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Post by Admin on Sept 25, 2018 18:09:50 GMT
The main reason for doubting that there will be an early and favorable resolution to the U.S.-China trade war is that the Trump administration is making a number of basic miscalculations about the Chinese economy and its politics. Those miscalculations are deluding it into believing that a trade war with China can be won quickly and cheaply. In particular, the administration is underestimating how effective a Chinese domestic economic policy response might be to higher U.S. import tariffs, how much economic pain the Chinese political system can bear and how strong the historical reasons are for President Xi Jinping not to be seen losing face in this trade war. There can be no doubting that China has a highly unbalanced economy that in the end will go the way the Japanese economy went before with its lost economic decade in the 1990s. Over the past 10 years, China has had a credit bubble of epic proportions, which has been far greater than that preceding the U.S. housing bust. Its economy has also become far too dependent on extraordinarily high investment levels to generate economic growth. That in turn has resulted in a massive amount of excess industrial capacity and large housing market bubbles in many parts of the country. However, it is a mistake to think, as the Trump administration seems to be doing, that increased U.S. import tariffs will quickly send the Chinese economy into a tailspin.
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Post by Admin on Sept 26, 2018 18:06:35 GMT
China refused a U.S. warship entry to Hong Kong next month, days after Washington sanctioned the Chinese military for buying Russian weapons. The U.S. consulate in Hong Kong confirmed on Wednesday that China had denied a request for the port call by the U.S. Navy’s amphibious assault ship the USS Wasp. “The Chinese Government did not approve a request for a U.S. port visit to Hong Kong by the USS Wasp,” Darragh Paradiso, a spokeswoman for the U.S. Consulate in Hong Kong, said in an email. “We have a long track record of successful port visits to Hong Kong, and we expect that will continue.” The vessel is part of a group based in Sasebo, Japan, and operating in the Indo-Pacific region.
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Post by Admin on Oct 18, 2018 18:03:33 GMT
Chinese shares extended the world’s deepest slump and the yuan touched its weakest level in almost two years, testing the government’s ability to maintain market calm as risks mount for Asia’s largest economy.
Fears of widespread margin calls fueled a 3 percent tumble in the Shanghai Composite Index, which sank to a nearly four-year low as more than 13 stocks fell for each that rose. Efforts by local governments to shore up confidence in smaller companies failed to boost sentiment.
The yuan slid beyond its closely watched August low after the U.S. Treasury Department stopped short of declaring China a currency manipulator, a move that some interpreted as giving Beijing breathing room to allow a weaker exchange rate.
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Post by Admin on Oct 25, 2018 17:54:50 GMT
Investors were spooked by figures on Wednesday showing new home sales fell last month to their slowest pace in nearly two years. They underlined other reports suggesting the US housing market is weakening - a worry given the sector is seen as a bellwether of economic health by many. Investors have also grown nervous as growth in China slows and companies report increased costs due to labour shortages and tariffs. Those forecasts hit companies such as Caterpillar, down 5.6%, and 3M, off 4.2%. The falls compounded declines on Tuesday in the wake of disappointing results. Nate Thooft at Manulife Mutual Funds said: "Costs are increasing and it's often tariff-related. We also reached a potential peak for earnings - companies that show marginal weakness take a beating."
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Post by Admin on Dec 7, 2018 17:57:10 GMT
Under the agreement, the U.S. won’t raise tariffs on $200 billion in Chinese goods at the start of the new year and China agreed to buy more U.S. goods, the White House says. China also agreed to consider the opioid fentanyl as a controlled substance.
President Donald Trump says trade talks with China "are going very well". Statements made by the Trump administration this week gave investors little hope that progress had been made on trade negotiations.
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