By Samuel Shen and Jiaxing Li
SHANGHAI/HONG KONG (Reuters) -Chinese stocks and the yuan tentatively rose on Tuesday, with investors relieved that U.S. President Donald Trump did not announce hefty trade tariffs at his inauguration but unwilling to bet this meant improved U.S.-Sino relations.
Trump returned to the White House on Monday with an ambitious agenda spanning trade reform, immigration, tax cuts and deregulation. He did not target China in his inauguration speech nor did he immediately impose tariffs as previously promised, sparking a relief rally in global stocks and a drop in the dollar.
At the same time, Trump directed federal agencies to "investigate and remedy" persistent U.S. trade deficits and unfair trade practices by other countries, and said he might impose 25% tariffs on imports from Canada and Mexico on Feb. 1.
Trump also signed an executive order delaying the enforcement of a ban on popular short-video app TikTok, but said he might impose tariffs on China if Beijing does not approve a potential U.S. deal with TikTok.
China's blue-chip CSI300 Index climbed about 0.8% at the open, but was soon trading flat. The yuan was about 0.3% higher against a broadly weaker dollar.
Trump's start to his presidency "is better than I expected," said Charles Wang, chairman of Shenzhen Dragon Pacific Capital Management Co.
Referring to the bitter trade and geopolitical tensions between the world's two biggest economies during Trump's first term as president, Wang said he felt Trump was more pragmatic towards China and more focused on domestic politics.
Yet, investors should "watch as you walk", Wang said.
"You don't expect Trump's inauguration to trigger a big rally, as it's unrealistic for Sino-U.S. ties to suddenly reverse ... and you don't read too much into the words of Trump, who is very fickle," he said.
Yuan Yuwei, founder and chief investment officer of Water Wisdom Asset Management, called Trump's return "marginally positive" and expects the new president to be less stringent in his crackdown on China than predecessor Joe Biden, who "sought to strangle China to death."
The CSI300 index has dropped roughly 5% since Trump won the election on Nov. 5 with a threat to impose steep tariffs of 60% on Chinese goods, but had already rebounded over the past week amid gestures of goodwill between Beijing and Washington.
The yuan has weakened roughly 3% against the dollar since Trump's victory but is trading near its strongest in two weeks, buoyed by a friendly call between Trump and Chinese President Xi Jinping.