Skip to main content

Trade war, day 97: U.S. Treasury tightens investment oversight, warns against yuan devaluation

The U.S. Treasury Department took two actions today that dialed up the financial stakes of the U.S.-China trade war.

First, it initiated a toughened investment regime, approved by the U.S. Congress this summer under the Foreign Investment Risk Review Modernization Act (Firrma).This act “expanded the purview of the Committee on Foreign Investment in the United States” to be “able to review a much wider array of deals, including joint ventures and smaller investments by foreigners in American businesses that make technology deemed critical for national security reasons,” according to the New York Times(porous paywall).The regime will remain a “pilot program” for one month, and will become formalized on November 10.Second, it warned China against currency devaluations. Steven Mnuchin, the Treasury secretary, told the Financial Times (paywall) “that the Treasury monitored currency issues ‘very carefully’ and noted that the Chinese renminbi had fallen ‘significantly’ during the year, adding that he wanted to discuss the currency with Beijing as part of trade talks.”This comes as the Chinese yuan, also known as the renminbi, approaches the “key psychological level” of seven yuan per dollar, a level it “hasn’t breached in a decade,” Bloomberg reports (porous paywall). Right now, one dollar buys about 6.92 yuan — only half a year ago, a dollar bought about 6.3 yuan.But China is “not purposefullydevaluing the currency,” write the economists at Trivium, as devaluation is instead a natural outcome of “the trade war and diverging monetary policy in the two countries.” Reuters even reports that “China is suspending approvals for a niche overseas investment product in Shanghai,” which can be seen as a precaution against capital outflow and another of many protections put in place against rapid devaluation.

All the financial doom and gloom hit stock markets today — “Stocks suffered their steepest drop in eight months,” the New York Times reports (porous paywall):

“The Standard & Poor’s 500-stock index dropped 3.3 percent, bringing the broad equity benchmark down 4.4 percent for the month. The yield on the 10-year Treasury note, a key measure of borrowing costs, inched up to more than 3.24 percent during the trading day before declining.”

For more trade war news, please click through to SupChina.

—Lucas Niewenhuis


Popular posts from this blog

Balochistan to establish first medical university

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
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…