Hong Kong Markets Surge on China Stimulus Hopes and U.S. Fed Uncertainty

Hong Kong Markets Surge on China Stimulus Hopes and U.S. Fed Uncertainty

Hong Kong, China – January 13, 2026

Hong Kong Markets Surge on China Stimulus Hopes and U.S. Fed Uncertainty – The financial heart of Asia experienced a dramatic surge today as the Hang Seng Index climbed 1.3%, closing at 26,608.48.

This bullish movement reflects a complex convergence of factors: growing expectations for a massive “New Year” stimulus package from Beijing and a flight of capital away from U.S. assets following the shocking Department of Justice probe into Federal Reserve Chair Jerome Powell.

While the West grapples with institutional instability, investors in Hong Kong and Shanghai are increasingly betting on the “Dragon’s Resilience,” fueled by rumors of a multi-trillion yuan liquidity injection aimed at stabilizing China’s post-property-crisis economy.

The “New Year” Stimulus: Decoding the PBOC’s Next Move

The primary driver of today’s market enthusiasm is the anticipation of a major policy announcement from the People’s Bank of China (PBOC).

Secretive reports from financial circles in Beijing suggest that the central bank is preparing to slash the Reserve Requirement Ratio (RRR) by another 50 basis points, potentially unlocking trillions of yuan in lending capacity.

This follows a significant 1.1 trillion yuan reverse repo operation conducted last week, which signaled the PBOC’s commitment to maintaining “ample liquidity” as the Lunar New Year approaches.

The Ministry of Commerce has already hinted that 2026 will be defined as a year of “aggressive demand stimulus.”

Unlike previous cycles focused on infrastructure, this “15th Five-Year Plan” rollout is expected to target household consumption directly through massive trade-in programs for electric vehicles (EVs) and high-tech appliances.

By shifting focus from the “supply side” to the “absorption side,” Beijing hopes to finally break the cycle of subdued consumer confidence that has plagued the domestic economy since the property downturn of 2024.

The “Donroe” Repulsion: Capital Shifts East

The instability in Washington has created a “repulsion effect” for global capital.
The DOJ’s criminal probe into Jerome Powell—viewed by international investors as a direct assault on the independence of the world’s most powerful central bank—has added a significant “risk premium” to U.S. Treasuries and the dollar.

As a result, institutional funds are rotating back into Asian equities, which are perceived as relatively undervalued after two years of volatility.

“We are seeing a historic reallocation,” says a senior analyst at a major Hong Kong brokerage.

“The uncertainty of the ‘Donroe Doctrine’ and the legal war on the Fed are making the disciplined, state-led growth model of China look like a safe harbor for the first time in years.”

Tech giants like Kuaishou and Baidu led the rally, with Kuaishou jumping 17% as investors bet on the continued commercialization of AI—a sector where China is rapidly closing the gap with U.S. competitors despite ongoing export bans.

Trade War 2.0: Preparing for the Storm

Despite the market rally, the shadow of a renewed trade war looms large. The Trump administration has signaled that a 60% tariff on Chinese goods remains a “live option” to address the trade deficit.

Beijing’s response, as outlined in the latest National Commerce Work Conference, is to build a “unified national market” that is less dependent on Western demand.

This “Fortress China” strategy involves tighter oversight of outbound investment and a focus on “high-quality growth” that prioritizes technological self-reliance.

The surge in industrial metals, with copper jumping to $13,000 a ton, further underscores the market’s belief in a massive Chinese industrial rebound.

As the “barometer of the global economy,” copper’s performance suggests that while the West may be cooling due to political friction, the East is preparing for a period of intense resource consumption and industrial upgrading.

Philosophical Insight: The Transcendent Market

In the philosophical school (The Non-Self), the current market surge can be viewed as the emergence of a “Transcendent Market Ego.”

For years, the Asian markets were defined by their reaction to the U.S. “Self”—every move in Washington dictated a move in Hong Kong.

However, we are witnessing the birth of a market that is beginning to find its own identity, one that transcends Western influence.

By focusing on its internal demand and technological sovereignty, the “Dragon” is shedding its dependence on the external “Other,” moving toward a state of economic “Self-realization.”

Key Headline Points:

 • Hang Seng Rally: The index gains 1.3% as capital flees U.S. political instability for Asian safe-havens.

 • Stimulus Rumors: PBOC expected to cut RRR and interest rates to boost household demand.

 • AI Dominance: Chinese tech firms lead the surge, fueled by breakthroughs in domestic AI commercialization.

 • Commodity Boom: Copper prices hit $13,000 a ton, signaling a massive industrial ramp-up in China.