China and Hong Kong stocks rose on Wednesday, led by financial firms, as the market welcomed Beijing's pledge to further open the country's financial sector to foreign investors. On the mainland, the CSI300 index advanced 0.7 percent to 3,956.00 points, while the Shanghai Composite Index gained 0.9 percent to 3,219.07 points.
In Hong Kong, the Hang Seng index added 0.8 percent to 30,960.72 points, while the Hong Kong China Enterprises Index gained 0.5 percent to 12,388.16. China will allow foreign investors to enter its trust, financial leasing, auto finance and consumer finance sectors by the end of this year, the country's central bank said on Wednesday. China also will raise foreign ownership limits to 51 percent in securities, fund management, futures and life insurance companies over next few months, the People's Bank of China said.
The central bank's announcement comes a day after Chinese President Xi Jinping pledged to open the economy further to foreign investors and cut import tariffs on products including cars, helping cool fears over an escalating trade spat with the United States. Speaking at the Boao Forum for Asia in Hainan province on Wednesday, China's central bank governor Yi Gang said China and the United States should deal with their trade issues in a rational way.
Asked by a panel moderator whether China would devalue its currency to counter US tariffs, Yi said the exchange rate mechanism is "market-determined" and is "working very well as it is." He did not say whether China would devalue its currency or not. Moody's Investors Service said on Wednesday the direct impact of the proposed US tariffs on China's exports and economy will be limited but the "knock-on effects" are expected to be wider. China's securities regulator announced earlier that it would quadruple daily quotas for stock connect schemes linking mainland and Hong Kong markets.