While the Hong Kong stock exchange slumped, mainland markets performed better. The Shanghai Composite index closed broadly flat.
Mr Wrigley said Trump’s victory would probably force the world’s second-largest economy to embark on more stimulus, which could insulate domestic markets from the impact.
China’s highest state body, the National People’s Congress, is currently in session and expected to make announcements on Friday. Mr Wrigley said: “It does look like that timing was set to create this opportunity to do something in case of the Trump victory.
“They likely were going to do something very sizeable to start off with, but they’ll probably do a bit more because of Trump on Friday and then create the room to respond further once he becomes president next year.”
Even before Trump’s victory, China’s economy had been struggling to reach the growth rates it had enjoyed pre-pandemic after an underwhelming post-Covid bounce-back and an implosion of its heavily leveraged property sector.
China may borrow more to directly support the economy through investment in infrastructure projects and possibly also expanding subsidies for new car purchases, Mr Wrigley said.
Some Chinese exports will likely get diverted through south-east Asia or Latin America and still end up in the US, Mr Wrigley added. However, he warned that China still faced a “significant” hit.
Analysts have warned that Mr Trump’s trade war with China and the rest of the world could have profound implications for the global economy. Edmond de Rothschild, an asset manager, said in a note to clients that it would likely “fuel a new wave of inflation”.
Garry White, the chief investment commentator at Charles Stanley, said: “A Trump presidency is bad news for China and for Europe, facing tariff threats and a US policy based on cheaper energy, lower taxes and regulations to drive more US activity.”
