What happened

Shares of Chinese internet stocks Pinduoduo (PDD 1.85%), Bilibili (BILI 3.82%), and Huya (HUYA 7.14%) were each surging today, up 12.3%, 12%, and 10.8%, as of 3:08 p.m. ET.

There wasn't much in the way of company specific news today, although reports this week highlighted a potential eye-opening move for Pindudoduo to bring its e-commerce platform into the U.S. Rather, the positive movement across all three stocks likely had to do with two positive developments -- one on the China economic front, and another on the country's relations with U.S. regulators.

So what

Today, the China State Council announced stimulus measures aimed at boosting growth in China's flailing economy. The new stimulus will amount to about 300 billion renminbi ($44 billion) in credit support to state policy banks, and another RMB500 billion ($73 billion) to local governments to be spent toward infrastructure.

Chinese stocks have been battered by both the implosion of its property sector, which risks financial contagion throughout the economy, as well as China's "zero-COVID" policies, which involve widespread lockdowns and testing. Although lockdowns may actually boost usage of internet-related stocks such as these, which has actually happened in the case of all three, decreased consumer spending and advertising revenues have hurt these three stocks in recent quarters. So while they are "stay-at-home" internet stocks, more economic activity and fewer lockdowns would still help each with revenue growth.

Huya, an esports platform, is the only one of these three stocks to have reported its second-quarter earnings. Last week, it reported both a 7.7% increase in monthly active users (MAUs) and a 23.2% decline in revenue, illustrating this dichotomy.

In a second dose of positive news, it was reported that U.S. and Chinese regulators may be near a deal that would allow U.S. auditors to inspect Chinese company financial documents, which would be a requirement to keep U.S.-listed stocks from becoming delisted from U.S. exchanges. The deal would entail U.S. auditors meeting with Chinese-company auditing firms in the semiautonomous city of Hong Kong, in order to allay Chinese fears over data security. Of note, the final deal hasn't been agreed on just yet, but this report was no doubt encouraging.

In other company-specific news, it was reported by Bloomberg and Reuters this week that Pinduoduo will launch a cross-border offering to U.S. consumers. Pinduoduo pioneered a novel e-commerce concept in China, in which buyers could recruit friends and others to buy items in bulk, thereby receiving a discount. The concept has been very popular in China, with Pinduoduo reaching 751.3 million MAUs as of the first quarter, despite having launched in just 2015.

Now what

While today's news was positive, some analysts are skeptical that the stimulus measures will be enough to allow China to reach its 5.5% growth goal this year. China has been more measured in its stimulus than many would like, and others continue to be frustrated by the zero-Covid policies that continue to this day.

While Chinese stocks are definitely still far below their highs of early 2021, many questions remain, including not only economic questions, but also geopolitical ones. The ongoing Russia-Ukraine war and Taiwan tensions remain overhangs and outstanding risks, which means investors should demand better prices for China stocks, all else being equal.

So while investors in Chinese stocks should definitely rejoice at today's developments, remember to keep your Chinese stocks at a reasonable allocation in your portfolio.