Skip to main content

China Economic Review: Daily Update

China Economic Review, Newsletter

TRADE WAR



1. Trump and Xi to meet at G20 summit in November

Officials in Washington and Beijing have agreed for US President Donald Trump to meet with Xi Jinping at the end of November, the Wall Street Journal reports, with hopes that fresh talks will take the heat out of recent trade tensions.

The meeting will take place during the G20 leaders’ summit in Buenos Aires next month. The White House had previously cast doubt on whether or not talks would go ahead, calling on Beijing to provide preliminary trade concessions before reaching any agreement.

Treasury Secretary Steven Mnuchin and chief economic adviser Larry Kudlow are reportedly backing the meeting, whilst the administration’s China hawks Robert Lighthizer and trade adviser Peter Navarro are sceptical that any talks could bring a premature end to the trade war.

“The plan is to get Trump in a room with Xi, get a small win and declare an end to the whole thing,” one source told the Journal.

The Chinese delegation will also include vice-premier Liu He, who led previous negotiations in Beijing and Washington earlier this year.

PROPERTY



2. Anger brews among homeowners over falling property prices

Weak sales figures and several violent protests are causing concern for China’s property developers, the South China Morning Post reports, at a time of the year usually known for its upbeat housing market.



Last week’s public holiday saw at least two incidents of angry homeowners attacking the offices of developer Country Garden after it was revealed new listings had been recently sold at discounts as high as 30%.

Housing demand has been on a downwards trend in both cities where the protests took place. In Shangrao, the location of the first outburst, sales fell 22% in September from August and 18% year-on-year.

A similar effect is unfolding in China’s largest cities. Despite a slight uptick in sales compared with last year, prices dropped 3% last month from August and 1.4% y/y.

Beijing is attempting to balance competing interests regarding the country’s housing market, which has enjoyed decades-long growth but stoked fears of a bubble. Attempts to cool the market, however, have clashed with recent goals to boost domestic demand of which the property sector is a key component.

FOREIGN EXCHANGE



3. Washington backtracks on China currency manipulation claims

The US Treasury Department has concluded that China is not deliberately devaluing its currency, sources told Bloomberg, ahead of the release of the Treasury’s biannual foreign currency report next week.

Treasury Secretary Steve Mnuchin has yet to confirm the verdict, however, and may still publish the report supporting the allegations of manipulation.

Mnuchin has been pressured by the President to denounce China as a currency manipulator in the past but has not had the evidence to back the claims, the sources said.

A withdrawal of the suspicions from public rhetoric may help to defuse some of the recent tensions between the two countries, who are currently locked in an escalating trade war.

China will remain on a currency manipulation watchlist, however, regardless of the outcome of next week’s report. Beijing’s large trade surplus with the US and illiberal trade practices are expected to be the topic of the report.

MARKETS & FINANCE

4. Chinese equities fall to four-year low

Both of China’s mainland stock exchanges fell to depths not seen since 2014 on Thursday following cues of a global rout prompted by a sell-off in the US.

The Shanghai Composite Index closed down 5.33% at 2,578.58, Caixin reports, while the Shenzhen bourse lost over 6% falling to 7,521.40. The tremors were felt in Hong Kong, where the Hang Seng – an offshore option for many Chinese companies – closed down 3.6% yesterday.

Over 1000 companies hit their daily movement limits, after which trading of the stock ceases. Over Rmb 358 billion ($52 billion) of stocks changed hands on the two bourses, rising 52% from the day before.

Thursday’s chaos brings the Shanghai Composite’s year-to-date loss to the verge of 20%. The index is down 27% from highs in January.

AUTOS



5. Chinese auto firms appeal for tax cut amid flagging sales

The China Automobile Dealers Association (CADA) is in talks with the finance and commerce ministries over cutting existing car purchase taxes by up to 50%, members of the association told Reuters.

The commerce ministry met with representatives from the auto industry earlier this week to brainstorm means of revving up demand as fears of a slowdown in sales mount, according to the sources.

“The overall car market is weak this year. Dealers I know are struggling to maintain their sales volumes as they feel pressure from both car makers and cash flow,” said one CADA official.

CADA has been similarly consulted on previous occasions, such as in 2016 when the purchase tax was last cut and China surged forward as the world’s largest auto market.

One source said that the association was asking for the 10% purchase tax to be halved on cars with a 2.0 litre capacity of below. No specifics on the commerce or finance ministries response were given.

Other stories:

China exports resist tariff pressure but imports weaken

Demand for Chinese exports accelerated in September despite the challenge posed by Donald Trump’s tariff measures, but a weaker domestic outlook weighed on import figures.

Shantytown compensation policy to be “fine-tuned”, says housing ministry [China Daily]

China’s top housing planner has defended recent policies to compensate shantytown residents using monetary means, according to state media, arguing that it has not created an upward push on prices.

Alipay says financial hackers used Apple IDs to access phones [Technode]

Hundreds of iPhone users in China saw money leaked from accounts connected with their Apple ID, reports. The losses spilled over into other payment platforms such as Alipay, who has approached Apple regarding solutions to the problem.

Fosun group look for buyer of major New York property [Caixin]

The investment group has listed an unspecified stake in the Manhattan skyscraper, expected to be worth $1.6 billion after the deal.

BMW seize majority stake in China business with $4 billion bid [Financial Times]

The German car giant announced on Thursday that it will pay $4.2 billion to triple the stake in its Chinese joint venture, BMW Brilliance.

Comments

Popular posts from this blog

Balochistan to establish first medical university

https://www.dawn.com/news/1366135

The Newspaper's Staff CorrespondentOctober 25, 2017QUETTA: The provincial cabinet on Tuesday approved the draft for establishing a medical university in Balochistan.Health minister Mir Rehmat Saleh Baloch made the announcement while speaking at a press conference after a cabinet meeting.“The cabinet has approved the draft of the medical university which would be presented in the current session of the Balochistan Assembly,” he said, adding with the assembly’s approval the Bolan Medical College would be converted into a medical university.Published in Dawn, October 25th, 2017

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میںPlease help the deserving persons...Salary:Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows;Welder: Rs. 1,700 dailyHeavy Duty Driver: Rs. 1,700 dailyMason: Rs. 1,500 dailyHelper: Rs. 850 dailyElectrician: Rs. 1,700 dailySurveyor: Rs. 2,500 dailySecurity Guard: Rs. 1,600 dailyBulldozer operator: Rs. 2,200 dailyConcrete mixer machine operator: Rs. 2,000 dailyRoller operator: Rs. 2,000 dailySteel fixer: Rs. 2,200 dailyIron Shuttering fixer: Rs. 1,800 dailyAccount clerk: Rs. 2,200 dailyCarpenter: Rs. 1,700 dailyLight duty driver: Rs. 1,700 dailyLabour: Rs. 900 dailyPara Engine mechanic: Rs. 1,700 dailyPipe fitter: Rs. 1,700 dailyStorekeeper: Rs. 1,700 dailyOffice boy: Rs. 1,200 dailyExcavator operator: Rs. 2,200 dailyShovel operator: Rs. 2,200 dailyComputer operator: Rs. 2,200 dailySecurity Supervisor: Rs. 2,200 dailyCook for Chinese food: Rs. 2,000 dailyCook…

Germany’s Siemens sets up Belt and Road office in Beijing

https://gbtimes.com/germanys-siemens-sets-up-belt-and-road-office-in-beijing
Germany’s Siemens sets up Belt and Road office in Beijingby Janne Suokas Mar 23, 2018 15:20 TRADEINVESTMENTBELT AND ROAD INITIATIVEGerman industrial and engineering group Siemens will set up a Belt and Road office in Beijing. surberFlickrCC BY 2.0
German industrial and engineering group Siemens will set up an office in Beijing to boost international cooperation under China’s Belt and Road initiative, the company said on Friday.The move will help strengthen Siemens’ cooperation with Chinese and international companies and expand business opportunities brought about by the Belt and Road initiative, according to the company’s statement.The Belt and Road initiative is China’s ambitious project to boost trade and infrastructure investment in more than 65 countries along the ancient Silk Road trade routes from Asia to Europe and Africa.Siemens said it had already partnered with hundreds of Chinese companies in overse…