capability and Readiness
Reform UK Faces Mounting Distractions as Policy Agenda Struggles to Gain Traction
Investigation Launched Into Northern Cyprus IVF Clinics After UK Families Receive Incorrect Sperm
International Meeting Issues Unified Call to Safeguard Navigation Through Strait of Hormuz
Potential Strait of Hormuz Closure Raises Concerns Over UK Food and Medicine Supply Chains
UK Leads Coalition of Over Forty Nations Urging Iran to Reopen Strait of Hormuz
UK Secures Tariff-Free Access for Medicines in Landmark US Pharma Trade Agreement
King Charles III Invited to Address Joint Session of U.S. Congress in Rare Diplomatic Honor
Debate Grows Over Whether Expanded North Sea Drilling Can Reduce UK Energy Bills
UK Faces Heightened Risk of Jet Fuel Shortages, Airline Chief Warns
UK Ends Police Investigations into Lawful Social Media Posts After Review Finds Overreach
Abramovich Moves to Establish Charity for Frozen Chelsea Sale Proceeds Amid UK Dispute
Starmer Reaffirms NATO Commitment While Responding to Trump’s Strategic Critique
UK Aid Reductions Raise Fears of Severe Human Impact Across Parts of Africa
UK Signals Renewed Push for EU Cooperation as Iran Conflict Reshapes Security Landscape
Bank of England Signals Caution as Bailey Advises Markets Against Expecting Rate Hikes
UK to Convene Global Coalition to Restore Shipping Through Strait of Hormuz
Trump Signals Possible NATO Reassessment, Emphasizes Stronger U.S. Strategic Autonomy
Australia Joins British-Led Efforts to Reopen Strait of Hormuz Amid Escalating Tensions
King Charles Plans US State Visit as UK Strengthens Ties with Trump Leadership
UK Regulator Launches Investigation Into Microsoft’s Business Software Practices
Kanye West Set for High-Profile Return to UK Stage at Wireless Festival
Trump Presses Europe to Strengthen Commitment as Iran Conflict Escalates
UK to Deploy Additional Troops to Middle East Amid Rising Regional Tensions
UK Authorities Face Claims of Heavy-Handed Measures in Monitoring Released Pro-Palestine Activists
Trump Calls on UK to Secure Its Own Energy as Iran Conflict Intensifies
Nigel Farage Declines Invitation to UK Conservative Conference Led by Liz Truss
Trump Warns Allies to Take Responsibility as Rift Deepens with UK and France Over Iran Conflict
How Britain’s Prime Minister Controls U.S. Bomber Access in Escalating Iran Conflict
Trump Urges Allies to Secure Their Own Oil Supplies as Hormuz Crisis Disrupts Global Energy
Russia Expels British Diplomat as UK Pushes Back Against Pressure
White House App Faces Scrutiny After Claims of Continuous User Location Tracking
BBC Faces Scrutiny Over Allegations of Paid Content Linked to Saudi Arabia
UK-France Coastal Patrol Agreement Nears Breakdown Amid Migration Pressures
UK Police Detain Pro-Palestine Activist Again Weeks After Bail Release
FTSE 100 Advances as Energy and Mining Shares Gain Amid Middle East Tensions
Eli Lilly Seeks UK Pricing Deal to Unlock Renewed Pharmaceutical Investment
Three Arrested in UK After Massive Cocaine Haul Discovered Hidden in Banana Shipment
UK Fuel Prices Poised for Further Surge Amid Global Energy Pressures
Apple Subsidiary Penalized by UK Authorities for Breach of Moscow Sanctions
Western Allies Intensify Coordinated Sanctions Strategy Against Russia
UK Lawmakers Face Criticism Over Renewed Push for Social Media Restrictions
Starmer Signals UK Crackdown on Addictive Social Media Features
Rising Costs Push One in Five UK Hospitality Businesses to the Brink of Closure
Man Arrested on Suspicion of Attempted Murder After Car Strikes Pedestrians in UK, Injuring Seven
Escalating Conflict Involving Iran Tightens Fiscal Pressures and Highlights UK Economic Vulnerabilities
UK Moves to Confront Russian ‘Shadow Fleet’ Operating in Its Waters
×