BEIJING, September 5 -- China’s commerce ministry said that a phone call on Thursday with US top trade negotiators went very well, adding that Beijing opposes any escalation in the trade war.
Both sides will strive to achieve real progress during a high-level meeting scheduled for early October, ministry spokesman Gao Feng told reporters in a weekly briefing. China and the United States agreed to hold high-level trade talks in Washington, the ministry said earlier on Thursday, following a phone call between China’s Vice-Premier Liu He and US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin. Commerce Minister Zhong Shan, People's Bank of China Governor Yi Gang and deputy head of the economic planning commission Ning Jizhe were also on the call. The call came amid fears that an escalating trade war could trigger a global economic recession. "Both sides agreed that they should work together and take practical actions to create good conditions for consultations,” the ministry said. Trade teams from the two countries will hold talks in mid-September before the high-level talks next month, the ministry said. Both sides agreed to take actions to create favourable conditions, it said. A spokesman for the US Trade Representative’s office confirmed that Mr Lighthizer and Mr Mnuchin spoke with Mr Liu and said they agreed to hold ministerial-level trade talks in Washington “in the coming weeks”.
Washington began imposing 15 per cent tariffs on an array of Chinese imports on Sunday, while China began placing new duties on US crude oil. That prompted China to lodge a complaint against the United States at the World Trade Organisation. The United States plans to increase the tariff rate to 30 per cent from the 25 per cent duty already in place on US$250 billion (S$346 billion) worth of Chinese imports from Oct 1. US President Donald Trump warned on Tuesday that he would be tougher on Beijing in a second term if trade talks dragged on, compounding market fears that ongoing trade disputes between the United States and China could trigger a US recession. Chinese leaders will have a packed schedule next month, gearing up for National Day celebrations scheduled for Oct 1. They will also hold a key meeting in October to discuss improving governance and “perfecting” the country’s socialist system, state media has said, more than a year after the last was held. “Neither China nor the US want to be blamed by the rest of world for escalating the trade war and damaging the world economy,” said Mr Zhou Xiaoming, a former Chinese commerce ministry official and diplomat. “But the talks don’t mean the two sides will inch closer or that their stances soften,” he added.
Some within the Trump administration are sceptical that China is willing to make the sort of broad commitment to reforms sought by the US that caused a breakdown in talks in May, according to people familiar with the officials’ thinking. Others have become increasingly focused on trying to calm financial markets and forestall any further economic fallout in the US where Mr rump’s tariffs and the uncertainty surrounding the trade war are being blamed for a slowdown in manufacturing. It is unclear if the two sides will go back to a May draft agreement as the United States has been seeking. "No one is holding their breath” with regard to the talks, said Mr Chua Hak Bin, an economist at Maybank Kim Eng Research in Singapore. “Investors are slowly coming to terms that a trade deal is increasingly remote, with both sides talking tough and preparing for a long battle.”
SHANGHAI, August 26 -- China's currency on Monday (Aug 26) slid to its lowest point in more than 11 years as concerns over the US trade war and the potential for global recession weighed on markets.
The onshore yuan fell to 7.1487 to the US dollar, its weakest point since early 2008, in Asian trading. Global economic tensions have intensified in recent days with the US and China raising tariffs on each other's imports, and President Donald Trump calling on US businesses to pull out of China. The yuan is not freely convertible and the Chinese government limits its movement against the dollar to a two percent range on either side of a figure that the central bank sets each day to reflect market trends and control volatility. The People's Bank of China has set that rate steadily weaker in recent weeks and set it on Monday at 7.057 to the dollar. Allowing the yuan to depreciate makes Chinese exports cheaper and offsets some of the burden of punitive US tariffs. The yuan breached the key 7.0 threshold against the dollar earlier in August, days after the US announced plans to impose fresh tariffs on Chinese imports from September 1.
The U.S. administration of President Donald Trump has renewed sanctions on Iran after quitting Tehran's deal with Britain, China, France, Germany, Russia and the United States, which promised sanctions relief in exchange for curbs on its nuclear program. "Iran's active diplomacy in pursuit of constructive engagement continues," Zarif tweeted. "Road ahead is difficult. But worth trying." The minister departed on a government plane for Iran on Sunday evening. A source at the French presidential office said practical discussions at the G-7 summit led to Zarif's visit to Biarritz, which the United States had acknowledged. Macron is said to have personally contacted Trump.
G-7 leaders shared the view Saturday that Iran should not possess nuclear weapons, but differed in their approach to finding a solution. With U.S.-Iran tensions escalating, France, which has expressed hope the nuclear agreement will survive, has apparently been trying to mediate between Washington and Tehran, foreign affairs experts say. Zarif was already in France, having met with Macron in Paris on Friday.
ROTTERDAM, August 25 -- Eleven years after the global financial crisis, the European banking industry is once again preparing for tough days ahead.
After Deutsche Bank announced a large-scale layoff plan not long ago, another large European bank might follow suit to do the same. Italy’s largest bank by asset size UniCredit is considering 10,000 job cuts, accounting for 10% of the bank’s total global workforce. This layoff makes up part of the business plan that UniCredit will announce at the end of this year. UniCredit will announce at least 9,000 layoffs, and almost all the employees getting retrenched will be Italians. The negotiations between UniCredit and the union will begin after the announcement of its business plan for 2020-2023 on December 3 this year. The negotiations between both parties may help to reduce the number of layoffs from the original figures.
UniCredit is a European bank headquartered in Milan, with operations in 19 countries and having more than 28 million customers. It is also one of the largest banking groups in Europe. The core business of UniCredit is mainly distributed in the more well-off regions of Italy, Austria and southern Germany, as well as a large number of businesses in Central and Eastern Europe. With assets of EUR 91 billion, UniCredit has become the largest bank in the Eurozone, the third largest in Europe and the sixth largest in the world. However, its profitability is in decline. According to publicly-accessible information, UniCredit’s net profit for 2018 was EUR 3.892 billion, a decline of nearly 29% compared to a net profit of EUR 5.473 billion in 2017.
The recent frequent layoffs could be a possible indication that the European banking industry has not fully recovered from the financial crisis. After the crisis, the United States adopted quantitative and accommodative monetary and fiscal policies as guarantees, and through legislation to strengthen supervision of the banking industry. At the same time, the government helped the banks through the crisis by using national capital injection. The period of de-leveraging the banking industry is relatively short, and the profitability of the U.S. banking industry therefore recovered within a shorter span of time.
In Europe, there was a lack of a unified fiscal policy. It was only in November 2014 that the single regulatory mechanism for the banking sector in the euro zone was launched. The de-leverage of the European banking industry lacked sufficient policy support and assistance, hence slowing its process of deleveraging. Since the total loans of 27 banks in Europe account for a much higher proportion of non-financial debt than the United States, the impact on the economy in its de-leveraging process was much greater, which in turn affected its profitability.
On a more general level, the poor performance of the European banking industry stemmed from the slow recovery of the European economy and the tightening of banking regulations. Data from the World Bank reveals that from 2010 to 2017, the world’s GDP increased from US$ 65.96 trillion to US$ 80.73 trillion, representing an increase of 22.39%. Among them, the U.S. GDP increased from US$ 14.96 trillion to US$ 19.39 trillion, an increase of 29.61%. However, the EU’s GDP only increased from US$ 16.98 trillion to US$ 17.28 trillion, a mere 1.76% increase and far less than that of the United States. The economic growth of the EU is not only significantly lower than the global average, but also significantly lower than the United States.
The reason why European banking performance is closely related to its economy is because European banks, especially small and medium-sized banks, are not highly globalized, and their business is mainly located in Europe. Only a few larger banks, such as Deutsche Bank, have branches around the world that provide services to customers globally. As the global trade frictions intensify and the downward pressure on the economy increases, the profits of these large banks are being affected. Small and medium-sized banks whose businesses are mainly concentrated in Europe will see difficulty in achieving improvement.
After the financial crisis, especially since the European debt crisis, the strength of regulation in Europe has been increasing. The European debt crisis has exposed two major problems of the European banking industry. Banks conducting higher-risk businesses and the general EU financial system were under-regulated. To resolve this, the EU on the one hand has increased the banking capital adequacy requirements, prohibiting large banks from engaging in proprietary trading, and curbing excessive speculation in the banking industry. On the other hand, it established a banking industry alliance to form a unified regulatory mechanism, clearing mechanism and deposit insurance system. However, EU member states have major differences in the relevant new banking regulations. The increase in capital adequacy ratio and the divestiture of risky assets have augmented the stability of the banking industry. At the same time, it also led to a decline in the income and profit of the banking industry.
Kevin Dowd, a professor of finance and economics at Durham University, has previously analyzed that the large European banks have suffered setbacks in the United States, and also contraction of their business activities. However, a careful analysis will reveal that the main problem in the EU banking industry is happening in European soil. The European banking industry is facing a major repayment crisis, and this crisis has been brewing for a long time. The thorny issue facing the European banking industry is caused by none other than the EU itself.
Due to quantitative easing policies and excessive tolerance policies, the existing problems have worsened. Dowd believes that the EU banking industry is currently moving in the direction towards a crisis, and the EU bank’s bad debt loaning solution will fail to work. In the end, there will be the scenario where the taxpayers will have to bailout the banking industry who will then become too big to fail. It is worth noting that both Deutsche Bank and UniCredit are regarded as banks with high importance in the global financial system. If these banks are having problems, they will inevitably hold a major impact over the European financial system. In particular, the European economy has not recovered from the crisis so far. With the global trade war resulting in economic slowdown, the European Central Bank has clearly stated that in order to support economic growth, it may further introduce easing policies and even cut interest rates further.
Long-term negative interest rates have seriously affected the profitability of the European banking industry, and should the interest rates fall further, the impact on these banks will be even greater. As these banks get into trouble, they will also affect the lending behavior of enterprises, which will in turn drag down the growth of the entire European economy and thus turning these events into a vicious cycle. If this shock continues to expand, it may trigger a new round of global economic crisis.
Final analysis conclusion: The recent frequent layoffs in the European banking industry have highlighted its vulnerability in the post-crisis era, and in the context of global trade war and economic slowdown, this vulnerability may eventually evolve into a trigger for a new global economic crisis.
BEIJING, August 25 -- United States trade groups have joined in a chorus of opposition to the latest escalation of tariffs Washington threatened for all the Chinese imports.
It's been heard that "enough is enough" as intensified tensions roil stock markets, ruin businesses and rid farmers of their most important export markets. Last Friday, US President Donald Trump announced that he would hike duties on US$250 billion (S$346 billion) worth of Chinese goods from the current 25 per cent to 30 per cent starting from Oct 1, and the remaining imports of US$300 billion from the planned 10 per cent to 15 per cent from Sept 1. The move followed Beijing's plan last Thursday to raise tariffs on US$75 billion worth of US goods in retaliation to the US side's planned taxing on an additional US$300 billion worth of Chinese imports, which was announced earlier this month. China's Ministry of Commerce said on Saturday that the country is "firmly opposed" to Washington's "unilateral and bullying acts of trade protectionism and extreme pressure", and urged it to immediately stop its "erroneous practices". The ruling Communist Party's People's Daily said on Sunday that China will fight back against the latest US step to increase tariffs on Chinese goods. “China is confident that it will follow its own path and do its own things well, and will never waver in its stand on countering any provocations by the US side,” the newspaper said in a commentary.
US politicians, seeking to hamper China’s economic development, still want to use the tactics of exerting maximum pressure on China that has achieved few results, the paper said. But the US will not win the trade war because of the plight faced by its farmers and businesses. In the US, Mr Gary Shapiro, president and chief executive officer of the Consumer Technology Association, said that "enough is enough", as shown by the 623-point drop in the Dow last Friday. "Global markets are reeling on fears of a global recession. And today's (last Friday) announcement only inflicts more pain on American businesses, workers and families," said Mr Shapiro. "These escalating tariffs are the worst economic mistake since the Smoot-Hawley Tariff Act of 1930 - a decision that catapulted our country into the Great Depression," Mr Shapiro said. "Instead of making America great again, the president is using tariffs to make a great economic mistake - again." He continued: "How much longer will our families, companies and economy be forced to bear the financial burden of this misguided trade policy?" Mr Rick Helfenbein, president and chief executive officer of the American Apparel & Footwear Association, also lamented that what the US businesses now get is "a 1930s trade strategy" that will be a disaster for consumers, businesses, and the economy.
PARIS, August 24 -- Donald Trump landed in France with First Lady Melania for the G7 summit Saturday, after taking a swipe at fellow leaders, calling them "friends of mine, for the most part" but not in "100 percent of the cases".
The president threw shade at some of America's closest partners on Friday evening, mere hours before he'd see them in Biarritz at the Group of Seven summit. He threatened to tax French 'like they've never seen before' and characterized world leaders attending the event as 'friends for the most part' in front of Marine One. 'We're going to France. We'll have a good few days. I think it will be very productive, seeing a lot of leaders who are friends of mine, for the most part,' he said of his trip, smirking as he added, "Wouldn't say in 100 percent of the cases, but for the most part." He did not say which leaders were getting under his skin, but Trump offered several hints in the comments he delivered outside the White House before he left for Europe with first lady Melania. She arrived into Biarritz wearing a yellow dress with pink stiletto heels and sunglasses. The first lady had departed Washington wearing a Chanel jacket, white pants and a black top. Trump harped on France's digital tax, which he said U.S. tech companies don't deserve. He noted that he's 'not the biggest fan of the tech companies,' which he again accused them of interfering in his election.
Yet, he said, their regulation should be up to the United States, and not foreign countries like France. "I don't like what France did. They put a digital tax on our tech companies," he said. "Those are great American companies, and frankly, I don't want France going out and taxing our companies, very unfair." He cautioned French President Emmanuel Macron against moving ahead with the action that could spark a protracted trade war with the United States. It is understood the two world leaders will have an unscheduled lunch together Saturday. "If they do that, we'll be taxing their wine, or doing something else. We'll be taxing their wine, like they've never seen before," Trump promised. Whether he meant for the earlier jab about his 'friends' in the global community to land on Macron or another leader he'll be seeing like German Chancellor Angela Merkel was unclear.
TAIPEI, August 24 -- A US Navy ship passed through the Taiwan Strait on Friday, only three days after the US government approved an US$8 billion arms sale to the island’s military.
Taiwan’s defence ministry said in a statement that the transport landing ship sailed through the Taiwan Strait in a south-to-north direction, adding that the military has been keeping close watch on the situation so the Taiwanese public should rest assured. The passage of a US Navy vessel through the strait was the seventh of this year, and the first since the US government officially notified Congress on Tuesday of the proposed sale of the F16 fighter jets to Taiwan. That move added to already tense relations between Beijing and Washington and Beijing threatened to take “all necessary measures” to safeguard its interests, including sanctioning the US companies involved in the arms sale. Taiwan’s air force hopes to receive the 66 advanced variants of the F-16 Fighting Falcon multi role fighter by 2026. It is expected to use them to replace its ageing fleet of F-5E fighters at a base in Taitung county, eastern Taiwan. The F-16 is one of the mainstay fighters of the air force, the others being the Indigenous Defence Fighter, or IDF, and the Mirage 2000. Taiwan already has a fleet of F-16s, which are undergoing upgrades. The air force took possession of its first four upgraded F-16s in April. The Taichung-based Aerospace Industrial Development Corporation hopes to complete the retrofit programme by 2023.
Since 2008, US administrations have notified Congress of more than US$24 billion in foreign military sales to Taiwan, including the sale of M1A2 tanks and Stinger missiles valued at US$2.2 billion in the past two months. To date, the Trump administration alone has notified Congress of US$4.4 billion in arms sales to Taiwan. Taiwan and mainland China have been governed separately since the end of the civil war in 1949. Beijing, which regards Taiwan as a renegade province, insists the self-rule island must eventually be reunited with the mainland, by force if necessary.
BEIJING, August 24 -- China said Friday that it will impose further tariffs on U.S. imports worth around $75 billion, in retaliation for planned tariff hikes on Chinese products by Washington.
The Commerce Ministry said it will impose additional tariffs of 5 percent or 10 percent on a total of 5,078 products of U.S. goods, some of which would take effect on Sept. 1 and the rest on Dec. 15. China will also resume imposing additional tariffs of 25 percent and 5 percent on U.S.-made vehicles and auto parts starting from Dec. 15, the Customs Tariff Commission of the State Council announced. The announcement comes as U.S. President Donald Trump has pledged that Washington will impose 10 percent tariffs on $300 billion worth of Chinese goods, effective on those two dates, in a move that would see nearly all imports from Asia's biggest economy taxed. The U.S. decision "has greatly hurt interests" of China, the United States and other countries and "has seriously threatened the multilateral trade system and the free trade system," Beijing said, adding, "China is forced to take reciprocal measures." "We hope China and the United States will resolve differences in a manner acceptable to both sides on the premise of mutual respect, equality, good faith, and consistency of words and deeds," the Customs Tariff Commission said in a statement.
The Trump administration has so far imposed 25 percent levies on a total of $250 billion of Chinese imports in an effort to reduce the chronic U.S. trade deficit with China, as well as to address alleged intellectual property and technology theft by Chinese companies. On Aug. 13, it delayed imposing a 10 percent tariff on laptop computers, cellphones, video game consoles and other "certain articles" imported from China to Dec. 15 from Sept. 1 as planned. The announcement drew some relief from retailers and other businesses concerned that the new levies, which in combination with current ones would have meant tariffs on nearly all Chinese imports, could have dampened consumption especially around the holiday shopping season.
WASHINGTON, August 23 -- President of Eurasia Group Ian Bremmer said that this is not the first time US President Donald Trump has brought up the idea of reinstating the G8 format with Russia's participation.
There is no possibility of the G8 with Russia's participation being reinstated, president and founder of Eurasia Group Ian Bremmer said on Thursday. He was commenting on recent statements by US President Donald Trump on the need to reinstate the G8 format with Russia's participation. "It's not the first time that [US President Donald] Trump has brought this up actually. He mentioned it during the Canada-hosted G7 as well," Bremmer said. "But the reason for Russia's removal wasn't [former US President Barack] Obama being 'outsmarted' by [Russian President Vladimir] Putin, but the response to the annexation of Crimea, which the G7 countries considered, and still consider, illegal. There is no possibility of the G8 being reinstated," he added. "As you may have heard, French President Emmanuel Macron has decided not to even attempt a communique at the end of the summit that will be held on August 24-26 in France's Biarritz - the first time that's happened since the meetings started in 1975. It's a G-zero world," Bremmer noted.
The Group of Seven (G7) is an association of industrialized countries that brings together the United Kingdom, Germany, Italy, Canada, the United States, France and Japan. In 1997, it was renamed the Group of Eight (G8) after Russia joined the association. In 2014, Western countries decided to return to the G7 format after the developments in Ukraine and deterioration of relations with Russia.
NEW YORK, August 23 -- The Green New Deal proposed by Rep. Alexandria Ocasio-Cortez (Demecrate) today excludes nuclear energy from the proposed mix.
If it were ever actually attempted nationally, it would increase greenhouse gas emissions — just as a similar effort did in Vermont. The written statement distributed by the office of Ocasio-Cortez says "the plan is to transition off of nuclear." Vermont is home to Ocasio-Cortez allies, and Green New Deal advocates, Senator Bernie Sanders and climate activist Bill McKibben. Both insist the world can be powered on renewables alone. But consider what’s actually happened in their own state. In 2005, Vermont legislators promised to reduce emissions 25% below 1990 levels by 2012, and 50% below 1990 levels by 2028, through the use of renewables and energy efficiency only. What’s happened since? Vermont’s emissions rose 16.3%. That’s more than twice as much as national emissions rose during the same period.
When you account for the U.S.’s far faster growth in population, Vermont’s per capita emissions rose 5% while U.S. per capita emissions declined by 17%. Did Vermont fail to do energy efficiency, which the Green New Deal and green groups like Natural Resources Defense Council (NRDC) claim is the most important way to reduce emissions? Nope. In 2018, the American Council for an Energy-Efficient Economy ranked Vermont among the top five states for aggressive action on energy efficiency — for the fifth year in a row.