In the Mid of June 2019, Donald Trump, the president of the United States of America, stated that he had a “very good phone conversation” with Xi Jinping, the Chinese President. He further announced that the teams of both countries would have a talk post the G-20 Summit in Japan, which took place at the end of the same month.

President Trump also said that he and President Xi of China would have an extended meeting during the summit, which hinted the hope for a trade truce between two of the world’s biggest economies.

While the occurrence of a potential truce is of utmost uncertainty for the investors, the same can cause some of the crippled stocks on China’s stock market to rise again. Two such entities on the Chinese stock market that are likely to benefit from the trade truce that Trump hinted at are Baidu and JD.com.

Baidu

While it owns China’s largest search engine, Baidu faced a loss of about 50% of its total value over a period of 12 months as its central advertising business faced an undefeatable problem.

That said, the total ad revenue of Baidu rose by a negligible 3% annually.

However, the corporation blamed China’s slowed-down economy for the loss, which resulted in incurred ad spending from some companies in industries, including online gaming, healthcare, and finance. The cherry on top, Baidu’s search chief, Hailong Xiang, who was associated with the firm for a long time also resigned.

Keeping the situation in view, a trade truce can significantly help Baidu to recover its core advertising business while the stock might look very cheap as compared to its long-term growth potential.

JD.com

After Alibaba, JD.com is the largest eCommerce player in the Chinese stock market. Because of a continuous struggle with low sales and increasing costs over the last 12 months, JD lost over 30% of its total market value. Not to mention the rape allegation against its CEO and founder Richard Liu that was a major reason behind its decline.

Chinese stock market predictors say JD will experience a rise in revenue by 18% in the wake of the trade truce, doubling its total adjusted earnings. This acceleration in JD’s core marketplace can result in further reduction of the stock prices.