Chinese shares rose big on Thursday due to bargain hunting and better-than-expected inflation figures. Also, trade tensions between Washington, Beijing, and China have eased. The shares of Alibaba Baidu shares (NASDAQ:), on the other hand, gained nearly 9 percent during early morning trade.

I’m bullish on Alibaba and Baidu.

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You can bargain hunt

After the market turmoil that drove the value of Chinese leaders such as Baidu (BIDU), and Alibaba (BABA) close to their cash values, bargain hunters have begun to embrace Chinese shares.

Baidu currently has $486.36 in Total Cash per Share. The company’s current Total Debt stands at 89.20B. Its share price is $162.09.

Alibaba’s total cash per share is currently $177.75. Its current Total Debt stands at $181.24B. The share price for Alibaba is $161.52.

Charlie Munger is Warren Buffett’s Berkshire Hathaway NYSE: (BRK.B vice-chairman). A regulatory filing shows that the legend investor and believer in China’s potential raised his Alibaba position by almost 83% during Q3.

Munger’s Alibaba position is, apparently, a sign of confidence in the future. The big rise in shares of the company on Wall Street during Thursday’s regular trading sessions spread to shares in other companies.

Analysts agree with Munger. The analysts see Alibaba’s shares trading 52.4% more in twelve months. Alibaba shares are currently valued at $246.20. It is a strong Buy with 24 ratings of Buy, 2 Hold, 1 Sell.

Eliminating Inflation Fears

The release of better-than expected inflation numbers on Wednesday added to positive sentiment regarding Chinese stocks. China’s August annual inflation rate was 0.8 percent. This is lower than the 1 percent market expectation. This is the lowest figure in China for five months. It eases fears that China’s central banks will raise interest rates.

Washington and Beijing: Resolving Trade Tensions

China’s shares are being affected by trade tensions that exist between the U.S.A. and China. Fears of additional sanctions could lead to trade restrictions between the countries. These fears can negatively affect the profitability and competitiveness of Chinese companies that have significant exposure to the U.S. Market.

These fears have been eased by the good news that this week’s high-profile meeting took place between Yang Jiechi (China’s top diplomat) and Jake Sullivan, U.S. national security advisor.

The Global Times quoted Diao Daming as saying that the meeting “showed both China and America are willing to increase strategic communication and manage disputes, and bring bilateral ties back on track.”

After several weeks of poor performance, Chinese shares are finally starting to rebound. It is becoming more common to see high-profile bargain hunter, the tensions between Washington DC and Beijing have slowed, and macroeconomic conditions are improving.

Disclosure: Panos Mourdoukoutas was the owner of shares in Bidu and Alibaba at the time this article was published.

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