China stocks steady on cautious sentiment, HK shares fall

SHANGHAI, May 28 (Reuters) - China stocks held steady on Wednesday as investors remained cautious amid ongoing Sino-U.S. tensions, despite a temporary easing in tariff threats announced earlier this month. Hong Kong shares edged down.

** China's blue-chip CSI300 Index .CSI300 and the Shanghai Composite Index .SSEC both edged up 0.1% by the lunch break. Hong Kong benchmark Hang Seng .HIS was down 0.6%.

** After a period of market consolidation, U.S.-China negotiations are expected to remain in a tug-of-war phase, but with low active capital positioning and investors now seasoned by April's volatility, future disruptions are unlikely to significantly impact market risk appetite, Citic Securities analysts said in a note.

** U.S. President Donald Trump has played his cards in trade negotiations, and the path ahead depends on the bargaining power of countries and corporates, but trade policies will not return to the pre-Trump period, Olivier Blanchard, Senior Fellow at Peterson Institute for International Economics, said at the UBS Asian Investment Conference on Wednesday.

** Free trade agreements typically take about one to two years to decide and three years to implement, he said.

** Shares of Xiaomi 1810.HK rose 1.4% after it reported a record first-quarter revenue and profit and said its shift towards higher-end products from smartphones to home appliances was already paying off.

** Shares of major electric car makers extended losses as an intensifying auto industry price war in China has stoked fears of a long-anticipated shake-out in the world's largest car market. BYD shares traded offshore 1211.HK fell 2.2%, while Li Auto dropped 2015.HK 1.9%.

** Tech major listed in Hong Kong .HSTECH edged down 0.4%.

** Mystery box maker Pop Mart International 9992.HK saw its shares down 6.2%, its largest one-day decline since April 7.