China's markets return from a week's break on Wednesday to a fresh trade dispute with the United States and ructions in the global artificial intelligence sector. Investors said they are watching for what Beijing would do to bolster confidence.

China’s central bank on Wednesday set the yuan midpoint at 7.1693 per dollar, the strongest level since Nov. 8, 2024, which investors read as a sign of Beijing’s reluctance to immediately resort to currency depreciation in response to US tariffs.

China’s sharemarket erased a near 1 per cent opening gain as traders returned from a week-long holiday to simmering tensions with the US.

Chinese traders are on tenterhooks ahead of Wednesday’s market reopen as the resumption of a trade war with the US shakes up the investment landscape.