BOJ Kuroda: China economy to pick up in latter half of this year


February 26, 2019

TOKYO (Reuters) – Bank of Japan Governor Haruhiko Kuroda said on Tuesday he expected China’s economic growth to pick up in the latter half of this year thanks to stimulus measures taken by the government.

“China’s economy slowed quite significantly in the latter half of last year” as companies felt the pinch from Sino-U.S. trade tensions, Kuroda told parliament.

“The economy may remain in the doldrums in the first half of this year but will likely pick up thereafter, as authorities have taken fiscal and monetary stimulative action,” he said.

Reporting by Leika Kihara; Editing by Chang-Ran Kim

Source: Reuters “BOJ Kuroda: China economy to pick up in latter half of this year”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

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Trump delays increase in tariffs on Chinese goods, cites progress in talks


Jeff Mason, David Lawder February 24, 2019

WASHINGTON (Reuters) – President Donald Trump said on Sunday he would delay an increase in U.S. tariffs on Chinese goods scheduled for later this week thanks to progress in trade talks and said if progress continued, he and Chinese President Xi Jinping would seal a deal.

Trump had planned to increase tariffs to 25 percent from 10 percent on $200 billion worth of Chinese imports into the United States if a deal were not reached by Friday between the world’s two largest economies.

The president said in a tweet that progress had been made on a host of divisive areas including intellectual property protection, technology transfers, agriculture, services and currency.

As a result of the talks, he said: “I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!”

Mar-a-Lago is the president’s property in Florida, where the two men have met before.

The delay in tariffs was the clearest sign yet of a breakthrough the two sides have sought since calling a 90-day truce in a trade war last year. It will likely be cheered by markets as a sign of an end to the dispute that has disrupted commerce worth hundreds of billions of dollars of goods and slowed global economic growth.

During talks that extended into the weekend, U.S. and Chinese negotiators were discussing on Sunday the thorny issue of how to enforce a potential trade deal after making progress on other structural issues, according to a source familiar with the talks.
The two sides were discussing tariffs on Sunday as well as commodities, the source said.

U.S. officials said on Friday that talks would extend into the weekend after negotiators produced a deal on currency during talks last week.

Negotiators were seeking to iron out differences on changes to China’s treatment of state-owned enterprises, subsidies, forced technology transfers and cyber theft.

The two sides have been negotiating an enforcement mechanism. Washington wants a strong mechanism to ensure that Chinese reform commitments were followed through to completion, while Beijing insisted on what it called a “fair and objective” process. Another source briefed on the talks said that enforcement remained a major sticking point as of Saturday.

Trump said on Friday there was a “good chance” a deal would emerge, and foreshadowed that he might extend the March 1 deadline and move forward with a meeting with Xi.

Reporting by Jeff Mason and David Lawder; Additional reporting by Rajesh Kumar Singh and Howard Schneider; Editing by Peter Cooney

Source: Reuters “Trump delays increase in tariffs on Chinese goods, cites progress in talks

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Deployment of Warplanes on Chinese Aircraft Carrier


China’s Warship-Borne Weapons magazine says in its report “How will carrier-borne warplanes be deployed on Chinese aircraft carriers? Or it will carry at least 4 J-15Ds” that some web portal media have recently posted quite a few photographs of China’s J-15D electronic warfare warplanes, which means preparations are being made for the commissioning of J-15D that China has been researching and developing for many years. There will then be a perfectly complete configuration of warplanes on Chinese aircraft carriers including J-15 multifunctional fighter jets, J-15D electronic warfare warplanes and early warning, anti-submarine and general-purpose helicopters.

There will be at least 4 Z-18 early warning warplanes on the Liaoning or Type 001A aircraft carrier. Compared with Z-9, Z-18 is twice larger able to carry more equipment and personnel including a more powerful search radar. It can carry large dipping sonar, more anti-submarine torpedoes, sonarbuoys and magnetic detectors simultaneously. It has a maximum rage of 300 km and can track hundreds of targets in various directions and at different altitude.

There will be fix-wing early warning aircrafts for later version of carriers that are equipped with electromagnetic catapults.

It is expected that each carrier will carry 4 to 6 J-15D electronic warfare warplanes to provide support for J-15 fighter jets in operation.

Source: Warship-borne Weapons “How will carrier-borne warplanes be deployed on Chinese aircraft carriers? Or it will carry at least 4 J-15Ds” (summary translation by Chan Kai Yee from Chinese)


China’s Xi urges financial risk prevention while seeking stable growth


February 23, 2019

BEIJING (Reuters) – China should seek stable development of its economy while not forgetting to fend off risks to its financial system, Chinese President Xi Jinping said, state news agency Xinhua reported on Saturday.

China’s economy is growing at its slowest pace in almost 30 years, spurring policymakers to bolster growth by easing credit conditions and cutting taxes.

“It is necessary to focus on preventing risks on the basis of steady growth, while strengthening the countercyclical adjustment of fiscal policy and monetary policy and ensuring that the economy operates in a reasonable range,” Xi said.

Preventing and resolving financial risks, especially systemic financial risks, is a fundamental task, the agency cited Xi as telling a study session for senior Communist Party officials on Friday.

On Wednesday, Premier Li Keqiang reiterated that China would not resort to “flood-like” stimulus such as it unleashed in past downturns.

But after a spate of weak data, investors are asking if Beijing needs to speed or boost support to reduce the risk of a sharper slowdown.

Until now, China has refrained from cutting benchmark interest rates to spur the slowing economy, which would ease financing costs but risk adding to a mountain of debt.

To free up more funds for lending to small and private businesses, the central bank has cut the reserves that banks need to set aside five times in the past year.

Last month, Chinese banks made the most new loans on record, a total of 3.23 trillion yuan ($481 billion). A central bank official said previously that no credit floodgate had been opened, and the lending jump showed recent easing steps were working.

China’s financial sector must serve the real economy, Xi said, but stable growth and risk prevention must be balanced.

Reporting by Ben Blanchard, Judy Hua and Ryan Woo; Editing by Jacqueline Wong and Clarence Fernandez

Source: Reuters “China’s Xi urges financial risk prevention while seeking stable growth”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Trump says he’s inclined to extend China trade deadline and meet Xi soon


Jeff Mason, David Lawder February 23, 2019

WASHINGTON (Reuters) – President Donald Trump said on Friday there was “a very good chance” the United States would strike a deal with China to end their trade war and that he was inclined to extend his March 1 tariff deadline and meet soon with Chinese President Xi Jinping.

U.S. and Chinese negotiators had made progress and will extend this week’s round of negotiations by two days through Sunday, Trump told reporters at the White House as he met with his top negotiators and their counterpart, Chinese Vice Premier Liu He.

“I think that we both feel there’s a very good chance a deal will happen,” Trump said.

The Republican president said he probably would meet with Xi in March in Florida to decide on the most important terms of a trade deal.

Extending the deadline would put on hold Trump’s threatened tariff increase to 25 percent from 10 percent on $200 billion of Chinese imports into the United States. That would prevent a further escalation in a trade war that already has disrupted commerce in goods worth hundreds of billions of dollars, slowed global economic growth and roiled markets.

Optimism that the two sides will find a way to end the trade war lifted stocks, especially technology shares. The S&P 500 stock index reached its highest closing level since Nov. 8. Oil prices rose to their highest since mid-November, with Brent crude reaching a high of $67.73 a barrel. [.N] [O/R]

CURRENCY AGREEMENT

Trump and Treasury Secretary Steven Mnuchin said the two sides had reached an agreement on currency. Trump declined to provide details, but U.S. officials long have expressed concerns that China’s yuan is undervalued, giving China a trade advantage and partly offsetting U.S. tariffs.

Announcement of a pact aimed at limiting yuan depreciation was putting “the currency cart before the trade horse,” but would likely be positive for Asian emerging market currencies, said Alan Ruskin, global head of currency strategy at Deutsche Bank in New York.

“How can you agree to avoid excessive Chinese yuan depreciation or volatility if you have not made an agreement on trade that could have huge FX implications?” Ruskin asked in a note to clients.

In a letter to Trump read aloud by an aide to Liu at the White House, Xi called on negotiators to work hard to strike a deal that benefits both country.

Trump said a deal with China may extend beyond trade to encompass Chinese telecommunications companies Huawei Technologies and ZTE Corp.

The Justice Department has accused Huawei of conspiring to violate U.S. sanctions on Iran and of stealing robotic technology from T-Mobile US Inc.

Chinese peer ZTE was last year prevented from buying essential components from U.S. firms after pleading guilty to similar charges, crippling its operations.

MEMORANDUMS NO MORE

Trump appeared at odds with his top negotiator, U.S. Trade Representative Robert Lighthizer, on the preliminary terms that his team is outlining in memorandums of understanding for a deal with China. Trump said he did not like MOUs because they are short term, and he wanted a long-term deal.

“I don’t like MOUs because they don’t mean anything,” Trump said. “Either you are going to make a deal or you’re not.”

Lighthizer responded testily that MOUs were binding, but that he would never use the term again.

Reuters reported exclusively on Wednesday that the two sides were drafting the language for six MOUs covering the most difficult issues in the trade talks that would require structural economic change in China.

Negotiators have struggled this week to agree on specific language within those memorandums to address tough U.S. demands for structural changes in China’s economy, according to sources familiar with the talks. The six memorandums include cyber theft, intellectual property rights, services, agriculture and non-tariff barriers to trade, including subsidies.

An industry source briefed on the talks said both sides have narrowed differences on intellectual property rights, market access and narrowing a nearly $400 billion U.S. trade deficit with China. But bigger differences remain on changes to China’s treatment of state-owned enterprises, subsidies, forced technology transfers and cyber theft of U.S. trade secrets.

Lighthizer pushed back when questioned on forced technology transfers, saying the two sides made “a lot of progress” on the issue, but did not elaborate.

The United States has said foreign firms in China are often coerced to transfer their technology to Chinese firms if they want to operate there. China denies this.

The U.S. Chamber of Commerce on Friday urged the U.S. government to ensure the deal was comprehensive and addressed core issues, rather than one based on more Chinese short-term purchases of goods.

China has pledged to increase purchases of agricultural produce, energy, semiconductors and industrial goods to reduce its trade surplus with the United States.

China committed to buying an additional 10 million tonnes of U.S. soybeans on Friday, U.S. Agriculture Secretary Sonny Perdue said on Twitter. China bought about 32 million tonnes of U.S. soybeans in 2017. The commitments are a “show of good faith by the Chinese” and “indications of more good news to come,” Perdue wrote.

China was the top buyer of U.S. soybeans before the trade war, but Beijing’s retaliatory tariffs on U.S. soybeans slashed business that had been worth $12 billion annually.

Additional reporting by Rajesh Kumar Singh, Makini Brice, Lisa Lambert and Tim Ahmann in Washington and Chris Prentice in New York, writing by Simon Webb and David Lawder; editing by Marguerita Choy and Tom Brown

Source: Reuters “Trump says he’s inclined to extend China trade deadline and meet Xi soon”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Trump says could include Huawei and ZTE in trade deal


February 23, 2019

WASHINGTON (Reuters) – U.S. President Donald trump said on Friday he may or may not include Chinese telecommunications companies Huawei Technologies and ZTE Corp in the trade deal being negotiated between the United States and China.

The Justice Department has charged Huawei and its chief financial officer with conspiring to violate U.S. sanctions on Iran by doing business through a subsidiary it tried to hide. The United States is seeking her extradition.

In a separate case, the Justice Department charged the telecommunications equipment maker with stealing robotic technology from T-Mobile US Inc. Huawei has said the companies settled their dispute in 2017.

Trump told reporters at the White House that U.S. officials are not talking about dropping charges against Huawei.

Huawei will be raised with U.S. attorneys and the attorney general in the coming weeks, Trump said, but “right now it’s not something that we’re discussing.”

Last year, Chinese peer ZTE was prevented from buying essential components from U.S. firms after pleading guilty to similar charges, crippling its operations.

ZTE resumed normal business after paying up to $1.4 billion in fines and replacing its entire board, on top of a near $900 million penalty paid in 2017.

It is not clear how ZTE could be involved in any trade agreement.

Reporting by Jeff Mason; Editing by James Dalgleish and Richard Chang

Source: Reuters “Trump says could include Huawei and ZTE in trade deal”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


China has agreed to buy up to $1.2 trillion in U.S. goods: CNBC


February 23, 2019

WASHINGTON (Reuters) – China has agreed to buy up to $1.2 trillion in goods from the United States as part of the current negotiations to end the trade war between the countries, CNBC reported on Friday, citing sources familiar with the situation.

Trump and Chinese President Xi Jinping could meet in late March in Florida, CNBC also reported.

CNBC said though that the two sides remain far apart on a key issue for the United States: the forced transfer of intellectual property. Negotiators have been meeting in Washington this week, with President Donald Trump scheduled to talk with Chinese Vice Premier Liu He on Friday afternoon, in the hopes of coming closer to a trade deal before March 1, when U.S. tariffs on a variety of goods are set to rise to 25 percent from 10 percent.

Two members of the Chinese delegation, who did not give their names, told Reuters they did not know if talks would be extended beyond Friday. They are scheduled to leave for Beijing on Saturday, according to a member of staff at their hotel.

Reuters reported exclusively on Wednesday that the two sides are starting to sketch out an agreement on structural issues, drafting language for six memorandums of understanding on proposed Chinese reforms.

Reporting by Lisa Lambert and Timothy Ahmann in Washington; Editing by James Dalgleish and Chizu Nomiyama

Source: Reuters “China has agreed to buy up to $1.2 trillion in U.S. goods: CNBC”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.