Chinese and Hong Kong stocks rose on Monday, recovering some losses from last week. The gains were driven by strong manufacturing data and hopes that Beijing’s upcoming policy meetings will introduce new economic support measures.

However, the rise was limited as China and the U.S. prepared to impose new trade tariffs on each other. Investors saw these actions as negotiation tactics rather than signs of a worsening trade war.

By midday, Hong Kong’s Hang Seng Index climbed 1.2%, rebounding from Friday’s biggest drop in four months. The Hang Seng Tech Index added 0.7%. In mainland China, the CSI300 Index gained 0.5%, while the Shanghai Composite Index increased by 0.3%. Both had fallen about 2% on Friday.

China’s manufacturing sector grew at its fastest pace in three months, with rising new orders and purchases boosting production. This helped ease concerns about economic weakness.

Markets were also hopeful that U.S. tariffs might be delayed or softened. President Donald Trump announced a 10% tariff on all Chinese imports starting March 4, in addition to the 10% already in effect since February. In response, China is preparing countermeasures, likely targeting U.S. agricultural exports.

Investors now turn their attention to China’s “Two Sessions” meetings, starting Tuesday. While major stimulus measures are unlikely, Beijing is expected to maintain a 5% growth target and set a budget deficit of 4% of GDP.