Hong Kong, China stocks rebound on signs of easing Sino-US trade tensions

SHANGHAI, Oct 20 (Reuters) - Hong Kong and China stocks rebounded sharply on Monday after a heavy selloff last week, as signs of easing Sino-U.S. trade tensions strengthened bets U.S. President Donald Trump will once again back down from his tariff threats.

Investors are also fixated on a Chinese Communist Party leadership meeting this week that will map China's five-year vision, as authorities released third-quarter economic data on Monday that was in line with forecasts.

Hong Kong's benchmark Hang Seng Index .HSI jumped more than 2%, led by tech shares .HSTECH, on track for its best day in two months.

China's blue-chip CSI300 index .CSI300 and the Shanghai Composite Index .SSEC both climbed nearly 1%.

U.S. Treasury Secretary Scott Bessent said on Friday he expects to meet this week with Chinese Vice Premier He Lifeng in Malaysia to try to forestall an escalation of U.S. tariffs on Chinese goods that Trump said was unsustainable.

Last week, China and Hong Kong stocks posted their biggest weekly drop since April as Trump threatened 100% tariffs on Chinese exports in reprisal for Beijing's new export controls on rare earth minerals.

"Trump will definitely back down," said Yuan Yuwei, hedge fund manager at Water Wisdom Asset Management.

"A hard decoupling will push up U.S. inflation and inflict pain on ordinary Americans," he said, adding China's complete supply chain and social management system may help the country dig in longer.

Official data published on Monday showed China's economy grew 4.8% in the third quarter, as expected, marking the weakest pace in a year.

All eyes are now on the so-called fourth plenum, a gathering of top CCP officials including President Xi Jinping from Monday to Thursday that will review a proposed roadmap for China in 2026-2030.

The five-year plan is China's strategy map that "tells you where the leaders are going to be directing capital, talent and subsidies," said Megan Ie, London-based senior equity analyst at GIB Asset Management.

"If policymakers have the same messaging around innovation and self-sufficiency, commitment to capital markets and shareholder returns, it is quite a nice support for investors because the market gets a lot of confidence through clarity."

China's artificial intelligence .CSI930713, chipmaking .STARCHIP and robot .CHINEXTC sectors rebounded sharply on Monday following a recent correction.

In Hong Kong, the Hang Seng Tech Index .HSTECH jumped more than 3%.