Investing.com – Asian equity markets opened mixed on Wednesday morning as investors digested a new estimate of a potential 700,000 job losses in China at 700,000 due to the trade dispute between Washington and Beijing.
JPMorgan (NYSE:JPM) estimated that the trade battle with the U.S. will likely cost China 700,000 jobs, and even more if the trade war escalates further. JP Morgan's Haibin Zhu told Bloomberg that the job losses might take place if the U.S. decides to impose 25% tariffs on $200 billion of Chinese exports and Beijing retaliates by devaluing RMB by 5% and adding to levies on U.S. goods. He also said if China doesn’t retaliate, 3 million people could become unemployed.
If Washington follows through on Trump’s threat last Friday to slap 25% tariffs on another $267 billion of Chinese products, which would mean virtually all Chinese goods would be subject to levies, the job losses could be as high as 5.5 million and GDP growth could take a 1.3% hit drop in GDP growth.
China is also seeking World Trade Organization’s permission to sanction certain U.S. goods - up to $7 billion - as the latter allegedly failed to comply with a dispute ruling that indicated some of its anti-dumping rules to be illegal, according to a Tuesday statement.
Chinese stock markets closed mixed on Tuesday. The Shanghai Composite ended down by 0.05%, while the SZSE Component edged up 0.12% and the Hang Seng Index dropped by 0.27%.
The three markets extended their losses and gain on Wednesday morning. The Shanghai Composite went up 0.07% at 10:28PM ET (01:25 GMT) and the Shenzhen Component rose 0.62%, while Hong Kong is still in a bearish market, with a 0.27% drop.
The boost in U.S. tech and energy stocks is expected to bring optimism in Asian stock market. The S&P 500 rose 0.37% and Nasdaq Composite jumped 0.6% on Tuesday, while the Dow Jones Industrial Average also went up by 0.44%.
Elsewhere, South Korea’s KOSPI slid 0.11% and Japan’s Nikkei 225 lowered by 0.39%. Down under, Australia’s S&P/ASX 200 fell 0.16%.
Investors are also expecting the Federal Reserve to lift interest rates this month.