MARKETWATCH
"China manufacturing drops to 8-month low"
By Liyan Qi
Published: Oct 31, 2019 2:06 a.m. ET
Chinese manufacturing activity fell to an eight-month low in October, an official gauge showed, raising another warning signal as hopes for a U.S.-China trade truce were dealt a further blow.
China’s official gauge of factory activity, the manufacturing purchasing managers index, dropped to 49.3 in October from 49.8 in September, the National Bureau of Statistics said Thursday.
The index has stayed below the 50 mark, which separates expansion from contraction, for six straight months, indicating worsening business sentiment despite the government’s efforts to spur economic growth.
Economists were expecting factory activity to have held steady this month, partly due to easing trade tensions between China and the U.S.
But the cancellation of a summit of Asia-Pacific Economic Cooperation members has complicated efforts by the world’s two largest economies to sign a limited trade agreement designed to keep new tariffs at bay.
Even if a partial trade deal were reached, that alone probably wouldn’t help China’s economy in the absence of other policy supports, said Serena Zhou, an economist at Mizuho Securities.
“The latest PMI again proved that China’s economy is under notable downward pressure,” Ms. Zhou said.
“I don’t think an interim trade deal in November can quickly turn the situation around.”
The drop in manufacturing activity adds pressure on Beijing policy makers, who are seeking to juice economic growth while taming inflation expectations.
Policy easing by other global central banks could push the People’s Bank of China to ease more.
The Federal Reserve cut interest rates for the third time this year on Wednesday.
However, the PBOC also must contend with rising consumer inflation.
Surging pork prices pushed China’s consumer inflation to a near six-year high in September, while China’s producer-price deflation deepened more amid falling raw-material prices and soft demand, latest official data showed.
“Yes, the central bank is under pressure to stabilize [economic] growth, but it seems more worried about heating inflation expectations,” said Yang Weixiao, an economist at Founder Securities.
Weakness in the official factory-activity report was broad-based.
A subindex measuring total new orders received by China’s manufacturers decreased to 49.6 in October from 50.5 in September, the statistics bureau said.
New export orders, an indicator of external demand for Chinese goods, fell to 47.0 from 48.2 in September, while import orders tumbled to 46.9 from 47.1 a month earlier.
Production also eased to 50.8 in October, compared with 51.9 in September.
Meantime, business activity outside China’s factory gates expanded at the slowest pace in October in nearly four years, as weaker growth among service providers outweighed strength in the construction sector, a separate official gauge showed.
China’s official nonmanufacturing PMI, also released Thursday, dropped to 52.8 from 53.7 in September.
Ms. Zhou of Mizuho said one policy option is for China’s central bank to trim the amount of reserves that banks are required to keep on hand, a move that she said would benefit all lenders equally, including smaller rural ones that have been suffering from higher interbank financing costs in recent months.
On Wednesday, one such bank in central Henan province became the latest lender to spark concern as authorities were forced Wednesday to assure the safety of its deposits following a flurry of withdrawals.
At the same time, China’s anticorruption watchdog unveiled an investigation into the bank’s former chairman.
https://www.marketwatch.com/story/china ... 2019-10-31
CHINA
Re: CHINA
MARKETWATCH
"Trump calls U.S.-China deal ‘close’ in speech where he blasts Fed and touts economic successes"
By Robert Schroeder
Published: Nov 12, 2019 2:08 p.m. ET
President Donald Trump on Tuesday said a U.S.-China trade deal “could happen soon,” describing a phase-one agreement as “close” in a speech to the Economic Club of New York.
In the closely watched speech, Trump called Beijing “dying to make a deal” with the U.S., but gave scant details on phasing out tariffs or setting a meeting to sign any deal with Chinese President Xi Jinping.
Trump also took aim at the Federal Reserve and touted U.S. job creation in the midday speech, saying that his administration had “exceeded expectations” on the U.S. economy by creating nearly 7 million new jobs.
The number is closer to 6.5 million since the beginning of the Trump administration, according to the government.
One day ahead of a Capitol Hill testimony by Fed Chairman Jerome Powell, Trump repeated his charge that the central bank has cut interest rates too slowly.
Citing stock-market records, Trump claimed, “if we had a Fed that worked with us, we could have added another 25% to those numbers.”
Equities and other assets have hung on statements from Trump and China about the possibility of a deal, with the president last week disputing Beijing’s assertion that the U.S. and China had agreed to roll back tariffs as part of an interim trade pact.
U.S. stock-indexes all held on to modest gains in Tuesday action as Trump spoke.
The U.S. and China have placed tariffs on billions of dollars’ worth of each others’ goods in a trade fight that has roiled global markets.
The next round of U.S. levies on Chinese products is scheduled to go into effect on Dec.15., and covers $156 billion of goods including toys and computers.
Trump warned Tuesday, “if we don’t make a deal, we’re going to substantially raise the tariffs.”
The tariff fight has come as officials from the two sides have been negotiating the so-called phase one, or partial, trade agreement.
Under that phase, the U.S. aims to have China buy more American agricultural products; beef up intellectual property protections for foreign companies in China; and open China’s financial-services market.
https://www.marketwatch.com/story/trump ... 2019-11-12
"Trump calls U.S.-China deal ‘close’ in speech where he blasts Fed and touts economic successes"
By Robert Schroeder
Published: Nov 12, 2019 2:08 p.m. ET
President Donald Trump on Tuesday said a U.S.-China trade deal “could happen soon,” describing a phase-one agreement as “close” in a speech to the Economic Club of New York.
In the closely watched speech, Trump called Beijing “dying to make a deal” with the U.S., but gave scant details on phasing out tariffs or setting a meeting to sign any deal with Chinese President Xi Jinping.
Trump also took aim at the Federal Reserve and touted U.S. job creation in the midday speech, saying that his administration had “exceeded expectations” on the U.S. economy by creating nearly 7 million new jobs.
The number is closer to 6.5 million since the beginning of the Trump administration, according to the government.
One day ahead of a Capitol Hill testimony by Fed Chairman Jerome Powell, Trump repeated his charge that the central bank has cut interest rates too slowly.
Citing stock-market records, Trump claimed, “if we had a Fed that worked with us, we could have added another 25% to those numbers.”
Equities and other assets have hung on statements from Trump and China about the possibility of a deal, with the president last week disputing Beijing’s assertion that the U.S. and China had agreed to roll back tariffs as part of an interim trade pact.
U.S. stock-indexes all held on to modest gains in Tuesday action as Trump spoke.
The U.S. and China have placed tariffs on billions of dollars’ worth of each others’ goods in a trade fight that has roiled global markets.
The next round of U.S. levies on Chinese products is scheduled to go into effect on Dec.15., and covers $156 billion of goods including toys and computers.
Trump warned Tuesday, “if we don’t make a deal, we’re going to substantially raise the tariffs.”
The tariff fight has come as officials from the two sides have been negotiating the so-called phase one, or partial, trade agreement.
Under that phase, the U.S. aims to have China buy more American agricultural products; beef up intellectual property protections for foreign companies in China; and open China’s financial-services market.
https://www.marketwatch.com/story/trump ... 2019-11-12
Re: CHINA
CNBC
"Mood in Beijing about trade deal is pessimistic, government source says"
Yun Li@YunLi626
Published Mon, Nov 18 2019•8:29 AM EST Updated Mon, Nov 18 2019•11:26 AM EST
Key Points
* Chinese officials were troubled by Trump’s comment that there was no agreement on phasing out tariffs, a government source told CNBC.
* China said earlier this month that the two sides had reached an agreement on the tariff rollback. However, Trump said a week ago he has not agreed to scrap tariffs on Chinese goods.
* The Chinese are looking carefully at the political situation in the U.S. including the impeachment hearings and the presidential election, the source said.
The mood in Beijing about a trade deal is pessimistic due to President Donald Trump’s reluctance to roll back tariffs, which China believed the U.S. had agreed to, a government source told CNBC’s Eunice Yoon.
Stocks opened down on the trade headlines.
The U.S. and China agreed to work on a limited “phase one” trade deal in early October.
China has pushed for a removal of the additional duties imposed on each other’s products in different phases, as part of the deal.
Chinese Commerce Ministry spokesperson Gao Feng said earlier this month that the two sides had reached an agreement on the tariff rollback.
However, Trump said a week ago that he has not agreed to scrap tariffs on Chinese goods, contradicting the signal from China and dampening hopes about a coming resolution to a jarring trade conflict.
The Chinese are looking carefully at the political situation in the U.S. including the impeachment hearings and the presidential election, the source said, adding the officials are wondering if it is more rational to wait things out since it is unclear what Trump’s standing will be even in a few months.
There is disagreement over issues such as a specific number of agricultural purchases, the source said.
The Chinese are resisting because, in part, they could risk alienating other trading partners, the source told CNBC.
The trade war between the world’s two largest economies has dragged on for nearly two years.
The Trump administration has slapped tariffs on more than $500 billion in Chinese goods, while Beijing has put duties on about $110 billion in American products.
Trump hopes to resolve outstanding gripes with Beijing’s trade practices, including forced technology transfers and intellectual property theft, while securing more Chinese purchases of U.S. agricultural goods.
The White House did not immediately respond to CNBC’s request for comment.
The Chinese Ministry of Commerce said Sunday that the two sides had “constructive discussions” about “each other’s core concerns” and agreed to remain in close contact.
Meanwhile, White House economic advisor Larry Kudlow said Friday that the two countries were “getting close” to reaching a trade deal.
https://www.cnbc.com/2019/11/18/mood-in ... -cnbc.html
"Mood in Beijing about trade deal is pessimistic, government source says"
Yun Li@YunLi626
Published Mon, Nov 18 2019•8:29 AM EST Updated Mon, Nov 18 2019•11:26 AM EST
Key Points
* Chinese officials were troubled by Trump’s comment that there was no agreement on phasing out tariffs, a government source told CNBC.
* China said earlier this month that the two sides had reached an agreement on the tariff rollback. However, Trump said a week ago he has not agreed to scrap tariffs on Chinese goods.
* The Chinese are looking carefully at the political situation in the U.S. including the impeachment hearings and the presidential election, the source said.
The mood in Beijing about a trade deal is pessimistic due to President Donald Trump’s reluctance to roll back tariffs, which China believed the U.S. had agreed to, a government source told CNBC’s Eunice Yoon.
Stocks opened down on the trade headlines.
The U.S. and China agreed to work on a limited “phase one” trade deal in early October.
China has pushed for a removal of the additional duties imposed on each other’s products in different phases, as part of the deal.
Chinese Commerce Ministry spokesperson Gao Feng said earlier this month that the two sides had reached an agreement on the tariff rollback.
However, Trump said a week ago that he has not agreed to scrap tariffs on Chinese goods, contradicting the signal from China and dampening hopes about a coming resolution to a jarring trade conflict.
The Chinese are looking carefully at the political situation in the U.S. including the impeachment hearings and the presidential election, the source said, adding the officials are wondering if it is more rational to wait things out since it is unclear what Trump’s standing will be even in a few months.
There is disagreement over issues such as a specific number of agricultural purchases, the source said.
The Chinese are resisting because, in part, they could risk alienating other trading partners, the source told CNBC.
The trade war between the world’s two largest economies has dragged on for nearly two years.
The Trump administration has slapped tariffs on more than $500 billion in Chinese goods, while Beijing has put duties on about $110 billion in American products.
Trump hopes to resolve outstanding gripes with Beijing’s trade practices, including forced technology transfers and intellectual property theft, while securing more Chinese purchases of U.S. agricultural goods.
The White House did not immediately respond to CNBC’s request for comment.
The Chinese Ministry of Commerce said Sunday that the two sides had “constructive discussions” about “each other’s core concerns” and agreed to remain in close contact.
Meanwhile, White House economic advisor Larry Kudlow said Friday that the two countries were “getting close” to reaching a trade deal.
https://www.cnbc.com/2019/11/18/mood-in ... -cnbc.html
Re: CHINA
THE NEW YORK TIMES
"White House Won’t Say if Trump Will Sign Hong Kong Bill That Has Angered China - The president has avoided a strong defense of pro-democracy protesters, but Congress has thrown the issue into his lap."
By Michael Crowley and Ana Swanson
Nov. 21, 2019
WASHINGTON — President Trump has spent months delicately sidestepping Hong Kong’s escalating battle between pro-democracy demonstrators and security services enforcing China’s authoritarian government line.
But on Wednesday, Congress put Mr. Trump on the spot, sending him tough legislation that would impose sanctions on Chinese officials for cracking down on the protesters and could end Hong Kong’s favored economic relationship with the United States.
The measure lands on the president’s desk at a sensitive moment.
His trade talks with Beijing are becalmed, and a Dec. 15 deadline for Mr. Trump to decide whether to renew major tariffs on Chinese goods is approaching.
China’s government has responded with fury to the measure and demanded that it not become law.
The bill, titled the Hong Kong Human Rights and Democracy Act, is a test of Mr. Trump’s commitment to the United States’ historical mission of promoting human rights and democracy abroad.
Members of both parties have urged the president to speak out more forcefully on behalf of demonstrators resisting what they call Beijing’s tightening grip over the semiautonomous island territory, to little avail.
“He’s largely tried to ignore it so far,” said Laura Rosenberger, a top National Security Council aide for China affairs in the Obama White House.
“This is really going to be a test."
"In general his approach to the China challenge has been very focused on the trade aspects of the relationship,” added Ms. Rosenberger, a senior fellow at the German Marshall Fund of the United States.
The White House declined to comment on whether Mr. Trump would sign the measure, which passed the Senate unanimously and the House with only one lawmaker opposed, creating a solidly veto-proof majority.
Presidents have 10 days to sign approved legislation, but that clock is suspended when Congress is adjourned, as it will be next week for the Thanksgiving holiday.
Speaking on CNBC on Thursday, the measure’s Senate sponsor, Marco Rubio, Republican of Florida, said that he expected it to win Mr. Trump’s approval.
“My understanding is they will sign it,” he said.
Mr. Trump could still invoke presidential authorities to avoid or delay enforcing some of the bill’s provisions, according to people familiar with the measure, potentially blunting its impact in the near term as well as criticism from Beijing.
“If the U.S. continues to make the wrong moves, China will be taking strong countermeasures for sure,” a spokesman for China’s Foreign Ministry, Geng Shuang, told reporters in Beijing on Thursday.
Without naming Mr. Trump, he urged the United States to “stop its wrongdoing before it’s too late, prevent this act from becoming law” and “immediately stop interfering in Hong Kong affairs and China’s internal affairs.”
China often issues angry criticisms of Washington with little follow up.
And Chinese negotiators have also pushed to isolate the trade talks from a range of security-related matters, including the Trump administration’s crackdown on the Chinese telecom firm Huawei and the American sale of fighter jets to Taiwan.
“What has been surprising to me throughout the trade negotiations has been the degree of China’s willingness to compartmentalize issues,” said Evan S. Medeiros, another top China aide in the Obama White House.
“Obviously the Chinese don’t want the president to sign it."
"But are they going to be willing to blow up the trade deal to do so?” added Mr. Medeiros, now a professor at Georgetown University’s Walsh School of Foreign Service.
“I don’t think they will, in large part because they understand he has a lot of discretion with this particular bill.”
In June, Mr. Trump told President Xi Jinping of China that he would not publicly back the protesters as long as trade talks were progressing.
Administration officials have said that they have some reservations about striking a trade deal with China at a time when violence in Hong Kong could worsen, but that it is not the main impediment to reaching an agreement.
Congress acted on the measure, which had been stalled, after the riot police challenged student activists on campuses for the first time this month.
Mr. Trump has said he hopes the crisis “works out for everybody,” and has suggested that the matter is an internal affair for China to resolve.
But leaders in both parties have pressed Mr. Trump to offer more support for the protesters.
“I would encourage this president, who has seen Chinese behavior for what it is with a clarity that others have lacked, not to shy away from speaking out on Hong Kong himself,” Senator Mitch McConnell of Kentucky, the majority leader, said on Wednesday.
“The world should hear from him directly that the United States stands with these brave men and women.”
Senator Charles Schumer, the Democratic leader, denounced the president’s position, asking on Twitter this month, “Why is President Trump giving the Chinese Communist Party a free hand?”
While Mr. Trump has said little about Hong Kong to provoke Beijing, other administration officials have used stronger words.
“We stand with you."
"We are inspired by you."
"We urge you to stay on the path of nonviolent protest,” Vice President Mike Pence said in an address last month.
The measure requires the State Department to certify annually whether Hong Kong’s government is maintaining democratic and civil society freedoms, such as judicial independence and freedom of the press, that were promised by China’s government when Britain handed over its former colony to Beijing in 1997.
If Hong Kong fails that test, it would lose a preferred trading status that plays a major role in its economy.
It would also require sanctions on Chinese officials deemed responsible for arbitrary detention, torture, or forced confession of demonstrators and other political dissidents.
But the bill could be another impediment to a so-called Phase 1 trade deal whose fate is increasingly unclear.
Michael Pillsbury, a China expert at the conservative Hudson Institute with close ties to the Trump administration, said that Mr. Trump could blunt the measure’s impact on the trade talks by delaying his signature until after such a deal is reached.
Mr. Trump announced last month that he had reached a trade agreement with China that would strengthen intellectual property protections, lock in extensive purchases of American farm goods and forestall some of the tariff increases he had planned for later this year.
The agreement would help ease tensions in a trade war that has dragged on for more than a year and harmed businesses and consumers on both sides of the Pacific.
But in recent weeks, the countries have sparred over the pact’s provisions, with China pushing for the removal of more of the tariffs that Mr. Trump has placed on $360 billion of its products.
The cancellation of a summit in Chile where Mr. Trump and Mr. Xi were expected to sign the agreement also threw plans for the pact’s completion into disarray.
Speaking to reporters on Wednesday as he toured an Apple plant in Austin, Texas, Mr. Trump said he had resisted a deal because China was not offering enough concessions.
“I haven’t wanted to do it yet because I don’t think they’re stepping up to the level that I want,” he said.
Chinese officials have asked their American counterparts to travel to China for another round of negotiations.
But Mr. Trump’s advisers have been reluctant to do so, insisting that China is offering too little in the form of concessions to warrant the level of tariff relief it is requesting, one person briefed on their plans said.
https://www.nytimes.com/2019/11/21/us/p ... china.html
"White House Won’t Say if Trump Will Sign Hong Kong Bill That Has Angered China - The president has avoided a strong defense of pro-democracy protesters, but Congress has thrown the issue into his lap."
By Michael Crowley and Ana Swanson
Nov. 21, 2019
WASHINGTON — President Trump has spent months delicately sidestepping Hong Kong’s escalating battle between pro-democracy demonstrators and security services enforcing China’s authoritarian government line.
But on Wednesday, Congress put Mr. Trump on the spot, sending him tough legislation that would impose sanctions on Chinese officials for cracking down on the protesters and could end Hong Kong’s favored economic relationship with the United States.
The measure lands on the president’s desk at a sensitive moment.
His trade talks with Beijing are becalmed, and a Dec. 15 deadline for Mr. Trump to decide whether to renew major tariffs on Chinese goods is approaching.
China’s government has responded with fury to the measure and demanded that it not become law.
The bill, titled the Hong Kong Human Rights and Democracy Act, is a test of Mr. Trump’s commitment to the United States’ historical mission of promoting human rights and democracy abroad.
Members of both parties have urged the president to speak out more forcefully on behalf of demonstrators resisting what they call Beijing’s tightening grip over the semiautonomous island territory, to little avail.
“He’s largely tried to ignore it so far,” said Laura Rosenberger, a top National Security Council aide for China affairs in the Obama White House.
“This is really going to be a test."
"In general his approach to the China challenge has been very focused on the trade aspects of the relationship,” added Ms. Rosenberger, a senior fellow at the German Marshall Fund of the United States.
The White House declined to comment on whether Mr. Trump would sign the measure, which passed the Senate unanimously and the House with only one lawmaker opposed, creating a solidly veto-proof majority.
Presidents have 10 days to sign approved legislation, but that clock is suspended when Congress is adjourned, as it will be next week for the Thanksgiving holiday.
Speaking on CNBC on Thursday, the measure’s Senate sponsor, Marco Rubio, Republican of Florida, said that he expected it to win Mr. Trump’s approval.
“My understanding is they will sign it,” he said.
Mr. Trump could still invoke presidential authorities to avoid or delay enforcing some of the bill’s provisions, according to people familiar with the measure, potentially blunting its impact in the near term as well as criticism from Beijing.
“If the U.S. continues to make the wrong moves, China will be taking strong countermeasures for sure,” a spokesman for China’s Foreign Ministry, Geng Shuang, told reporters in Beijing on Thursday.
Without naming Mr. Trump, he urged the United States to “stop its wrongdoing before it’s too late, prevent this act from becoming law” and “immediately stop interfering in Hong Kong affairs and China’s internal affairs.”
China often issues angry criticisms of Washington with little follow up.
And Chinese negotiators have also pushed to isolate the trade talks from a range of security-related matters, including the Trump administration’s crackdown on the Chinese telecom firm Huawei and the American sale of fighter jets to Taiwan.
“What has been surprising to me throughout the trade negotiations has been the degree of China’s willingness to compartmentalize issues,” said Evan S. Medeiros, another top China aide in the Obama White House.
“Obviously the Chinese don’t want the president to sign it."
"But are they going to be willing to blow up the trade deal to do so?” added Mr. Medeiros, now a professor at Georgetown University’s Walsh School of Foreign Service.
“I don’t think they will, in large part because they understand he has a lot of discretion with this particular bill.”
In June, Mr. Trump told President Xi Jinping of China that he would not publicly back the protesters as long as trade talks were progressing.
Administration officials have said that they have some reservations about striking a trade deal with China at a time when violence in Hong Kong could worsen, but that it is not the main impediment to reaching an agreement.
Congress acted on the measure, which had been stalled, after the riot police challenged student activists on campuses for the first time this month.
Mr. Trump has said he hopes the crisis “works out for everybody,” and has suggested that the matter is an internal affair for China to resolve.
But leaders in both parties have pressed Mr. Trump to offer more support for the protesters.
“I would encourage this president, who has seen Chinese behavior for what it is with a clarity that others have lacked, not to shy away from speaking out on Hong Kong himself,” Senator Mitch McConnell of Kentucky, the majority leader, said on Wednesday.
“The world should hear from him directly that the United States stands with these brave men and women.”
Senator Charles Schumer, the Democratic leader, denounced the president’s position, asking on Twitter this month, “Why is President Trump giving the Chinese Communist Party a free hand?”
While Mr. Trump has said little about Hong Kong to provoke Beijing, other administration officials have used stronger words.
“We stand with you."
"We are inspired by you."
"We urge you to stay on the path of nonviolent protest,” Vice President Mike Pence said in an address last month.
The measure requires the State Department to certify annually whether Hong Kong’s government is maintaining democratic and civil society freedoms, such as judicial independence and freedom of the press, that were promised by China’s government when Britain handed over its former colony to Beijing in 1997.
If Hong Kong fails that test, it would lose a preferred trading status that plays a major role in its economy.
It would also require sanctions on Chinese officials deemed responsible for arbitrary detention, torture, or forced confession of demonstrators and other political dissidents.
But the bill could be another impediment to a so-called Phase 1 trade deal whose fate is increasingly unclear.
Michael Pillsbury, a China expert at the conservative Hudson Institute with close ties to the Trump administration, said that Mr. Trump could blunt the measure’s impact on the trade talks by delaying his signature until after such a deal is reached.
Mr. Trump announced last month that he had reached a trade agreement with China that would strengthen intellectual property protections, lock in extensive purchases of American farm goods and forestall some of the tariff increases he had planned for later this year.
The agreement would help ease tensions in a trade war that has dragged on for more than a year and harmed businesses and consumers on both sides of the Pacific.
But in recent weeks, the countries have sparred over the pact’s provisions, with China pushing for the removal of more of the tariffs that Mr. Trump has placed on $360 billion of its products.
The cancellation of a summit in Chile where Mr. Trump and Mr. Xi were expected to sign the agreement also threw plans for the pact’s completion into disarray.
Speaking to reporters on Wednesday as he toured an Apple plant in Austin, Texas, Mr. Trump said he had resisted a deal because China was not offering enough concessions.
“I haven’t wanted to do it yet because I don’t think they’re stepping up to the level that I want,” he said.
Chinese officials have asked their American counterparts to travel to China for another round of negotiations.
But Mr. Trump’s advisers have been reluctant to do so, insisting that China is offering too little in the form of concessions to warrant the level of tariff relief it is requesting, one person briefed on their plans said.
https://www.nytimes.com/2019/11/21/us/p ... china.html
Re: CHINA
MARKETWATCH
"Caixin also shows uptick in China's manufacturing"
By MarketWatch
Published: Dec 1, 2019 11:58 p.m. ET
BEIJING--A private gauge of China's factory activity showed an expansion for the fourth straight month in November, following a sharp rebound in an official gauge, indicating warming demand for Chinese goods.
The Caixin manufacturing purchasing managers index rose to 51.8 from 51.7 in October, Caixin Media Co. and research firm Markit said Monday.
The reading stayed above the 50 mark that separates expansion in activity from contraction.
A component measuring new export orders had the first back-to-back monthly increase for over a year-and-a-half, Caixin and Markit said in a statement.
Respondents cited a recovery in overall demand while the employment subindex also improved, said Zhengsheng Zhong, an economist at CEBM Group.
Despite the continued recovery in activity, "business confidence remained subdued, as concerns about policies and market conditions persisted, and their willingness to replenish stocks remained limited," Mr. Zhong said.
China last week held off from retaliating against the U.S. after President Trump signed a bill supporting Hong Kong's anti-Beijing protesters.
Officials of both sides said they were still confident they can sign a partial trade deal in the coming weeks.
China's official manufacturing PMI rose to 50.2 in November from 49.3 in October, the National Bureau of Statistics said Saturday.
It was the first time since April that this key gauge of manufacturing activity registered above the 50 mark.
In an article published Sunday, China central bank Gov. Yi Gang said China won't resort to "competitive" quantitative easing even if other major economies are approaching zero interest rates.
The country's economic growth remains within a reasonable range and inflation is relatively mild overall, Mr. Yi wrote in an article published by the leading Communist Party theoretical journal Qiushi.
The Caixin PMI more closely tracks small, private manufacturers, while the official index focuses more on large, state-owned firms.
Many Chinese exporters are small and private firms.
The official PMI has a larger sample base, surveying 3,000 manufacturers nationwide, while Caixin polls 500 companies.
https://www.marketwatch.com/story/caixi ... 2019-12-01
"Caixin also shows uptick in China's manufacturing"
By MarketWatch
Published: Dec 1, 2019 11:58 p.m. ET
BEIJING--A private gauge of China's factory activity showed an expansion for the fourth straight month in November, following a sharp rebound in an official gauge, indicating warming demand for Chinese goods.
The Caixin manufacturing purchasing managers index rose to 51.8 from 51.7 in October, Caixin Media Co. and research firm Markit said Monday.
The reading stayed above the 50 mark that separates expansion in activity from contraction.
A component measuring new export orders had the first back-to-back monthly increase for over a year-and-a-half, Caixin and Markit said in a statement.
Respondents cited a recovery in overall demand while the employment subindex also improved, said Zhengsheng Zhong, an economist at CEBM Group.
Despite the continued recovery in activity, "business confidence remained subdued, as concerns about policies and market conditions persisted, and their willingness to replenish stocks remained limited," Mr. Zhong said.
China last week held off from retaliating against the U.S. after President Trump signed a bill supporting Hong Kong's anti-Beijing protesters.
Officials of both sides said they were still confident they can sign a partial trade deal in the coming weeks.
China's official manufacturing PMI rose to 50.2 in November from 49.3 in October, the National Bureau of Statistics said Saturday.
It was the first time since April that this key gauge of manufacturing activity registered above the 50 mark.
In an article published Sunday, China central bank Gov. Yi Gang said China won't resort to "competitive" quantitative easing even if other major economies are approaching zero interest rates.
The country's economic growth remains within a reasonable range and inflation is relatively mild overall, Mr. Yi wrote in an article published by the leading Communist Party theoretical journal Qiushi.
The Caixin PMI more closely tracks small, private manufacturers, while the official index focuses more on large, state-owned firms.
Many Chinese exporters are small and private firms.
The official PMI has a larger sample base, surveying 3,000 manufacturers nationwide, while Caixin polls 500 companies.
https://www.marketwatch.com/story/caixi ... 2019-12-01
Re: CHINA
MARKETWATCH
"China’s trade with U.S. sinks in November amid tariff war"
By Associated Press
Published: Dec 9, 2019 6:44 a.m. ET
BEIJING (AP) — China’s trade with the United States sank again in November as negotiators worked on the first stage of a possible deal to end a tariff war.
Exports to the United States fell 23% from a year earlier to $35.6 billion, customs data showed Sunday.
Imports of American goods were off 2.8% at $11 billion, giving China a surplus with the United States of $24.6 billion.
Exports to some other countries including France rose, helping to offset the loss.
China’s global exports were off 1.1% from a year earlier at $221.7 billion despite weakening worldwide demand.
Imports were up 0.3% at $183 billion, giving China a global surplus of $38.7 billion.
Hopes for a settlement to the fight over Beijing’s technology ambitions and trade surplus rose after President Donald Trump’s announcement of a “Phase 1” agreement following talks in October.
But there has been no sign of agreement on details nearly two months later.
The dispute has disrupted global trade in goods from soybeans to medical equipment and threatens to depress economic growth.
Trump put off a tariff increase in October but penalties already imposed by both sides on billions of dollars of imports stayed in place.
Another U.S. increase is due on Sunday on $160 billion of Chinese goods.
That would extend penalties to almost everything Americans buy from China.
Chinese spokespeople have expressed hope for a settlement “as soon as possible,” but Trump spooked financial markets last week by saying he might be willing to wait until after the U.S. presidential election late next year.
Financial markets have repeatedly risen on optimism about the talks only to fall back when no progress is announced.
The “Phase 1” agreement doesn’t cover contentious issues including U.S. complaints that Beijing steals or pressures companies to hand over technology.
Economists warn tensions could rise again next year and the bulk of tariff hikes are likely to stay in place for some time.
For the first 11 months of 2019, China’s total global exports were off 0.3% at $2.3 trillion despite the tariff war.
Imports were down 4.5% at $1.8 trillion, adding to signs Chinese domestic demand is cooling.
China’s exporters have been hurt by the U.S. tariff hikes but its overall economy has been unexpectedly resilient.
Growth in the world’s second-largest economy slipped to 6% over a year earlier in the three months ending in September, down from the previous quarter’s 6.2% but still among the world’s strongest.
Weaker Chinese demand has global repercussions, depressing demand for industrial raw materials and components from other Asian economies and oil, iron ore and other commodities from Brazil, Australia and other suppliers.
The Ministry of Finance announced Friday that China was waiving punitive import duties on U.S. soybeans and pork, keeping a promise announced in September.
A sticking point is Beijing’s insistence that Washington roll back its most recent penalties on Chinese goods as part of the “Phase 1” deal.
Beijing said last month the U.S. side agreed, but Trump dismissed that.
A Chinese spokesman repeated Thursday that Beijing expects such a move in a “Phase 1” agreement.
https://www.marketwatch.com/story/china ... 2019-12-09
"China’s trade with U.S. sinks in November amid tariff war"
By Associated Press
Published: Dec 9, 2019 6:44 a.m. ET
BEIJING (AP) — China’s trade with the United States sank again in November as negotiators worked on the first stage of a possible deal to end a tariff war.
Exports to the United States fell 23% from a year earlier to $35.6 billion, customs data showed Sunday.
Imports of American goods were off 2.8% at $11 billion, giving China a surplus with the United States of $24.6 billion.
Exports to some other countries including France rose, helping to offset the loss.
China’s global exports were off 1.1% from a year earlier at $221.7 billion despite weakening worldwide demand.
Imports were up 0.3% at $183 billion, giving China a global surplus of $38.7 billion.
Hopes for a settlement to the fight over Beijing’s technology ambitions and trade surplus rose after President Donald Trump’s announcement of a “Phase 1” agreement following talks in October.
But there has been no sign of agreement on details nearly two months later.
The dispute has disrupted global trade in goods from soybeans to medical equipment and threatens to depress economic growth.
Trump put off a tariff increase in October but penalties already imposed by both sides on billions of dollars of imports stayed in place.
Another U.S. increase is due on Sunday on $160 billion of Chinese goods.
That would extend penalties to almost everything Americans buy from China.
Chinese spokespeople have expressed hope for a settlement “as soon as possible,” but Trump spooked financial markets last week by saying he might be willing to wait until after the U.S. presidential election late next year.
Financial markets have repeatedly risen on optimism about the talks only to fall back when no progress is announced.
The “Phase 1” agreement doesn’t cover contentious issues including U.S. complaints that Beijing steals or pressures companies to hand over technology.
Economists warn tensions could rise again next year and the bulk of tariff hikes are likely to stay in place for some time.
For the first 11 months of 2019, China’s total global exports were off 0.3% at $2.3 trillion despite the tariff war.
Imports were down 4.5% at $1.8 trillion, adding to signs Chinese domestic demand is cooling.
China’s exporters have been hurt by the U.S. tariff hikes but its overall economy has been unexpectedly resilient.
Growth in the world’s second-largest economy slipped to 6% over a year earlier in the three months ending in September, down from the previous quarter’s 6.2% but still among the world’s strongest.
Weaker Chinese demand has global repercussions, depressing demand for industrial raw materials and components from other Asian economies and oil, iron ore and other commodities from Brazil, Australia and other suppliers.
The Ministry of Finance announced Friday that China was waiving punitive import duties on U.S. soybeans and pork, keeping a promise announced in September.
A sticking point is Beijing’s insistence that Washington roll back its most recent penalties on Chinese goods as part of the “Phase 1” deal.
Beijing said last month the U.S. side agreed, but Trump dismissed that.
A Chinese spokesman repeated Thursday that Beijing expects such a move in a “Phase 1” agreement.
https://www.marketwatch.com/story/china ... 2019-12-09
Re: CHINA
MARKETWATCH
"Upbeat China data has analysts asking if the bottom has been reached"
By Grace Zhu, Liyan Qi, and Bingyan Wang
Published: Dec 16, 2019 1:10 a.m. ET
BEIJING — A raft of supportive central government policies lifted China’s economic activity in November -- bolstering factory production and consumer spending -- which prompted some economists to raise their growth estimates for next year.
While many economists remain cautious about the sustainability of any improvement in China’s economy, the better-than-expected data released on Monday morning in Beijing — together with a limited trade deal announced by Beijing and Washington on Friday — could alleviate concerns about downside risks for the world’s second largest economy.
Value-added industrial output for November rose 6.2% from a year earlier, accelerating from a 4.7% year-over-year increase in October, the official National Bureau of Statistics said.
November’s reading easily topped the 5% increase predicted by a Wall Street Journal poll of 15 economists.
China’s retail sales climbed 8% in November from a year earlier, compared with October’s 7.2% increase.
That beat a median forecast for 7.6% growth.
China’s fixed-asset investment remained unchanged at 5.2% for the January-November period amid accelerated industrial investment and slower expansions for the infrastructure and property sectors.
Home sales, investment and construction slowed slightly in November as Beijing held firm to its policies aimed at curbing property speculation.
“It’s hard to know whether the better-than-expected data suggests that the economy has reached its bottom in November,” said Ding Shuang, an economist at Standard Chartered, referring to the factory production and fixed-asset investment readings.
Ding pointed to a weeklong holiday in October that may have led many economists to misread in that month’s weak data signs of deeper trouble in the Chinese economy.
He said more data in coming months would be needed to get a better picture of where things stand.
Fu Linghui, a spokesman for China’s statistics bureau, said November’s stronger-than-expected retail sales were bolstered by online consumption, particularly as Chinese e-commerce platforms launched promotions for the annual “Singles Day” shopping bonanza on Nov. 11.
Fu expressed optimism that China’s economy would meet the leadership’s growth target of between 6% and 6.5% for the year, though he also raised signs of caution.
“The current international environment remains complicated and the economy still faces downward pressure,” he said.
After the release of Monday’s data, economists at UBS and Oxford Economics raised their forecasts for 2020 Chinese economic growth to 6%, up from earlier predictions for 5.7% growth.
In addition to the positive data on Monday, the UBS and Oxford Economics economists pointed to an improved outlook following the recently unveiled limited trade deal between Washington and Beijing.
In a phase-one deal announced by the U.S. and China on Friday, Beijing promised to buy more farm products and other goods from the U.S., while the U.S. put the brakes on new tariffs that were set to take effect on Sunday.
The U.S. also agreed to reduce some existing levies.
Standard Chartered’s Ding said the deal, which is set to be signed in early January, could keep the Chinese economy humming at around 6.1% in 2020, which in turn would help Beijing fulfill its target of doubling the overall size of its gross domestic product in the decade that ends next year.
“Given the improvement in the external outlook following the trade deal and signs of stabilization in industry, we don’t expect a major policy easing in 2020 will be considered necessary,” said Louis Kuijs, an economist at Oxford Economics.
Even so, much around the trade dispute remains unresolved and uncertainty around U.S.-China trade ties -- as well as a cooling property sector -- pose two of the largest downside risks for the Chinese economy next year.
Chinese economic growth slowed to 6% in the third quarter of 2019, landing right on the bottom line of this year’s full-year target range, hitting a nearly three-decade low.
Economists recently have debated whether Beijing should introduce more aggressive stimulus measures to defend the 6% growth rate should momentum slow further.
After an annual closed-door conclave last week to discuss the economy, Chinese leaders pledged to maintain steady growth, but they also vowed to ward off financial risks and curb a rise in debt accumulation.
https://www.marketwatch.com/story/upbea ... 2019-12-16
"Upbeat China data has analysts asking if the bottom has been reached"
By Grace Zhu, Liyan Qi, and Bingyan Wang
Published: Dec 16, 2019 1:10 a.m. ET
BEIJING — A raft of supportive central government policies lifted China’s economic activity in November -- bolstering factory production and consumer spending -- which prompted some economists to raise their growth estimates for next year.
While many economists remain cautious about the sustainability of any improvement in China’s economy, the better-than-expected data released on Monday morning in Beijing — together with a limited trade deal announced by Beijing and Washington on Friday — could alleviate concerns about downside risks for the world’s second largest economy.
Value-added industrial output for November rose 6.2% from a year earlier, accelerating from a 4.7% year-over-year increase in October, the official National Bureau of Statistics said.
November’s reading easily topped the 5% increase predicted by a Wall Street Journal poll of 15 economists.
China’s retail sales climbed 8% in November from a year earlier, compared with October’s 7.2% increase.
That beat a median forecast for 7.6% growth.
China’s fixed-asset investment remained unchanged at 5.2% for the January-November period amid accelerated industrial investment and slower expansions for the infrastructure and property sectors.
Home sales, investment and construction slowed slightly in November as Beijing held firm to its policies aimed at curbing property speculation.
“It’s hard to know whether the better-than-expected data suggests that the economy has reached its bottom in November,” said Ding Shuang, an economist at Standard Chartered, referring to the factory production and fixed-asset investment readings.
Ding pointed to a weeklong holiday in October that may have led many economists to misread in that month’s weak data signs of deeper trouble in the Chinese economy.
He said more data in coming months would be needed to get a better picture of where things stand.
Fu Linghui, a spokesman for China’s statistics bureau, said November’s stronger-than-expected retail sales were bolstered by online consumption, particularly as Chinese e-commerce platforms launched promotions for the annual “Singles Day” shopping bonanza on Nov. 11.
Fu expressed optimism that China’s economy would meet the leadership’s growth target of between 6% and 6.5% for the year, though he also raised signs of caution.
“The current international environment remains complicated and the economy still faces downward pressure,” he said.
After the release of Monday’s data, economists at UBS and Oxford Economics raised their forecasts for 2020 Chinese economic growth to 6%, up from earlier predictions for 5.7% growth.
In addition to the positive data on Monday, the UBS and Oxford Economics economists pointed to an improved outlook following the recently unveiled limited trade deal between Washington and Beijing.
In a phase-one deal announced by the U.S. and China on Friday, Beijing promised to buy more farm products and other goods from the U.S., while the U.S. put the brakes on new tariffs that were set to take effect on Sunday.
The U.S. also agreed to reduce some existing levies.
Standard Chartered’s Ding said the deal, which is set to be signed in early January, could keep the Chinese economy humming at around 6.1% in 2020, which in turn would help Beijing fulfill its target of doubling the overall size of its gross domestic product in the decade that ends next year.
“Given the improvement in the external outlook following the trade deal and signs of stabilization in industry, we don’t expect a major policy easing in 2020 will be considered necessary,” said Louis Kuijs, an economist at Oxford Economics.
Even so, much around the trade dispute remains unresolved and uncertainty around U.S.-China trade ties -- as well as a cooling property sector -- pose two of the largest downside risks for the Chinese economy next year.
Chinese economic growth slowed to 6% in the third quarter of 2019, landing right on the bottom line of this year’s full-year target range, hitting a nearly three-decade low.
Economists recently have debated whether Beijing should introduce more aggressive stimulus measures to defend the 6% growth rate should momentum slow further.
After an annual closed-door conclave last week to discuss the economy, Chinese leaders pledged to maintain steady growth, but they also vowed to ward off financial risks and curb a rise in debt accumulation.
https://www.marketwatch.com/story/upbea ... 2019-12-16
Re: CHINA
REUTERS
"In phone call with Trump, China's Xi says U.S. interfering in internal affairs"
Steve Holland, Roxanne Liu
December 20, 2019 / 10:37 AM
WASHINGTON/BEIJING (Reuters) - U.S. President Donald Trump spoke on Friday with Chinese President Xi Jinping and claimed progress on issues from trade to North Korea and Hong Kong, but China said Xi accused the United States of interfering in its internal affairs.
The two leaders spoke a week after their envoys sealed a “Phase 1” agreement aimed at ending an 18-month trade war that has rattled markets and raised tensions.
Trump announced the phone call in a tweet.
A White House official said they spoke on Friday morning.
China Central Television said Xi spoke to Trump at the request of the U.S. president.
“Had a very good talk with President Xi of China concerning our giant Trade Deal."
"China has already started large scale purchase of agricultural product & more."
"Formal signing being arranged."
"Also talked about North Korea, where we are working with China, & Hong Kong (progress!)” Trump tweeted.
China’s Xinhua news agency said Xi told Trump that China is deeply concerned about “the negative words and deeds” of the United States on issues related to Taiwan, Hong Kong, Xinjiang and Tibet.
“These actions have interfered in China’s internal affairs, harmed China’s interests and undermined mutual trust and cooperation between the two sides,” Xinhua said.
The United States has called for the closure of mass detention camps in China’s western region of Xinjiang and expressed concern about the treatment of demonstrators in Hong Kong.
Xinhua said Xi hoped Trump would implement “the important consensus” reached during their meetings and phone calls and “pay close attention to and attach importance to China’s concerns, and prevent the interference of bilateral relations and the important agenda.”
China was angered when Trump last month signed legislation that authorizes sanctions on Chinese and Hong Kong officials responsible for human rights abuses in Hong Kong, in what was seen as support for pro-democracy activists.
Of paramount concern to the United States is a threat by North Korean leader Kim Jong Un for what Pyongyang has called a “Christmas gift.”
U.S. officials have interpreted this to mean either a nuclear weapons test or a ballistic missile test.
Trump and Kim have held three summits but failed to reach an agreement on lifting sanctions on North Korea in exchange for denuclearization by Pyongyang.
China and Russia on Monday proposed that the U.N. Security Council lift a ban on North Korea exports such as seafood and textiles, in a move the Russian U.N. envoy said was aimed at encouraging talks between Washington and Pyongyang.
The State Department, in response, said the U.N. Security Council should not be considering “premature sanctions relief” for North Korea as it is “threatening to conduct an escalated provocation, refusing to meet to discuss denuclearization.”
Chinese Vice Foreign Minister Le Yucheng met U.S. special envoy for North Korea Stephen Biegun on Friday, China’s foreign ministry said, Biegun’s second high-level meeting in Beijing in two days amid growing tension on the Korean peninsula.
North Korea has conducted a series of weapons tests in recent weeks and some experts say the reclusive state may be preparing for an intercontinental ballistic missile test soon.
Such a test would mark a break from the detente reached with the United States last year, dash any hopes of resuming talks on ending North Korea’s nuclear and missile programs and put the two countries back on a path of confrontation.
Xinhua said that Xi stressed to Trump that all parties need to seek a political settlement on the North Korean issue and that “all parties should meet each other halfway and maintain the momentum of easing dialogue, which serves the common interests of all parties.”
Reporting by Steve Holland and Susan Heavey; Editing by Dan Grebler and Chizu Nomiyama
https://www.reuters.com/article/us-usa- ... SKBN1YO1UN
"In phone call with Trump, China's Xi says U.S. interfering in internal affairs"
Steve Holland, Roxanne Liu
December 20, 2019 / 10:37 AM
WASHINGTON/BEIJING (Reuters) - U.S. President Donald Trump spoke on Friday with Chinese President Xi Jinping and claimed progress on issues from trade to North Korea and Hong Kong, but China said Xi accused the United States of interfering in its internal affairs.
The two leaders spoke a week after their envoys sealed a “Phase 1” agreement aimed at ending an 18-month trade war that has rattled markets and raised tensions.
Trump announced the phone call in a tweet.
A White House official said they spoke on Friday morning.
China Central Television said Xi spoke to Trump at the request of the U.S. president.
“Had a very good talk with President Xi of China concerning our giant Trade Deal."
"China has already started large scale purchase of agricultural product & more."
"Formal signing being arranged."
"Also talked about North Korea, where we are working with China, & Hong Kong (progress!)” Trump tweeted.
China’s Xinhua news agency said Xi told Trump that China is deeply concerned about “the negative words and deeds” of the United States on issues related to Taiwan, Hong Kong, Xinjiang and Tibet.
“These actions have interfered in China’s internal affairs, harmed China’s interests and undermined mutual trust and cooperation between the two sides,” Xinhua said.
The United States has called for the closure of mass detention camps in China’s western region of Xinjiang and expressed concern about the treatment of demonstrators in Hong Kong.
Xinhua said Xi hoped Trump would implement “the important consensus” reached during their meetings and phone calls and “pay close attention to and attach importance to China’s concerns, and prevent the interference of bilateral relations and the important agenda.”
China was angered when Trump last month signed legislation that authorizes sanctions on Chinese and Hong Kong officials responsible for human rights abuses in Hong Kong, in what was seen as support for pro-democracy activists.
Of paramount concern to the United States is a threat by North Korean leader Kim Jong Un for what Pyongyang has called a “Christmas gift.”
U.S. officials have interpreted this to mean either a nuclear weapons test or a ballistic missile test.
Trump and Kim have held three summits but failed to reach an agreement on lifting sanctions on North Korea in exchange for denuclearization by Pyongyang.
China and Russia on Monday proposed that the U.N. Security Council lift a ban on North Korea exports such as seafood and textiles, in a move the Russian U.N. envoy said was aimed at encouraging talks between Washington and Pyongyang.
The State Department, in response, said the U.N. Security Council should not be considering “premature sanctions relief” for North Korea as it is “threatening to conduct an escalated provocation, refusing to meet to discuss denuclearization.”
Chinese Vice Foreign Minister Le Yucheng met U.S. special envoy for North Korea Stephen Biegun on Friday, China’s foreign ministry said, Biegun’s second high-level meeting in Beijing in two days amid growing tension on the Korean peninsula.
North Korea has conducted a series of weapons tests in recent weeks and some experts say the reclusive state may be preparing for an intercontinental ballistic missile test soon.
Such a test would mark a break from the detente reached with the United States last year, dash any hopes of resuming talks on ending North Korea’s nuclear and missile programs and put the two countries back on a path of confrontation.
Xinhua said that Xi stressed to Trump that all parties need to seek a political settlement on the North Korean issue and that “all parties should meet each other halfway and maintain the momentum of easing dialogue, which serves the common interests of all parties.”
Reporting by Steve Holland and Susan Heavey; Editing by Dan Grebler and Chizu Nomiyama
https://www.reuters.com/article/us-usa- ... SKBN1YO1UN
Re: CHINA
MARKETWATCH
"Fed study finds Trump tariffs backfired"
By Greg Robb
Published: Dec 27, 2019 3:13 p.m. ET
President Donald Trump’s strategy to use import tariffs to protect and boost U.S. manufacturers backfired and led to job losses and higher prices, according to a Federal Reserve study released this week.
“We find that the 2018 tariffs are associated with relative reductions in manufacturing employment and relative increases in producer prices,” concluded Fed economists Aaron Flaaen and Justin Pierce, in an academic paper.
While the tariffs did reduce competition for some industries in the domestic U.S. market, this was more than offset by the effects of rising input costs and retaliatory tariffs, the study found.
“While the longer-term effects of the tariffs may differ from those that we estimate here, the results indicate that the tariffs, thus far, have not led to increased activity in the U.S. manufacturing sector,” the study said.
Tit-for-tat trade retaliation is an idea best relegated to the past, given the presence of globally interconnected supply chains, the Fed researchers found.
The top ten manufacturing industries hit by foreign retaliatory tariffs were producers of: magnetic and optical media, leather goods, aluminum sheet, iron and steel, motor vehicles, household appliances, sawmills, audio and video equipment, pesticide, and computer equipment.
The top ten industries hit by higher prices were: aluminum sheet, steel product, boilers, forging, primary aluminum production, secondary aluminum smelting, architectural metals, transportation equipment, general purpose machinery and household appliances.
The researchers don’t measure the effects on business confidence resulting from the uncertainty regarding U.S. international trade policy.
Many economists see this doubt about future government policy as a primary driver in the decline in business investment this year.
While the Federal Reserve did not specify companies affected by the U.S - China trade dispute of the past 18 months, semi-conductor and electronics manufacturers that depend on China for sales, like NVIDIA Corp., Micron Technology and Intel Corp. are seen as especially vulnerable in a trade war scenario.
Apple Inc. has been able to escape tariffs on its China-assembled phones to date.
While Chinese consumers mostly buy locally made automobiles, U.S. manufacturers like Tesla Inc. have been at risk.
The electric vehicle maker first raised the price of its Model S and Model X cars by $20,000 after a new round of trade tariffs but then cut and decided to absorb the difference.
However, together with its Chinese partners, General Motors sold 3.6 million vehicles in China in 2018, more than in the United States.
Some executives have blamed import tariffs for higher costs including heavy equipment manufacturer Caterpillar.
https://www.marketwatch.com/story/fed-s ... latestnews
"Fed study finds Trump tariffs backfired"
By Greg Robb
Published: Dec 27, 2019 3:13 p.m. ET
President Donald Trump’s strategy to use import tariffs to protect and boost U.S. manufacturers backfired and led to job losses and higher prices, according to a Federal Reserve study released this week.
“We find that the 2018 tariffs are associated with relative reductions in manufacturing employment and relative increases in producer prices,” concluded Fed economists Aaron Flaaen and Justin Pierce, in an academic paper.
While the tariffs did reduce competition for some industries in the domestic U.S. market, this was more than offset by the effects of rising input costs and retaliatory tariffs, the study found.
“While the longer-term effects of the tariffs may differ from those that we estimate here, the results indicate that the tariffs, thus far, have not led to increased activity in the U.S. manufacturing sector,” the study said.
Tit-for-tat trade retaliation is an idea best relegated to the past, given the presence of globally interconnected supply chains, the Fed researchers found.
The top ten manufacturing industries hit by foreign retaliatory tariffs were producers of: magnetic and optical media, leather goods, aluminum sheet, iron and steel, motor vehicles, household appliances, sawmills, audio and video equipment, pesticide, and computer equipment.
The top ten industries hit by higher prices were: aluminum sheet, steel product, boilers, forging, primary aluminum production, secondary aluminum smelting, architectural metals, transportation equipment, general purpose machinery and household appliances.
The researchers don’t measure the effects on business confidence resulting from the uncertainty regarding U.S. international trade policy.
Many economists see this doubt about future government policy as a primary driver in the decline in business investment this year.
While the Federal Reserve did not specify companies affected by the U.S - China trade dispute of the past 18 months, semi-conductor and electronics manufacturers that depend on China for sales, like NVIDIA Corp., Micron Technology and Intel Corp. are seen as especially vulnerable in a trade war scenario.
Apple Inc. has been able to escape tariffs on its China-assembled phones to date.
While Chinese consumers mostly buy locally made automobiles, U.S. manufacturers like Tesla Inc. have been at risk.
The electric vehicle maker first raised the price of its Model S and Model X cars by $20,000 after a new round of trade tariffs but then cut and decided to absorb the difference.
However, together with its Chinese partners, General Motors sold 3.6 million vehicles in China in 2018, more than in the United States.
Some executives have blamed import tariffs for higher costs including heavy equipment manufacturer Caterpillar.
https://www.marketwatch.com/story/fed-s ... latestnews
Re: CHINA
MARKETWATCH
"China Dec. Caixin final factory PMI slips to 51.5"
By MarketWatch
Published: Jan 2, 2020 7:06 a.m. ET
BEIJING--Activity in China's factories slowed slightly in December but remained in expansionary territory for the fifth straight month, according to a private survey.
The Caixin manufacturing purchasing managers index declined slightly to 51.5 from 51.8 in November as domestic demand and exports moderated, Caixin Media Co. and research firm Markit said Thursday.
However, the reading stayed above the 50 mark that separates an expansion in activity from contraction.
Although production continued to increase strongly, new orders growth softened, and growth in employment stagnated, Caixin and Markit said in a statement.
Also, selling prices rose for the first time in six months as operating expenses increased for the fourth month in a row, they said.
China's official manufacturing PMI remained unchanged at 50.2 in December, official data showed on Tuesday.
--Bingyan Wang
https://www.marketwatch.com/story/china ... 2020-01-02
"China Dec. Caixin final factory PMI slips to 51.5"
By MarketWatch
Published: Jan 2, 2020 7:06 a.m. ET
BEIJING--Activity in China's factories slowed slightly in December but remained in expansionary territory for the fifth straight month, according to a private survey.
The Caixin manufacturing purchasing managers index declined slightly to 51.5 from 51.8 in November as domestic demand and exports moderated, Caixin Media Co. and research firm Markit said Thursday.
However, the reading stayed above the 50 mark that separates an expansion in activity from contraction.
Although production continued to increase strongly, new orders growth softened, and growth in employment stagnated, Caixin and Markit said in a statement.
Also, selling prices rose for the first time in six months as operating expenses increased for the fourth month in a row, they said.
China's official manufacturing PMI remained unchanged at 50.2 in December, official data showed on Tuesday.
--Bingyan Wang
https://www.marketwatch.com/story/china ... 2020-01-02