China stocks fall as Trump-Xi meeting yields little relief on key tensions

According to Business Recorder, China's blue-chip index dropped more than 2% on Monday to its lowest level in a year as hopes around the US-China summit faded. Technology shares led the slide after Washington moved to curb the use of Chinese-made parts in AI data centres, and trading turned cautious before a week-long holiday starting October 1.

The CSI300 slid 2.2% by the lunch break, heading for its weakest showing in five weeks and touching a level last seen in early September 2025. The Shanghai Composite fell 1.7%, while Hong Kong stocks rose 0.6% during part of the Golden Week holiday. Beijing said a two-month extension of its trade truce with Washington would give both sides room to assess how their arrangement is being implemented.

OCBC Bank said the two powers remain divided on technology, security, trade and the wider framework of international governance, despite the summit's upbeat optics. A bipartisan group of US lawmakers also introduced a bill on Friday to bar federal systems from using Chinese-made data transmission parts in AI data centres, and Eoptolink Technology dropped 7% in Shenzhen while Innolight Technology slid roughly 9% across Shenzhen and Hong Kong. Slower industrial profit growth in August added to the gloom, while Middle East tensions and a busy US data calendar keep uncertainty high during the holiday.