China stocks up on hopes full-blown trade war with US can be averted; HK flat

* SSEC +0.8 pct, CSI300 +0.9 pct, HSI -0.1 pct

* Trump announced 25 pct tariffs on $50 bln of China imports

* Tariff impact on China economy limited - investors

SHANGHAI, April 4 (Reuters) - China and Hong Kong stocks shook off the Trump administration's tariff announcement against Chinese exports, as investors judged the widely-expected move would have negligible impact on growth, and that a full-blown trade war will be averted through negotiations.

Late on Tuesday, the Trump administration announced 25 percent tariffs on $50 billion of annual imports from China, covering around 1,300 industrial technology, transport and medical products. China's commerce ministry immediately warned it was preparing countermeasures of equal intensity.

Investors largely looked past the news. China's blue-chip CSI300 index rose 0.9 percent, to 3,897.34 points at the end of the morning session, while the Shanghai Composite Index gained 0.8 percent, to 3,161.70 points.

The gains were led by consumer and financial sectors, which are widely seen as immune to trade disputes.

Hong Kong shares were little changed.

The sanguine mood was in stark contrast to the panic seen about two weeks ago when U.S. President Donald Trump vowed to impose tariffs on up to $60 billion of imports from China, raising fears of a trade war.

"The market reaction has been calm because investors are psychologically prepared for the move," said Tai Hui, Chief Market Strategist for Asia Pacific, J.P. Morgan Asset Management.

"The largest concern remains whether this trade tension could further escalate, but history suggests negotiation is likely to follow, which would provide some much needed short term relief to investors and allow them to focus back on economic and corporate fundamentals, which are still in decent shape."

However, Tai warned that the Sino-US trade tension could persist over coming years, and suggest investors focus on sectors that are more dependent on China's domestic demand, and less exposed to trade disputes.

Tai's view was echoed by Kai Kong Chay, Greater China portfolio manager at Manulife Asset Management, who estimates the U.S. sanctions would lower China's GDP by only 0.1 percent.

"The Chinese economy's structure is changing," he wrote, adding that contribution from household consumption to GDP growth has steadily increased to over 4 percentage points over the past five years, while that from net exports stabilised at 0.1 percentage point.

The asset manager favoured sectors such as consumer, education and environmental protection that benefit from rising domestic consumption and are shielded from trade frictions.

(Reporting by Samuel Shen and John Ruwitch Editing by Shri Navaratnam)