Published by Global Banking & Finance Review®
Posted on April 22, 2025
5 min readLast updated: January 24, 2026
Add as preferred source on GoogleChinese investors are buying stocks to show patriotism amid the US-China trade war, focusing on sectors like defense and semiconductors.
By Samuel Shen and Tom Westbrook
SHANGHAI/SINGAPORE (Reuters) -Cao Mingjie had never traded stocks before Donald Trump's "Liberation Day".
The home designer from China's southern Guangdong province changed his mind after April 2, when the U.S. president announced "reciprocal tariffs", intensifying a trade war with his country.
Keen to show solidarity with Beijing, Cao decided he would invest 2,000 yuan ($274) in the local stock market every month.
"The goal isn't to make money. It's about contributing to my country," said Cao. He said he opened trading accounts after the higher tariffs hit Chinese stocks. In this trade war, "every individual should stand by the country until the end".
Like Cao, many retail investors are joining the state-backed "national team" to defend the stock market - another battlefield in the broadening Sino-U.S. conflict, traders and brokers say. Buying has been focused on sectors set to benefit from China's national agenda, such as defence, consumer and semiconductors.
The patriotic fervour is unusual in small investors, notorious for their casino mentality, and a welcome change for authorities seeking to counter the panic caused by the trade war and stabilise capital markets.
Since the rout on April 4, China's share markets have received 45 billion yuan in net retail inflows, data from financial information provider Datayes shows. That compares with six straight sessions of outflows totalling 91.8 billion yuan ahead of Trump's "Liberation Day".
Previously, private and state investors clashed during the 2015 market crash and in the aftermath of Beijing's crackdown of technology companies, undermining market rescue efforts.
But now, their interests appear aligned as Trump threatens eye-popping import tariffs that China has described as "bullying", even if some retail investors are merely opportunistic and riding on Beijing's swift and resolute intervention.
As China stocks plunged 7% on April 7, state-backed institutional investors publicly vowed to buy more shares, top Chinese brokerages pledged to steady prices, and a slew of listed companies unveiled share buyback plans.
Last week, Chinese Premier Li Qiang urged government officials to strengthen efforts to steady the stock market.
China's stock market has bounced 8% from seven-month lows hit early April, and is down just 1.3% so far this month. That compares with a slump of more than 8% for U.S. stocks.
"We think China's A-share market is of greater strategic importance," said Meng Lei, China equity strategist at UBS Securities. Patriotic bets have "meaningfully improved investor sentiment", Meng said.
'BEING PATRIOTIC MEANS HOLDING ON'
Zhou Lifeng, from China's northwestern Ningxia region, has vowed to pour more cash into stocks even if he incurs losses.
"Being patriotic means holding on to your stocks," said Zhou, a mountain climber. Zhou said he owns mostly consumer and defence stocks worth 3 million yuan and has 7 million yuan cash in his war chest.
Restaurant operator Shu Hao said he had also invested several hundred million yuan in Chinese shares and that he was inspired by efforts made by domestic retail giants to help exporters bruised by the trade war.
JD.com, Alibaba-owned Freshippo, and supermarket operators CR Vanguard and Yonghui Superstores have announced measures to help exporters pivot to the local market.
"People are expressing patriotism in various ways," said Shu. He said he had bought technology and consumer shares.
The stocks and sectors people are buying into reflects nationalistic pride. They are mostly areas in which Beijing has self-sufficiency targets or have local champions that are being shut out of global markets due to the tariffs.
Reflecting this, consumer and chipmaking shares have risen since Trump's "Liberation Day" despite weaker broader markets, while tourism and agriculture-related shares have recovered quickly.
Exchange-traded funds, an increasingly popular investment conduit in China, have received piles of money.
Since the April 7 slump, Chinese ETFs have received more than 230 billion yuan of flows, pushing the total size of the segment past 4 trillion yuan for the first time, state media has reported. The data does not show how much of those inflows were from retail investors, versus the "national team".
'WAR ... WITHOUT GUN SMOKE'
Patriotism is also reshaping the portfolio of some professional investors.
Hedge fund manager Yang Tingwu said he ploughed all the cash left in his portfolio into stocks.
"This is war, only without gun smoke," Yang, portfolio manager at Tongheng Investment said, referring to the spiralling trade conflict between China and the U.S. that has seen tit-for-tat levies surging past 100%.
"You're placing bets not just on your portfolio, but also on the fate of your country," said Yang, who has wagered on farming, energy, finance and defence stocks.
Founder of Shanghai-based Minority Asset Management, Liam Zhou, said he had invested his $1 billion portfolio entirely in China stocks.
The trade war has even turned some Chinese investors nationalistic.
"My portfolio is bleeding, but I don't care. I'll stand firm with the government in the fight against U.S. bullying," said Nancy Lu, a teacher in eastern Jiangsu province. She vowed to never go to Starbucks or wear Nike again, in a boycott of American brands.
"I won't sell a single stock. I'll help defend the market for our country. I have never felt so proud as a retail investor," she added.
($1 = 7.2917 yuan)
(Reporting by Samuel Shen in Shanghai and Tom Westbrook in Singapore; Editing by Vidya Ranganathan and Himani Sarkar)
The article discusses how Chinese investors are buying stocks to support the market amid the US-China trade war.
Investors are buying stocks in sectors that align with China's national agenda to support the economy.
Investors are focusing on defense, consumer goods, and semiconductors.
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