HONG KONG: China stocks pared losses to close higher on Wednesday, lifted by gains in telecom companies. Hong Kong shares were flat as investors continued to digest US President-elect Donald Trump’s plans to appoint China hawks to key cabinet positions.

China’s blue-chip CSI 300 closed 0.6% higher, after losing as much as 0.6% in the session. The Shanghai Composite gained 0.5%.

Hong Kong’s Hang Seng benchmark erased most of its earlier losses to close less than 0.1% lower, hovering near a seven-week low.

The communications sector led mainland shares higher, with state-owned telecom operator China Unicom rallying 7.3% and peer China Mobile jumping 4.2%.

CSI Energy added 0.9%, contributing to the onshore gains.

The mood onshore was also aided by Nomura bumping its China growth forecast, citing some signs that economic activity may be picking up.

Nomura’s growth forecast for the fourth quarter was revised up to 4.9% year-on-year from 4.4%, while the annual GDP growth forecast was revised to 4.8% from 4.7%, analysts at the Japanese broker said in a note. However, it retained its 2025 forecast at 4.0%.

The yuan bounced off a more than three-month low against the US dollar, lifted by firmer-than-expected official midpoint guidance.

Investors are closely monitoring Trump’s cabinet appointments, particularly his choices of China hawks, as they weigh the implications for future Sino-US relations.

Marco Rubio, who has harshly criticised China, is set to become the secretary of state, while Mike Waltz will be the national security adviser, sources have said.

“Investors are now focused on Trump’s cabinet picks to gauge whether his China policy will be more hawkish than during his first term,” said Jason Chan, senior investment strategist at Bank of East Asia.

“Short-term sentiment on China is likely to remain weak amid uncertainties around him.”