Asia-Pacific shares slide amid “anxiety” over US tariffs, recession

Hi everyone. I’m Stephanie LI.Coming up on today’s programAsia-Pacific markets plummeted as U.S. tariff tensions spark recession fears;South China’s Guangxi proposes China-ASEAN AI innovation cooperation center.Here’s what you need to know about China in the past 24 hoursMost Asia-Pacific stock indexes slid on Tuesday, following a plunge in US stock markets on Monday US time, as anxiety over the US government's tariff policy and a potential recession in the world's largest economy continued to spread, according to media reports.On Tuesday, the MSCI Asia-Pacific Index sank 2.1 percent to a five-week low before paring losses to close 0.72 percent lower. Japan's Nikkei 225 ended the day 0.64 percent lower, paring steeper losses earlier in the session, while South Korea's Kospi dropped 1.28 percent. Australia's S&P/ASX 200 closed 0.91 percent lower, reversing course from gains in the previous session.Hong Kong's Hang Seng Index was flat in its final hour, while the Chinese mainland's benchmark Shanghai Composite Index was up 0.41 percent. The Taiex index in China's Taiwan region closed down 1.73 percent, paring losses from an over 3 percent drop earlier in the session.In Southeast Asia, Philippine shares led the declines by 2.42 percent, followed by Singapore (-1.88 percent) and Malaysia (-1.06 percent), while Vietnam’s VN-Index rose 0.17 percent and Thailand’s SET Index gained 0.87 percent.The losses in most Asia-Pacific stock markets came after a sell-off on Wall Street on Monday, when the S&P 500 shed 2.7 percent, touching its lowest level since September at one point.The widespread sell-off was "mostly driven by anxiety about the impact" of the US government's tariff policy. US president Donald Trump’s refusal on Sunday to rule out the possibility of a US recession has rattled investors in the world.Some US financial institutions have also raised the alarm about the growing risk of an economic downturn in the US. Goldman Sachs recently hiked its odds of a recession in the US from 15 percent to 20 percent.Notably, US-based multinational investment bank Citigroup on Tuesday downgraded US equities to neutral from overweight while upgrading China to overweight.Chinese shares look attractive even after their recent rally, the Citi strategists wrote, citing DeepSeek's artificial intelligence technology breakthrough, the government's support for the tech sector and still-cheap valuations.Meanwhile, concerns over adverse impact from the US tariffs came after the US administration imposed a series of back-and-forth tariff moves against its major trade partners since January, including 25 percent tariffs on imports of steel and aluminum, another 10 percent tariff on imports from China and so-called "reciprocal" tariffs, moves that have drawn strong responses from other countries.China’s Ministry of Commerce and other departments summoned Walmart on Tuesday for reportedly requiring some of its Chinese suppliers to slash prices significantly in an attempt to shift the burden of the US tariffs on China to Chinese suppliers and consumers, media reported on Wednesday. The China Chamber of Commerce for Import and Export of Textiles has also urged major US retailers to address international trade issues fairly and reasonably, after receiving reports from some member companies that large US retailers are asking Chinese suppliers to lower prices. The chamber is currently verifying the situation. If confirmed, it will take proactive measures to safeguard the legitimate rights and interests of its members.China is promoting university-enterprise collaboration on employment and education projects in “artificial intelligence”application. China's education ministry recently released a notice, calling for universities and local authorities throughout China to collect a range of AI application projects from businesses, organizations and industry groups. The collected projects focus on three key areas: targeted talent training, employment internship bases, and workforce development through university-enterprise collaboration. Emphasis will be placed on talent needs in fields such as AI algorithms, machine learning, natural language processing, computer vision, intelligent robotics and the use of AI tools.GBA ExpressHong Kong's investment promotion arm announced that its two flagship events will merge for their 10th anniversary in November. The Hong Kong FinTech Week and StartmeupHK Festival will take place from November 3 to 7, according to Invest Hong Kong. The convergence of the two events will create an expanded platform for technology and business impact, underscoring Hong Kong’s dedication to the digital economy.Over 1,150 young talents from more than 20 countries, including Germany, Russia, and India, flocked to the Qianhai International Talent Hub during the weekend for the Greater Bay Area's largest international recruitment event. Organized under the guidance of the Shenzhen Municipal Science and Technology Innovation Bureau and the Public Security Bureau, the fair saw 40 leading companies, such as Tencent, OPPO, SF Express, and Insta360, who offer 1,200 high-quality positions targeting foreign talent.  Guangdong has pledged to support the development of large models and application solutions in the industrial sector, selecting 10 benchmark cases at most annually for rewards of up to 8 million yuan each. Under the new policy framework, the province will prioritize funding for key technological breakthroughs. For instance, manufacturing innovation centers in AI and robotics that meet national or provincial standards will receive up to 50 million yuan and 10 million yuan in financial support, respectively. A maximum incentive of 30 million yuan will be granted to national champion enterprises and 20 million yuan for national "little giant" enterprises.Chinese EV maker Avatr Technology, backed by battery giant CATL, state-owned Changan Automobile and technology giant Huawei, is reportedly planning to raise up to HK$7.8 billion through an initial public offering in Hong Kong, with a listing application expected as early as the second half of the year.Hong Kong's Cathay Pacific Airways reported a marginal rise in its full-year profit, following a stronger second half due to a holiday-season boost in travel demand and lower fuel prices. Hong Kong's flagship airline posted a 1 percent rise in its net profit of HK$9.89 billion for 2024. The company's revenue for the year jumped 10.5 percent to HK$104.37 billion, driven by elevated cargo demand and higher cost efficiencies.Asia-Pacific HighlightsNPC deputies from the delegation of South China's Guangxi have put forward a motion to establish a China-ASEAN AI Innovation Cooperation Center in Guangxi during the two sessions in Beijing. It aims to foster a closer China-ASEAN community with a shared future while driving high-quality economic and social development in Guangxi. The motion calls for strengthened policy guidance and support to establish an AI industry ecosystem oriented toward ASEAN. It suggests further increasing support for Guangxi's AI industry, particularly by providing more incentives for AI infrastructure development and fund allocation. These measures aim to lower innovation costs for enterprises and accelerate AI research, development and application.Voices of ASEANTan Kong Yam, professor at Singapore's Nanyang Technological University and former chief economist of the Singapore government, praised China's decision to set a 5 percent GDP growth target this year as a "confidence-boosting signal" amid external risks and domestic challenges. Speaking to 21st Century Business Herald, Tan noted that the target reflects China's focus on balancing economic stability, financial risk management, and structural reforms. The Chinese government's emphasis on "more proactive fiscal policies" to sustain growth and address debt risks was also highlighted. Tan said China has sufficient tools to manage these challenges while fostering consumer and business confidence.China's rapid AI development and focus on "new productive forces" were seen as pivotal to upgrading industrial capabilities and countering external technological pressures. Tan predicted that China-ASEAN collaboration in AI, robotics, and green energy would drive high-quality growth, helping ASEAN nations advance into smart cities and sustainable industries. "China's shift toward innovation-driven growth aligns with ASEAN's aspirations for industrial upgrading," he added.