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Asian Stocks Rise, Chinese Markets Surge on Government Funding Support - Asian markets rose in morning trade on Tuesday, with Chinese stocks outperforming their regional peers on reports of government funding support for major investment projects.

The Shanghai Composite and the Shenzhen Component both jumped 1.9% by 10:30 PM ET (02:30 GMT). Hong Kong’s Hang Seng Index was up 0.8%.

The gains came after state-owned news agency Xinhua cited a cabinet document and said local governments should use proceeds from special bonds to invest in major projects including highways, gas and power supply and railways.

That would help “increase effective investment, improve economic structure, stabilise aggregate demand and maintain sustained and healthy economic development”, Xinhua said.

“On the basis of increasing the size of special bonds by a big margin, we should strengthen macro-policy coordination and maintain reasonable and sufficient market liquidity.”

China Railway (HK:0390) soared nearly 7% following the report, while China Railway Construction (HK:1186) and China Communications Construction (HK:1800) jumped 6% and 5% respectively.

On the Sino-U.S. trade front, U.S. President Donald Trump said China is “going to make a deal because they’re going to have to make a deal.”

“The China deal is going to work out. You know why? Because of tariffs,” Trump told CNBC in an interview. “Right now, China is getting absolutely decimated by companies that are leaving China, going to other countries, including our own, because they don’t want to pay the tariffs.”

Separately, the President told reporters at the White House that Washington would slap more tariffs on Chinese goods if his Chinese counter Xi Jinping does not attend the upcoming G-20 meeting.

“We’ve never gotten 10 cents from China and now we’re getting a lot of money from China,” the President said.

Elsewhere in Asia, Japan’s Nikkei 225 traded 0.4% higher. South Korea’s KOSPI climbed 0.3%.

Down under, Australia’s ASX 200 jumped 1.3%, boosted by the Xinhua report. Australia is China’s largest two-way trading partner.

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