Asian markets advanced Monday after Federal Reserve chief Jerome Powell said officials would take a careful approach to rate hikes, while Chinese shares soared after the government cut the duty on trades.

In a much-anticipated speech Friday, the US central bank boss left the door open to more tightening but repeated his pledge that decision-making would be data-dependent as policymakers try to bring inflation to heel.

Powell's comments suggested borrowing costs would be held at a 22-year high of 5.25-5.5 percent next month, though investors remain concerned more could come before year's end.

While inflation is coming down, markets have been hit in recent weeks by a strong run of economic data — particularly on jobs — that has been seen as putting pressure on the Fed to keep hiking interest rates.

"If the data continues to show an ease in labour market tightness and price pressures, then the Fed is likely done with its tightening cycle," said National Australia Bank's Rodrigo Catril.

"If the data doesn't play ball, then further tightening should be expected. Thus, upcoming key market data releases (inflation and labour market) are likely to set the tone for markets over coming months."

Analysts said the focus on data meant this week's inflation and jobs figures take on even more significance.

The remarks sent US stocks lower initially before they bounced back to end Friday on a positive note.

And Asia followed suit Monday, with Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Seoul, Taipei, Mumbai, Bangkok, Jakarta and Wellington all enjoying a strong start to the week.

Paris and Frankfurt both rose in the morning. London was closed for a holiday.

Shanghai was boosted by China's decision to slash the tax paid on stock trades for the first time since 2008 as authorities battle to support the world's second-largest economy.

The Ministry of Finance and its State Taxation Administration said in a joint statement the move was designed to "invigorate the capital market and boost investor confidence".

Officials also said they would slow the pace of new listings, which usually suck up market liquidity.

– 'Positive signal' –

The measures provided some joy among traders and come as Chinese leaders struggle to kickstart the stuttering economy, with a series of pledges failing to lift optimism.

"The scale, force and speed of the measures all beat expectations," said analysts at China International Capital Corp.

"The increasing force of the policy tools will lift market confidence, amplifying the positive signal for the market."

However, the gains in China were well off their initial five percent advance owing to ongoing worries about the economy.

Neo Wang at Evercore ISI warned that stocks were unlikely to rally unless authorities announce a huge stimulus package similar to the so-called "bazooka" in 2008.

Investors are also keeping tabs on US Commerce Secretary Gina Raimondo's talks with Chinese counterparts in the latest bid to ease trade tensions between the world's two largest economies.

Raimondo's visit — which will last until Wednesday — is the latest in a series of high-level trips to China by US officials in recent months and could culminate in a meeting between presidents Joe Biden and Xi Jinping.

Hong Kong also saw the restart of trading in troubled Chinese property giant Evergrande after a 17-month suspension for not publishing its financial results.

The firm collapsed more than 80 percent in the morning, having finally released its earnings Sunday, showing losses of $4.53 billion in the first half of the year and just $556 million in cash assets.

Once China's largest real estate firm, Evergrande defaulted in 2021 and is saddled with more than $300 billion in liabilities, becoming a symbol of a nationwide property crisis that many fear could spill over globally.

US commerce secretary meets Chinese counterpart in Beijing
Beijing (AFP) Aug 28, 2023 –

US Commerce Secretary Gina Raimondo met with her Chinese counterpart in Beijing on Monday, saying it was "profoundly important" for the world's two biggest economies to have a stable relationship.

Her visit is the latest in a series of high-level trips to China by US officials in recent months as Washington works to cool trade tensions with Beijing.

The trips could culminate in a meeting between their leaders, with US President Joe Biden saying recently that he was expecting to sit down with China's Xi Jinping this year.

Raimondo met on Monday morning with Chinese Commerce Minister Wang Wentao, describing the economic relationship between the two countries as "the most significant in the world".

"We share $700 billion dollars of trade and I concur with you that it is profoundly important that we have a stable economic relationship," she said, according to a readout from the US Commerce Department.

"It's a complicated relationship; it's a challenging relationship," she told Wang.

"We will of course disagree on certain issues, but I believe we can make progress if we are direct, open, and practical."

Raimondo arrived in Beijing on Sunday and was met by Lin Feng, the director of the commerce ministry's Americas and Oceania department, as well as US ambassador to China Nicholas Burns.

In posts on the social media platform X, Raimondo said she was "looking forward to a productive few days".

During her trip, she will also travel to China's economic powerhouse Shanghai, the US Commerce Department said. She will leave on Wednesday.

– Trade tensions –

Relations between the United States and China have plummeted to some of their lowest levels in decades, with US trade curbs near the top of the laundry list of disagreements.

Washington says they are crucial to safeguarding national security, but China sees them as seeking to curb its economic rise.

This month, Biden issued an executive order aimed at restricting certain US investments in sensitive high-tech areas in China — a move Beijing blasted as being "anti-globalisation".

The long-anticipated rules, expected to be implemented next year, target sectors such as semiconductors and artificial intelligence.

US Treasury Secretary Janet Yellen sought to reassure Chinese officials about the expected curbs during a visit to Beijing last month, promising that any new moves would be implemented in a transparent way.

And Raimondo on Monday told Chinese officials that while there was "no room to compromise or negotiate" on US national security, "the vast majority of our trade and investment relationship does not involve national security concerns".

"We believe a strong Chinese economy is a good thing," she said.

In June, US Secretary of State Antony Blinken travelled to Beijing, where he met Xi and said progress had been made on a number of key sources of contention. US climate envoy John Kerry also visited China in July.

But none of the visits led to major breakthroughs, and a recent Camp David summit between the United States, South Korea and Japan aimed in part at countering China sparked condemnation from Beijing.

Following that summit, Biden said he still expected to meet Xi this year.

The US president is inviting the Chinese leader to San Francisco in November, when the United States holds a summit of the Asia-Pacific Economic Cooperation forum, which includes China.

They could also potentially meet next month in New Delhi on the sidelines of a G20 summit.