US - Trade War (China)

[winston]

China Warns Ahead Of Trade-War Talks

by TYLER DURDEN

The Chinese and American positions are so far apart that China’s leaders are skeptical a deal will be possible at the end of this week.

They are already raising the possibility that Chinese officials may fly to Washington a month from now for further talks.

The ZTE case “has changed a lot of Chinese people’s opinion,” said Mr. Ruan, of the China Institute of International Studies. “In the past, people saw us as interdependent.”

The bottom line, as NYT notes, is that this position potentially forces Washington to escalate the dispute or back down… and given Trump’s history, the latter seems unlikely for now.

Source: TTR

http://www.thetradingreport.com/2018/04 ... war-talks/

[winston]

China to buy more US agricultural, energy products to cut trade deficit

The consensus follows two days of negotiations between teams led by Chinese Vice-Premier Liu He and US Treasury Secretary Steven Mnuchin

China’s trade surplus with the US hit a record US$375 billion in 2017.

Liu’s talks in Washington also addressed Trump’s other demands – an end to government-directed support for domestic tech companies and forced transfers of proprietary technology developed by foreign companies – with pledges by China to strengthen intellectual property laws and continue negotiations.

At US$14 billion, soybeans accounted for about 9.2 per cent of the US’s total 2017 exports to China, and nearly three quarters of the value of its agricultural product exports to the Asian country.

Cheniere will supply CNPC with about 1.2 million tonnes of LNG annually starting this year and continuing through to 2043.

Source: SCMP

http://www.scmp.com/news/china/economy/ ... de-deficit

[winston]

China to buy more US agricultural, energy products to cut trade deficit

The consensus follows two days of negotiations between teams led by Chinese Vice-Premier Liu He and US Treasury Secretary Steven Mnuchin

China’s trade surplus with the US hit a record US$375 billion in 2017.

Liu’s talks in Washington also addressed Trump’s other demands – an end to government-directed support for domestic tech companies and forced transfers of proprietary technology developed by foreign companies – with pledges by China to strengthen intellectual property laws and continue negotiations.

At US$14 billion, soybeans accounted for about 9.2 per cent of the US’s total 2017 exports to China, and nearly three quarters of the value of its agricultural product exports to the Asian country.

Cheniere will supply CNPC with about 1.2 million tonnes of LNG annually starting this year and continuing through to 2043.

Source: SCMP

http://www.scmp.com/news/china/economy/ ... de-deficit

[winston]

<Research Report>CICC: China-US Trade Frictions Likely to Defuse; Expects 10% Import Growth in China Next Few Yrs

CICC, in its report, said China and the US made a joint statement after trade talks in Washington on 19 May, after they had reached consensus in six main fields, including taking effective measures to reduce US trade deficit against China;

China will considerably raise purchases of US products and services and so on. The research house forecast the trade stand-off of the two greatest economies in the world will defuse.

CICC's report said China may increase imports from the US at the expense of trimming imports from other regions if China wants to do so in a short term.

Yet, from a dynamic point of view, China's total imports have been rapidly growing, with yearly increase nearly 20% YTD.

With further opening up and active imports boost, China may achieve 10% import growth in next few years, with the amount exceeding US$200 billion annually.

As such , CICC opined that China may not have to cut imports from other regions for the sake of lifting so from the US.

Source; AAStocks Financial News

[winston]

Who will be the biggest losers from a China-US trade war truce?

Some of China’s major suppliers could lose out if Beijing diverts purchases to the US to placate Washington, analysts say

Exporters in Brazil, Australia and Russia could feel the pinch if China switches suppliers of some of its big-ticket imports.

US expected American agricultural exports to China to rise by between 35 and 40 per cent this year and energy purchases to double over the next three to five years.

That could leave some of China’s trading partners, including its biggest soybean supplier Brazil, beef producer Australia, and even regional semiconductor makers, out in the cold if China shifts orders to the US.

US farm products accounted for about 20 per cent, or US$21 billion, of China’s agricultural imports last year. About two-thirds of this was in soybeans.

Source: SCMP

http://www.scmp.com/news/china/economy/ ... -war-truce

[winston]

Beijing strikes back! China puts tariffs on US$50 billion of US goods after Donald Trump kicked off trade war

China’s Finance Ministry has imposed an additional 25 per cent tariff on some US$50 billion of US imports and said the US has invalidated recent high-level talks aimed at averting a trade war

Tariffs on about US$34 billion of those products will start on July 6, and be applied to soybeans, corn, wheat, rice, sorghum, beef, pork, poultry, fish, dairy products, nuts and vegetables, autos and aquatic products.

The effective date of the tariffs on the remaining US$16 billion of American goods will be announced later, the commerce ministry said. Among those items are crude oil, natural gas, coal and some refined oil products.

Aircraft, which were previously included, were not on the revised list.

Source: SCMP

http://www.scmp.com/news/china/policies ... on-chinese

[winston]

Trade war to hit transport stocks the hardest

by Tracy Hu

Amid the escalating trade war between China and the United States, investors should avoid equities of four sectors - shipping, logistics, ports and airlines - in order to mitigate risks, Daiwa Capital Markets yesterday warned in a report.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 0621&sid=2

[winston]

Four Trade War Scenarios: From ‘One-&-Done’ To ‘All Hell Breaks Loose’

by TYLER DURDEN

Scenario One: $50 billion and done
Scenario Two: $50 billion, plus a slump in financial markets
Scenario Three: The U.S. imposes 10% tariffs on all imports and the rest of world retaliates
Scenario Four: The U.S. imposes 10% tariffs on all imports, the rest of the world retaliates, and financial markets slump

Source: Zero Hedge

http://www.thetradingreport.com/2018/07 ... aks-loose/

[winston]

Mark Mobius: Trump will win the trade fight with China — and here’s how to play it

By Victor Reklaitis

“I think at the end of the day, the U.S. is going to win this one, because the U.S. is the biggest importer in the world, and China needs the U.S.,” he told CNBC in an interview late yesterday.

What would victory look like in this case?

“Winning means getting some concessions and a reduction in the trade deficit,” Mobius says.

“What I would buy now is those countries who are going to be exporting to the U.S. instead of China — like Bangladesh , Turkey TUR, Vietnam VNM,” Mobius says.

“These are all big producers of garments and shoes and consumer goods.”

Source: Market Watch

https://www.marketwatch.com/story/mark- ... 2018-07-03

[winston]

Wait and watch as triggers are pulled

by Ivan Tong

It is expected that the first shots in the trade war between world's two biggest economies - China and the United States - will be fired tomorrow.

As Beijing is 12 hours ahead of Washington time, China is expected to retaliate in kind with US$34 billion (HK$265.2 billion) worth of import tariffs on US products at midnight, as Hong Kong moves into the wee hours of the morning.

Hong Kong's investors have suffered tremendously ever since the trade spat erupted. The Hang Seng Index has plunged by around 3,000 points from highs of 31,000, and has become a victim along with A-shares investors in mainland China.

Even though the People's Bank of China has repeatedly stressed that the recent sharp depreciation of the yuan is not related to the trade dispute, the US dollar has already begun to ease gradually.

However, as the yuan's fall has been sustained and much sharper rate than the US Dollar Index, it is hard to convince the market that the PBOC has no bias towards a weaker yuan. There is no doubt that the decline of the yuan against the US dollar will strengthen the competitive advantage of Chinese exports to the US, which is an important weapon in disguise in the trade war.

However, the sharp fluctuation of the yuan will put great pressure on the mainland stock market and assets, and it is also likely to trigger capital outflows.

Hong Kong's stock market, which substantially depends on capital from the mainland, survived but obviously became a "cash dispenser" for mainland funds.

The A-shares market and the Hong Kong stocks bounced back synchronously last Friday and the A-shares market then fell sharply on Monday. However, the Hang Seng Index dived nearly 1,000 points after mainland investors cashed in Hong Kong shares on Tuesday, the first trading day for Hong Kong in the second half year.

With both sides having their fingers on the trigger and Beijing girded for battle, the slump of the yuan will hit China's economy to a great extent.

For example, the yuan fell sharply in 2015 and severe capital outflow problems occurred subsequently.

It is believed that the PBOC is closely watching fluctuations in the currency market and wants to keep the yuan at a stable and reasonable level.

That is why the central bank did not choose to intervene in the weak yuan.

Several months ago, some senior local officials insisted that the trade war would have little impact on Hong Kong. However as Hong Kong's stock market has close bonds with China, it will also bear the brunt of a trade war. As such investors may escape narrowly only if they sell whatever shares they have, in advance of the deadline.

Hong Kong is a part of China, and won't be spared when a trade war is being waged.

Investors should be wary of wild fluctuations in the market - with prices rising and plunging - as the trade war enters the final countdown.

I would advise investors looking for bargains not to rush in when prices are low, while those who already own stocks should hang tight until Friday at the very least.

Some pundits will probably predict that the Hang Seng Index may be about to bottom out for the short term, after plunging another 1,000 to 2,000 points.

Don't take these so-called experts too seriously, because no one knows what might happen next.

Don't forget, the erratic US president Donald Trump is playing the leading role this time round, and as such the situation is even more unpredictable.

If you are a fan of the World Cup, put aside your market worries for the moment, and just enjoy the game.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 0705&sid=2