China stocks flat in volatile trading as tech slides, defensive gains

China stocks were flat in volatile trading on Tuesday, as investors rotated into defensive plays amid renewed U.S.-China trade tensions and fresh geopolitical frictions over the chip sector.

** At the midday break, China's blue-chip CSI300 index 3399300 was down 0.1%, giving up an earlier gain of 1%.

** The Shanghai Composite index 000001 was up 0.2% at 3,897.56 points, also narrowing earlier gains.

** Beijing and Washington said they would begin charging additional port fees on each other's vessels, adding a new front to tensions as both sides navigate tariff and export-control disputes.

** The Dutch government's move to take control of Chinese-owned chipmaker Nexperia sparked concerns on more technology-security strains, weighing on sentiment toward Chinese tech asset.

** Technology sectors retreated, with the CSI Semiconductor Industry Index (.CSI93186) down more than 5% and the CSI Artificial Intelligence Index 9930713 down 3.6%.

** Steven Leung, executive director of institutional sales at UOB Kay Hian in Hong Kong said profit-taking pressure for the tech sector has picked up following its bounce on Monday.

** "Maybe after the short-term rebound, people are still sceptical," Leung said, adding that it's mainly short-term traders and hedge funds playing around.

** Defensive sectors outperformed as investors turned more cautious. China's insurance sub-index (.CSI399809) and liquor makers 3399997 each climbed about 3%, while banking shares (.CSI399986) added 2.4%.

** In Hong Kong, the Hang Seng Index HSI was down 0.2% at 25,839.07. The Tech Index HHSTECH dropped 1.3%.

** U.S. Treasury Secretary Scott Bessent said that President Donald Trump remains on track to meet Chinese leader Xi Jinping in South Korea in late October in an effort to de-escalate tensions.

** Investors should diversify sector exposure and add positions in domestic-demand industries and high-dividend strategies with profit-taking pressure rising, analysts at Daiwa Capital Markets said in a note.