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June 19, 2019

China signals currency war truce ahead of Xi Jinping’s meeting with Donald Trump at G20 in Japan

China has signalled its intention to not “weaponise” the yuan’s exchange rate as a message of good faith ahead of next week’s meeting between President Xi Jinping and US counterpart Donald Trump at the G20 summit in Japan, according to an analyst.To facilitate propping up the yuan just days before the two world leaders meet in Osaka, The People’s Bank of China (PBOC), China’s central bank, will sell 20 billion yuan (US$2.9 billion) of one-month bonds and 10 billion yuan of six-month bonds in…
June 19, 2019

Xi Jinping and Donald Trump to broaden agenda beyond US-China trade war for meeting at G20 summit in Osaka

When Chinese President Xi Jinping meets his US counterpart Donald Trump in Japan at the end of the month they are expected to discuss a broad range of issues, including the trade war, in an effort to stop the relationship from tilting towards sustained confrontation, analysts said.Neither side has provided an agenda for the meeting on the sidelines of the G20 leaders summit in Osaka, despite confirmation coming from both sides that it was to take place, after weeks of speculation.A summary of…
June 19, 2019

Apple said to ask suppliers, including Foxconn, to explore major shift out of China to Southeast Asia

Apple has asked its largest suppliers to consider the feasibility of shifting 15 to 30 per cent of its output from China to Southeast Asia in a dramatic shake-up of its production chain, the Nikkei reported.The US tech giant asked “major suppliers” to evaluate the cost of such a migration, the newspaper cited multiple sources as saying. Those included iPhone assemblers Foxconn Technology Group, Pegatron and Wistron, MacBook maker Quanta Computer, iPad maker Compal Electronics and AirPods makers…
June 19, 2019

Will the trade war mean US pig farmers miss out on their ‘single greatest sales opportunity’ in China?

This story is part of an ongoing series on US-China relations produced jointly by the South China Morning Post and POLITICO, with reporting from Asia and the United States.With African swine fever cutting China's pig population in half, it may be no longer able to satisfy the nation's demand for pork, theoretically opening the door for farmers in the United States to fill the void.But in retaliation to the tariffs placed on Chinese imports by US President Donald Trump, pork going to China from…
June 19, 2019

Singapore minister says US-China trade war could develop into ‘clash of civilisations’

Mistrust between China and the United States is unlikely to be repaired in the short term and might turn the ongoing trade tensions into “a clash of civilisations”, according to Singapore’s senior minister of state for trade, industry and education.Chee Hong Tat, having seen the rhetoric between China and the US intensify after the Trump administration increased tariffs at the start of May and threatened further duties, believes time and patience will be required to see an improved…
June 19, 2019

No quick fix to overcome lack of trust behind US-China trade war, Singapore minister says

Mistrust between China and the United States is unlikely to be repaired in the short term, according to Singapore’s senior minister of state for trade, industry and education.Chee Hong Tat, having seen the rhetoric between China and the US intensify after the Trump administration increased tariffs at the start of May and threatened further duties, said that time and patience would be required to see an improved understanding between the world’s two largest economies.“The Sino-US trade war is…
June 18, 2019

Is China’s concern over a possible US dollar shortage risk forcing companies to sell overseas assets?

This is the final article in a three-part series looking at China’s US dollar shortage risks in the trade war, as it aims to open up its markets.Anbang Insurance Group’s decision to sell its condos at the Waldorf Astoria hotel in New York is the latest in the string of high-profile Chinese divestments that underscores China’s concern that the nation is running short of US dollars.The Chinese holding company bought the Waldorf for a record US$1.95 billion in 2014, but under pressure from the…
June 18, 2019

Robert Lighthizer: ‘Absolutely’ OK to use tariffs to squeeze nations on non-trade issues

This story is published in a content partnership with POLITICO. It was originally reported by Megan Cassela on politico.com on June 18, 2019.US Trade Representative Robert Lighthizer said on Tuesday he sees no issue with President Donald Trump's inclination to use tariffs to pressure countries to make policy changes in areas unrelated to trade, specifically when they present threats to national security.Lighthizer, in testifying before the Senate Finance Committee, was asked about Trump's…
June 18, 2019

Donald Trump and Xi Jinping confirm G20 meeting and restarting of US-China trade war talks

US President Donald Trump confirmed on Twitter on Tuesday that he and his Chinese counterpart, Xi Jinping, would meet next week at the G20 summit in Japan, adding that trade talks with China would resume before the meeting. The Chinese president, meanwhile, told Trump he was “willing” to meet and agreed that the two sides should keep their communications open, according to Chinese state media reports. The meeting’s confirmation and the restarting of talks were the first positive developments…
June 18, 2019

US-China trade war weighed on Beijing’s decision not to pursue WTO market economy status, analysts say

The ongoing trade war with the United States was an important factor in China’s decision to halt a case against the refusal of the European Union to grant Beijing “market economy” status at the World Trade Organisation, analysts say. The pursuit of market economy status has been a long-term strategic goal for China, since it would enable it to avoid the anti-dumping cases it often faces because of its model of selling cheap goods to developed markets. It would also be a symbolic recognition of…
June 18, 2019

How Chinese machine parts manufacturer Impro Precision is mitigating trade war tariffs

Impro Precision, a major Chinese maker of parts used in cars, construction and aerospace equipment, said it is localising its factories to reduce exposure to tariffs as the trade war intensifies.The Hong Kong-based precision manufacturing company, which has factories in mainland China and Europe, is seeking to open a larger plant in Mexico to supply US customers, which generated 42 per cent of its HK$3.75 billion revenue last year.To raise funds to build the plant, it announced a global…
June 18, 2019

China’s stockpile of US notes, bills and bonds shrinks to a two-year low as trade war rages on

The US government reported that China’s holdings of Treasuries fell to a two-year low, a slump that’s coincided with an escalation in tensions between the world’s two largest economies.China’s stockpile of US notes, bills and bonds declined by US$7.5 billion in April to US$1.11 trillion, according to Treasury Department data released Monday in Washington.Long-time observers of the data, including former Treasury official Brad Setser, have argued that some of China’s purchases are routed through…
June 17, 2019

Greater Bay Area entrepreneurs fear fallout on their businesses after US tech sanctions hit Huawei’s operations

It’s business as usual for Zhou Kang.The Shenzhen-based entrepreneur’s company, Czur Tech, is a niche maker of portable digital scanners that requires components from more than 200 suppliers. He sources most of them locally, except for a few key chips and sensor, which he imports from Japan. And so far this year his company has exported more than 10,000 scanners to the US priced between US$299 and US$3,000 that can convert a 300-page book into a digital format within minutes.Although the…
June 17, 2019

How the US plans to crack down on Chinese facial recognition tech used to ‘strengthen authoritarian governments’

A United States senator is pushing to ban countries including China from an influential US government accuracy test of facial recognition technology, potentially opening up a new front in the escalating tech war between Washington and Beijing.Democratic Senator Brian Schatz of Hawaii has proposed the “End Support of Digital Authoritarianism Act” to bar companies from China, North Korea, Russia, Iran and other countries that consistently violate “internationally recognised human rights” from the…
June 17, 2019

To fight Donald Trump’s China tariffs, hundreds of US companies descend on Washington

New Balance Athletics has long advocated for and benefited from tariffs, competing with Nike and other footwear companies while still making shoes in the US. Now, it is among the critics of US President Donald Trump’s duties testifying at a public hearing that started Monday.The Boston-based firm said while it supports Trump’s efforts to force China to address intellectual property theft in a trade deal, its US factories are supported by a global supply chain connected to China and built over…
June 17, 2019

Chinese economic reforms are ‘the only way out’ of US trade war, says veteran government adviser

Reforms to China’s highly-leveraged economy are “the only way out” of its current economic malaise, according to a veteran government adviser, who questioned whether Beijing’s stimulus measures would be effective in riding out the trade war with the United States.The Chinese government has scaled back efforts at curbing debt levels, instead turning to infrastructure investment and consumer spending as a means of encouraging growth, with the policies enjoying popular support among many scholars…
June 17, 2019

China’s top economic planner refuses to rule out playing rare earths card against US

China’s top economic planning agency has once again declined to rule out the use of rare earths as weapon against the US, as relations between the two sides continue to deteriorate.Meng Wei, a spokeswoman for the National Development and Reform Commission, told a press briefing on Monday that China, which makes up 90 per cent of the global supply of rare earths, was “promptly studying” measures to utilise the “special value of rare earths as a strategic resource”.These included steps to improve…
June 17, 2019

London-Shanghai stock connect goes live, allowing foreign firms to list their shares in mainland China for the first time

Foreign companies will be able to list their shares in mainland China for the first time starting today, with the official launch of the long-awaited London-Shanghai Stock Connect scheme.The groundbreaking project, which will enable firms listed in the UK and mainland China to raise funds on each other’s stock market, is seen as a major step for Beijing in its efforts to internationalise its markets. It had originally been scheduled to launch in December.Huatai Securities, one of China’s…
June 17, 2019

Singapore exports suffer biggest fall in three years as exposure to Chinese economy, US trade war bites

Concerns over Singapore’s exposure to the Chinese economy mounted on Monday after new data showed that its non-oil exports fell by 15.9 per cent in May, the largest decline for more than three years.Exports to China and Hong Kong slumped by 23.3 per cent and 24.8 per cent from a year earlier respectively, showing Singapore’s vulnerability to fluctuations in regional trade as an important trade and shipment hub for Asia-Pacific.Many of the goods bound for China from other nations pass through…
June 17, 2019

China asks state-owned ‘national champions’ to help ‘stabilise’ economy, boost profits by 9 per cent in 2019

China’s biggest 97 industrial conglomerates, known as the country’s national champions, have been asked to play their part as “stabilisers” in the national economy in a bid to offset the trade war with the United States by boosting their profits by 9 per cent in 2019, according to the state-owned Xinhua News Agency.The State-owned Asset Supervision and Administration Commission (SASAC) set the target for the enterprises under its direct control, including state-owned oil and electric companies,…