China’s top banking regulator: Any yuan bears will suffer ‘heavy losses’

China’s banking and insurance regulator on Saturday said it did not expect a persistent decline in the yuan and warned speculative short sellers they would suffer “heavy losses” if they bet against the currency. The yuan has lost more than 2.5% against the dollar since the festering China-U.S. trade dispute intensified earlier this month. It is now less than a tenth of a yuan away from the 7-per-dollar level authorities have in the past indicated as a floor. “Those who speculate and short the yu


China’s banking and insurance regulator on Saturday said it did not expect a persistent decline in the yuan and warned speculative short sellers they would suffer “heavy losses” if they bet against the currency. The yuan has lost more than 2.5% against the dollar since the festering China-U.S. trade dispute intensified earlier this month. It is now less than a tenth of a yuan away from the 7-per-dollar level authorities have in the past indicated as a floor. “Those who speculate and short the yu
China’s top banking regulator: Any yuan bears will suffer ‘heavy losses’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-25
Keywords: news, cnbc, companies, suffer, bears, moving, large, insurance, money, short, yuan, chinas, regulator, hot, real, banking, heavy, losses, speculative


China's top banking regulator: Any yuan bears will suffer 'heavy losses'

China’s banking and insurance regulator on Saturday said it did not expect a persistent decline in the yuan and warned speculative short sellers they would suffer “heavy losses” if they bet against the currency.

The yuan has lost more than 2.5% against the dollar since the festering China-U.S. trade dispute intensified earlier this month. It is now less than a tenth of a yuan away from the 7-per-dollar level authorities have in the past indicated as a floor.

“Short-term fluctuation of the yuan exchange rate is normal, but in the long-run, China’s economic fundamentals determine that the yuan will not depreciate persistently,” Xiao Yuanqi, the spokesman for the China Banking and Insurance Regulatory Commission (CBIRC), told a finance forum in Beijing.

“Those who speculate and short the yuan will for sure suffer heavy loss.”

Xiao was reading from a script prepared for Guo Shuqing, CBIRC’s chairman and the Communist Party chief of the People’s Bank of China (PBOC). Guo was scheduled to give a speech at the same forum but couldn’t make it due to last minute arrangements.

Xiao also said Beijing must look out for hot money moving in and out of the country, as well as large amounts of capital flowing into the frothy real estate market.

“We must be especially vigilant about money from overseas moving in and out in large quantities, and hot speculative money, and we must resolutely fight bubbles in real estate and financial assets,” he said.

Chinese policymakers have struggled to manage bubble risks in the property market, the world’s largest, without hurting growth in the sector, which is crucial for the wider economy.


Company: cnbc, Activity: cnbc, Date: 2019-05-25
Keywords: news, cnbc, companies, suffer, bears, moving, large, insurance, money, short, yuan, chinas, regulator, hot, real, banking, heavy, losses, speculative


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China’s ‘nuclear option’ in Trump’s trade war, explained

What to watch in the market in the week aheadTrade could be a big factor for markets in the week ahead, but investors will also be attuned to fresh inflation data and the bond market, which is flashing new worries about…Market Insiderread more


What to watch in the market in the week aheadTrade could be a big factor for markets in the week ahead, but investors will also be attuned to fresh inflation data and the bond market, which is flashing new worries about…Market Insiderread more
China’s ‘nuclear option’ in Trump’s trade war, explained Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-24  Authors: jeff morganteen
Keywords: news, cnbc, companies, nuclear, explained, worries, inflation, fresh, option, week, watch, insiderread, war, flashing, investors, market, trade, trumps, chinas, markets


China's 'nuclear option' in Trump's trade war, explained

What to watch in the market in the week ahead

Trade could be a big factor for markets in the week ahead, but investors will also be attuned to fresh inflation data and the bond market, which is flashing new worries about…

Market Insider

read more


Company: cnbc, Activity: cnbc, Date: 2019-05-24  Authors: jeff morganteen
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China faces possible hit to credit rating if the trade war isn’t resolved

Escalations in its trade dispute with the U.S. not only could dent China’s economy but also impact its credit standing, according to ratings agencies. An accompanying release said the impact of more central bank intervention could impact “the future of [China’s] public debt ratio and China’s rating.” Reductions in credit ratings often translate to higher interest rates for a country’s bonds. The U.S. had a $419.2 billion trade deficit with China in 2018, on $539.5 billion in imports and just $12


Escalations in its trade dispute with the U.S. not only could dent China’s economy but also impact its credit standing, according to ratings agencies. An accompanying release said the impact of more central bank intervention could impact “the future of [China’s] public debt ratio and China’s rating.” Reductions in credit ratings often translate to higher interest rates for a country’s bonds. The U.S. had a $419.2 billion trade deficit with China in 2018, on $539.5 billion in imports and just $12
China faces possible hit to credit rating if the trade war isn’t resolved Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-17  Authors: jeff cox
Keywords: news, cnbc, companies, billion, isnt, chinas, tariff, faces, china, ratings, trade, resolved, chinese, hit, impact, possible, tariffs, credit, rating, war


China faces possible hit to credit rating if the trade war isn't resolved

“The tariff war is negative for China especially at a time when its policy makers are battling problems of rising debt and increasing leverage in its economy,” analysts at ratings agency DBRS said in a note. “The economic impact on China of rising tariffs would be broader than just via its trade with the U.S.”

China’s credit remains strong despite a weakening economy and a high-stakes tariff battle it is engaged in with the U.S. However, should the impasse linger on, the damages could become greater and start having some deeper impacts.

Escalations in its trade dispute with the U.S. not only could dent China’s economy but also impact its credit standing, according to ratings agencies.

An accompanying release said the impact of more central bank intervention could impact “the future of [China’s] public debt ratio and China’s rating.”

Reductions in credit ratings often translate to higher interest rates for a country’s bonds. China’s debt is currently equivalent to $5.3 trillion in U.S. dollars, or about 43% of its GDP.

DBRS, the fourth-largest ratings agency in the world, has China rated “A,” which is its third-highest classification. However, it recently changed the outlook to negative as the tariff issues pile up.

“China remains a middle-income country that generally lacks the historic openness, institutional credibility and transparency of the major global financial centers,” the firm said in an earlier note.

Negotiators on both sides say they remain optimistic a deal can be reached, though markets have been focused on the more immediate impacts of existing tariffs and threats of ones to come.

The U.S. this month hiked its tariffs to 25% from 10% on $200 billion of Chinese goods. China retaliated by raising its tariff rate from 10% to 20%-25% on $60 billion of U.S. imports. The U.S. is seeking a number of concessions, particularly focused on opening Chinese markets and halting the theft of intellectual property and forced technology transfers.

Should the U.S. not get what it is seeking, President Donald Trump has threatened to slap tariffs on another $300 billion in Chinese imports. The U.S. had a $419.2 billion trade deficit with China in 2018, on $539.5 billion in imports and just $120.3 billion in exports. The deficit through the first three months of 2019 was just shy of $80 billion.

Other ratings agencies have noted the danger to further intensifying relations.

“An abrupt breakdown in trade talks, if that were to occur, will inject considerable policy uncertainty, increase risk aversion and lead to an abrupt repricing of risk assets globally,” Moody’s analyst Madhavi Bokil said in a note. “In China, increased US tariffs will have a significant negative effect on exports amid an already slowing economy.”

Fitch said China could offset the additional tariffs with more monetary easing, but noted it expects GDP to fall to 6.1% this year from 6.6% in 2018.

Should the U.S. extend its sanctions, that could knock off another half-point from the growth figure, the agency said.

“But if trade tensions eventually lead to blanket U.S. tariffs on all Chinese goods, the potential rating impact could be greater, as it may tempt the authorities to abandon their restrained approach to policy easing, and adopt credit stimulus measures that exacerbate the country’s already significant financial vulnerabilities,” said Brian Coulton, Fitch’s economist.


Company: cnbc, Activity: cnbc, Date: 2019-05-17  Authors: jeff cox
Keywords: news, cnbc, companies, billion, isnt, chinas, tariff, faces, china, ratings, trade, resolved, chinese, hit, impact, possible, tariffs, credit, rating, war


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China’s currency is sending a warning signal about the trade war

China’s currency has been an important barometer for progress in U.S.-Chinese trade talks, and right now it’s signaling that things aren’t going well. “Obviously, the trade shock we’re now discussing is a full blown trade war, so it’s obviously a very serious scenario. CNBC reported Friday that trade talks between the two countries appear to have stalled, and the next round of talks have not yet been scheduled. “They’ll do in a couple of ways, partly through intervention, partly through draining


China’s currency has been an important barometer for progress in U.S.-Chinese trade talks, and right now it’s signaling that things aren’t going well. “Obviously, the trade shock we’re now discussing is a full blown trade war, so it’s obviously a very serious scenario. CNBC reported Friday that trade talks between the two countries appear to have stalled, and the next round of talks have not yet been scheduled. “They’ll do in a couple of ways, partly through intervention, partly through draining
China’s currency is sending a warning signal about the trade war Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-17  Authors: patti domm
Keywords: news, cnbc, companies, chinas, market, currency, yuan, chinese, china, talks, signal, trade, officials, trump, sending, warning, nordvig, war


China's currency is sending a warning signal about the trade war

China’s currency has been an important barometer for progress in U.S.-Chinese trade talks, and right now it’s signaling that things aren’t going well.

The question is whether that signal is intentional, and whether Chinese officials will step in to prevent the yuan from reaching a key psychological low of 7 to the dollar. That level has become a line in the sand for markets around the world, and if broken, it could trigger a negative reaction in risk markets globally, as investors move to price in a bigger economic impact from a longer, more contentious trade war.

The yuan has been fairly stable this year, as the U.S. and China carried on trade talks. But since President Donald Trump tweeted about new tariffs May 5, the onshore yuan or CNY, has lost 2.7% against the U.S. dollar.

“Obviously, the trade shock we’re now discussing is a full blown trade war, so it’s obviously a very serious scenario. Then we have this negotiations period, where it could be averted and that doesn’t seem to be very good at all,” said Jens Nordvig, CEO of Exante Data. “It’s also unclear whether the Chinese officials want to fight hard to keep the currency stable. That’s a question mark that came in today.”

The onshore currency, or CNH, which trades in Hong Kong and is more impacted by international traders, hit a high of 6.945, while the onshore yuan, more controlled by the central bank, was just above 6.91 Friday. Nordvig said unlike other sessions, there was no sign Friday that the People’s Bank of China tried to stem the decline.

Also unclear was whether it was an intentional action, and Chinese officials were responding to trade tensions and the U.S. action this week blocking telecom firm Huawei from buying U.S. components.

CNBC reported Friday that trade talks between the two countries appear to have stalled, and the next round of talks have not yet been scheduled.

A weaker yuan has been a source of friction between China and the U.S. for years. Trump, in the past, had accused China of intentionally weakening its currency, hurting the U.S. as a result. If China does allow its currency to weaken, its exports would become more attractive, but strategists say Beijing would then worry about capital flight and it would probably not want to risk that.

“The market is testing the central bank’s resolve to defend the 7 lever,” said Marc Chandler, global market strategist at Bannockburn Global Forex. “They’ll do in a couple of ways, partly through intervention, partly through draining liquidity, raising the cost of being short the Chinese currency. They can do this in the domestic money market and in the domestic Hong Kong market.”

Nordvig said the message the yuan is sending is not like the positive comments about the trade talks that U.S. officials like Treasury Secretary Steve Mnuchin or White House top economist Larry Kudlow have made.

“It looks like they’re not even being invited to China. If there’s no talks ahead of Trump and [President Xi Jinping] meeting in Osaka, then the meeting becomes binary and very risky,” said Nordvig. Trump and Xi are expected to meet on the sidelines of the G-20 meeting June 28.

“It would be very different if Mnuchin makes some progress on some chapters here in the next couple of weeks. If that doesn’t happen we come close to the cliff,” said Nordvig, adding the question is whether Chinese officials are going to hold the currency up.”

Strategists say the yuan current weakness is due to a strengthening dollar and trade war concerns, which in turn are prodding Chinese authorities to consider more monetary and fiscal policy moves.

“It’s selling off on expectations of easier monetary policy and apparently no trade talks. China says we haven’t invited the U.S. back,” said Chandler, adding he expects the currency to challenge the 7 level soon.

“I think we’ll test it. We’ll test Chinese resolve. It will become more of a concern that it will be an inflection point if the CNY or CNH get to 7. It will have a ripple effect on the markets. It will be another source of instability. Another rubicon has been crossed,” he said.

Adam Cole, head of G-10 foreign exchange strategy at RBC, said reports that unnamed Chinese officials said the PBOC would not let the currency trade through 7 suggests that such a move won’t happen soon. But he said the yuan could breach those levels in the future.

“Longer term, with the dollar generally going up against everything, I think that constraint becomes nonbinding,” Cole said. He said the dollar’s rise has to do with monetary policy positioning, cyclicality and the fact that the U.S. economy looks stronger than the rest of the world.

China has been reducing its holdings of Treasurys, which some say could be a warning to the U.S. But Cole said he does not believe China, the largest holder of Treasurys, would bail out of the market in a big way.

“That’s an ongoing concern. Like most people,we think the risk of China going through a sudden liquidation and allocation out of Treasurys is unlikely. That would be a case of cutting off your nose to spite your face, given how much China has to lose,” he said.


Company: cnbc, Activity: cnbc, Date: 2019-05-17  Authors: patti domm
Keywords: news, cnbc, companies, chinas, market, currency, yuan, chinese, china, talks, signal, trade, officials, trump, sending, warning, nordvig, war


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Here are all the ways we’re different from Starbucks, says CFO of China’s Luckin Coffee on IPO day

The chief financial officer of China’s Luckin Coffee told CNBC on Friday the tech-based beverage company’s business model is setting itself apart from U.S. coffee giant Starbucks. 1 coffee purveyor in China by the end of the year, hoping to overtake Starbucks, which currently has 3,500 Chinese stores. The 2-year-old Luckin operates 2,370 stores across China and it’s planning on opening 2,500 additional locations this year. In contrast to Starbucks, Schakel said, “We’re using very small stores,”


The chief financial officer of China’s Luckin Coffee told CNBC on Friday the tech-based beverage company’s business model is setting itself apart from U.S. coffee giant Starbucks. 1 coffee purveyor in China by the end of the year, hoping to overtake Starbucks, which currently has 3,500 Chinese stores. The 2-year-old Luckin operates 2,370 stores across China and it’s planning on opening 2,500 additional locations this year. In contrast to Starbucks, Schakel said, “We’re using very small stores,”
Here are all the ways we’re different from Starbucks, says CFO of China’s Luckin Coffee on IPO day Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-17  Authors: jessica bursztynsky
Keywords: news, cnbc, companies, chinas, coffee, luckin, chinese, china, using, different, trade, ipo, trends, day, starbucks, schakel, stores, ways, cfo


Here are all the ways we're different from Starbucks, says CFO of China's Luckin Coffee on IPO day

The chief financial officer of China’s Luckin Coffee told CNBC on Friday the tech-based beverage company’s business model is setting itself apart from U.S. coffee giant Starbucks.

“The founders of our business are used to using technology and disrupting industries,” CFO Reinout Schakel said in a “Squawk Box” interview, just hours ahead of the company’s debut as a publicly traded stock on the Nasdaq.

Schakel said Luckin’s founders “looked at the transaction of coffee and thought, ‘we can do better than this.'” Luckin was started in 2017 by Chinese entrepreneur Jenny Qian Zhiya.

Customers who want to buy Luckin brew, or any other drinks, have to make the purchases through its app, which Schakel said is more efficient and requires less waste. That also allows the company to access customer data and analyze trends in order to drive retention rates.

“What we’re trying to do is bring down the per-cup cost … with that and with that price point, we think we’re going to drive mass-market consumption,” he said. Most of the menu is about 25% cheaper than Starbucks equivalents.

Luckin is looking to become the No. 1 coffee purveyor in China by the end of the year, hoping to overtake Starbucks, which currently has 3,500 Chinese stores. The 2-year-old Luckin operates 2,370 stores across China and it’s planning on opening 2,500 additional locations this year.

In contrast to Starbucks, Schakel said, “We’re using very small stores,” allowing Luckin to cut down on costs while being “very close to our customers.” The technology and small stores make up the “new retail model,” he added. “That has fundamentally changed the cost structure in China.”

Luckin Coffee, valued at nearly $3 billion in its most recent funding round, is set to start trading Friday, after pricing its initial public offering at $17 per share late Thursday. “We have done what most people do in 15 or 20 years,” Schakel said.

Backed by Singapore’s GIC Private Limited sovereign wealth fund and U.S. money manager BlackRock, Luckin has warned about possibly seeing continuing losses in the foreseeable future. Last year, the Chinese chain recorded a net loss to shareholders of $475.4 million and total revenue of $125.27 million, according to its filing. For the first three months of 2019, it posted a net loss of $85.3 million.

The Luckin IPO comes as U.S.-China trade tensions, involving escalating tariffs on each other’s imports, raised concerns in global financial markets.

However, Schakel told CNBC the impact of the trade war has been muted in China so far. “We don’t see an awful lot yet in China. Something we don’t see today. If there’s something happening around those trends, that could affect Starbucks but that’s not something we’re seeing yet.

— Reuters contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-05-17  Authors: jessica bursztynsky
Keywords: news, cnbc, companies, chinas, coffee, luckin, chinese, china, using, different, trade, ipo, trends, day, starbucks, schakel, stores, ways, cfo


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As China’s growth slows, CEO of Burger King’s parent focuses on the long-term opportunities

Restaurant Brands International CEO Jose Cil speaks during a television interview on the floor of the New York Stock Exchange. As China’s economy slows amid tensions with trade partners, Restaurant Brands International CEO Jose Cil said that the company is taking a long-term perspective on growing its brands in the country. The expansion is supposed to make Restaurant Brands one of the largest restaurant companies in the world. Tim Hortons plans to open 1,500 locations across the country in the


Restaurant Brands International CEO Jose Cil speaks during a television interview on the floor of the New York Stock Exchange. As China’s economy slows amid tensions with trade partners, Restaurant Brands International CEO Jose Cil said that the company is taking a long-term perspective on growing its brands in the country. The expansion is supposed to make Restaurant Brands one of the largest restaurant companies in the world. Tim Hortons plans to open 1,500 locations across the country in the
As China’s growth slows, CEO of Burger King’s parent focuses on the long-term opportunities Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-15  Authors: amelia lucas
Keywords: news, cnbc, companies, china, chinas, growth, opportunities, longterm, view, slows, restaurant, plans, kings, parent, ceo, brands, country, open, focuses, trade, stores, cil, burger


As China's growth slows, CEO of Burger King's parent focuses on the long-term opportunities

Restaurant Brands International CEO Jose Cil speaks during a television interview on the floor of the New York Stock Exchange.

As China’s economy slows amid tensions with trade partners, Restaurant Brands International CEO Jose Cil said that the company is taking a long-term perspective on growing its brands in the country.

“Our view is that we want to be there, and we will be there for the long term. It’s an amazing consumption market, growing tremendously,” Cil said in an interview.

At its first investor day Wednesday, the parent company of Burger King, Tim Hortons and Popeyes Louisiana Kitchen said that it plans to surpass 40,000 stores in the next eight to 10 years. The expansion is supposed to make Restaurant Brands one of the largest restaurant companies in the world.

Chinese consumers’ appetite for burgers, coffee and fried chicken make the country an attractive market for the Toronto-based company, particularly as its sales growth in other markets declines. But the Chinese economy is slowing, and escalations in the trade war over the last week between China and the United States could mean a worse slowdown than expected.

Before the latest developments in the trade war, the International Monetary Fund predicted that China’s GDP will grow by 6.3% this year, which would mark its worst performance in 29 years.

“Our view on China — it’s a similar view for other markets as well — is that over time things will fluctuate, the economies will fluctuate, commodity costs, labor costs, even administrations will change from time to time,” Cil said.

Tim Hortons plans to open 1,500 locations across the country in the next decade as growth in its Canadian home market slows. It currently has 4 locations open in China.

Burger King already has a large footprint in the country, with more than 1,000 locations in China. In 2018 alone, it added about 140 new stores there.

Other companies see similar long-term opportunities. Yum China, the Chinese spinoff of Yum Brands, is accelerating its expansion of KFC. The Popeyes competitor opened its first store in the country more than three decades ago and added 191 new units during its first quarter.

Starbucks, which opened its first store in China 20 years ago, plans to open nearly 600 there in the second half of 2019 as part of its plan to remain the largest coffee chain in the country. China’s own Luckin Coffee, slated for a public debut on the New York Stock Exchange soon, has been trying to beat Starbucks with discounts and stores created for convenience.


Company: cnbc, Activity: cnbc, Date: 2019-05-15  Authors: amelia lucas
Keywords: news, cnbc, companies, china, chinas, growth, opportunities, longterm, view, slows, restaurant, plans, kings, parent, ceo, brands, country, open, focuses, trade, stores, cil, burger


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Latest data shows surprise slowing in US, China economies as trade war escalates

“The real message today is that both the economic data from the U.S. and China have disappointed. The latest round of tariffs announced by President Donald Trump and China President Xi Jinping raised the stakes and potential economic hit on both economies. Trump boosted the tariffs on $200 billion in goods to 25% from 10%, while Xi upped the tariffs on $60 billion in goods. Economists had expected a 0.2% gain in the monthly sales data, which is important since it reflects the health of the consu


“The real message today is that both the economic data from the U.S. and China have disappointed. The latest round of tariffs announced by President Donald Trump and China President Xi Jinping raised the stakes and potential economic hit on both economies. Trump boosted the tariffs on $200 billion in goods to 25% from 10%, while Xi upped the tariffs on $60 billion in goods. Economists had expected a 0.2% gain in the monthly sales data, which is important since it reflects the health of the consu
Latest data shows surprise slowing in US, China economies as trade war escalates Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-15  Authors: patti domm
Keywords: news, cnbc, companies, tariffs, manufacturing, surprise, escalates, war, production, hit, china, chinas, economies, data, sales, gain, trade, goods, latest, shows, slowing


Latest data shows surprise slowing in US, China economies as trade war escalates

A worker cuts a steel coil at the Novolipetsk Steel PAO steel mill in Farrell, Pennsylvania, March 9, 2018. Aaron Josefczyk | Reuters

Consumer and industrial activity in both the U.S. and China slowed in April, even before the world’s two biggest economies entered the latest phase of an escalating trade war that could take a bite out of global growth. “The real message today is that both the economic data from the U.S. and China have disappointed. They’re like two boys in the sandbox that are spitting on each other, and it could get a lot worse,” said Marc Chandler, global market strategist at Bannockburn Global Forex. The latest round of tariffs announced by President Donald Trump and China President Xi Jinping raised the stakes and potential economic hit on both economies. Trump boosted the tariffs on $200 billion in goods to 25% from 10%, while Xi upped the tariffs on $60 billion in goods.

Economists see about a 0.4 to 0.5% hit on China’s GDP and about a 0.1% hit to the U.S. from the higher tariffs. Strategas Research estimates the higher tariffs would cut into U.S. growth by 0.1% for every two months the raised tariffs are in place, or 0.5% a year. Trump also threatened 25% tariffs on another $325 billion in Chinese goods, which economists say could hit Chinese sales and send prices higher for U.S. consumers. The impact of those tariffs would be even greater on GDP. China’s retail sales rose 7.2% in April, the slowest pace in 16 years and less than March’s 8.7% and forecasts of 8.6%. China’s April industrial production rose 5.4%, less than the 6.5% expected or the 8.5% gain in March. “This is the first bit of cleaner data we’re getting, and it paints a much less rosy picture of the economy than a lot of people thought was happening,” said Gareth Leather of Capital Economics. Leather said seasonal factors could have masked weakness in March data, which showed some improvement and had appeared to be signs of green shoots and recovery. “This really quashes those hopes for the time being.” U.S. retail sales slid 0.2% in April, down from the surprise jump of 1.7% gain in March. Car sales fell 1.1% last month, while sales at electronics and appliance stores lost 1.3%. Economists had expected a 0.2% gain in the monthly sales data, which is important since it reflects the health of the consumer, about 70% of the U.S. economy. U.S. industrial production, reflecting total production at factories, utilities and mines, fell 0.5% after a 0.2% gain in March. Manufacturing output dropped 0.5%, led by a 2.6% decline in motor vehicles and parts, the third decrease in four months and the latest manufacturing report to show softness.

Tariff impact

“Autos had a weird swing, as a result of excess inventories,” said Michelle Meyer, chief U.S. economist at Bank of America Merrill Lynch. “I’ll be paying pretty close attention to manufacturing data, the survey datas, the confidence measures. It’s going to be very important to watch how the economy is going to fare around the escalation. Manufacturing has weakened already.” She said that manufacturing has been falling off since peaking last summer. She said the trade wars have had an impact on the manufacturing sector, with about 59% of companies in the ISM semi-annual survey saying that the tariffs have led to an increase in the price of goods produced. Meyer described the weaker April retail sales data as “noise,” but said it bears watching if the tariffs go into place on the $325 billion in goods since they would directly affect many consumer products. Manufacturers have been reporting impacts from tariffs, with 59% saying production costs went up as a result. Markets responded to the news from both countries by ramping up expectations for central bank and other policy easing. U.S. fed funds futures signaled expectations for more than one quarter-point rate cut this year, while China’s stock markets rallied on expectations of more fiscal and monetary stimulus. “Both economies softened before the tariff truce ended, but what’s interesting is still we’re not talking about recessionary levels. If China grows less than 6%, that’s a big deal,” said Chandler. He said U.S. growth currently looks to be averaging 2.4% in the first half.


Company: cnbc, Activity: cnbc, Date: 2019-05-15  Authors: patti domm
Keywords: news, cnbc, companies, tariffs, manufacturing, surprise, escalates, war, production, hit, china, chinas, economies, data, sales, gain, trade, goods, latest, shows, slowing


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We asked the Democrats running for president how they would negotiate with China on trade. Here’s what they said

China has not been forthright in even admitting that intellectual property theft and technology transfer occurs. On the intellectual property theft, we know that much of the IP theft is state-backed. We should address cybersecurity and intellectual property theft issues directly with China and use the WTO to negotiate trade disputes and establish clear enforcement mechanisms. As we press China on trade and intellectual property theft, we need to demonstrate our resolve in ways that actually help


China has not been forthright in even admitting that intellectual property theft and technology transfer occurs. On the intellectual property theft, we know that much of the IP theft is state-backed. We should address cybersecurity and intellectual property theft issues directly with China and use the WTO to negotiate trade disputes and establish clear enforcement mechanisms. As we press China on trade and intellectual property theft, we need to demonstrate our resolve in ways that actually help
We asked the Democrats running for president how they would negotiate with China on trade. Here’s what they said Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-14  Authors: tucker higgins
Keywords: news, cnbc, companies, practices, property, running, negotiate, democrats, wto, trade, american, president, asked, theft, rights, heres, intellectual, china, chinas


We asked the Democrats running for president how they would negotiate with China on trade. Here's what they said

China’s President Xi Jinping and U.S. President Donald Trump attend a welcome ceremony at the Great Hall of the People in Beijing on November 9, 2017. Nicolas Asfouri | AFP | Getty Images

With trade negotiations between the U.S. and China stalled and an escalating trade war threatening global markets, President Donald Trump has said that the Chinese are “DREAMING” that he will be defeated by a Democrat in 2020. But Democrats have not said much about their own plans for negotiating with the Chinese. To learn more, CNBC asked the 21 top Democrats running for president about their views. We asked them what they believe is working under Trump — and what they would change. We also asked whether human rights issues in China, where the U.S. has said more than a million Muslims are held in concentration camps, should be part of any trade deal. Lastly, we asked about what they would do about China’s efforts to tighten its military grip on the South China Sea, where more than $3 trillion of trade passes annually. Below, unedited, are our questions and the answers we received from the seven Democrats who responded. Those Democrats are Sen. Bernie Sanders, I-Vt., Rep. Eric Swalwell, D-Calif., Rep. Tim Ryan, D-Ohio, former Maryland Rep. John Delaney, Rep. Seth Moulton, D-Mass., Miramar, Florida, Mayor Wayne Messam and spiritual coach Marianne Williamson. Two other Democrats provided partial responses. A spokesperson for Sen. Michael Bennet, D-Colo., provided an excerpt from the senator’s platform that is included as a response to the first question. An aide to Texas Rep. Beto O’Rourke wrote in a statement: “Holding China accountable should not come at the expense of American workers. That is why we must not settle for any deal that does not respect intellectual property, level the playing field in the Chinese market, nor end unfair trade practices. We must advance progress based on shared interests and core democratic values.” Joe Biden, the Democratic front runner, did not respond to CNBC’s survey as of publication time but has dismissed China’s economic competitiveness while on the campaign trail, earning some criticism from his fellow contenders. “China is going to eat our lunch? Come on, man,” Biden told a crowd in Iowa earlier this month. He described himself as a “fair trader” and said he has been “arguing for a long time that we should treat other countries the way in which they treat us, which is, particularly as it relates to China: If they want to trade here, they’re going to be under the same rules.” CNBC provided the questions to each campaign on May 6. What do you think is the best approach to addressing China’s practices with regard to intellectual property theft, technology transfer, industrial subsidies and other matters in which the two countries are at odds. Is it through multinational organizations like the World Trade Organization and the United Nations? Will you take any action unilaterally? If so, what action? Sanders: It is in the interests of the United States to work to strengthen institutions like the WTO and the UN rather than trying to go it alone. American concerns about China’s technology practices are shared in Europe and across the Asia-Pacific. We can place far more pressure on China to change its policies if we work together with the broader international community and the other developed economies. International institutions also offer China a template for reforming its own internal intellectual property and industrial practices. Swalwell: I’m a member of the House Permanent Select Committee on Intelligence, as well as of the Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, so I’ve seen first-hand the economic espionage that China commits and the adverse impact it has on American businesses. China has not been forthright in even admitting that intellectual property theft and technology transfer occurs. Nor is China transparent on its industrial subsidies. Curbing China’s dishonest practices must be a part of any negotiation; as president, I would hold China accountable. On the intellectual property theft, we know that much of the IP theft is state-backed. In order to combat this we must take a multi-pronged approach — both defensive and offensive. We must have a strong enforcement mechanism with which to hold China accountable for their actions and continue to impose penalties when theft occurs. China has made promises to institute reforms of their policies governing IP rights, technology transfers and cyber-theft of trade secrets in the past but we know these are not being imposed. Read more: Eric Swalwell of California joins 2020 presidential race The legal and diplomatic approaches have not been completely effective, it is critical that we implement other actions such as developing early warning systems, particularly when it comes to the stealing of defense technology. This can be done through private-public partnerships. We must also be ready to take counter action when a theft is detected. It is vital that we continue to have a multinational approach to addressing these issues. We can’t go it alone; we must involve allies — and other victims of China’s practices — such as Japan, South Korea, Australia and New Zealand.

While the U.S. does not have to go through the World Trade Organization and can invoke Section 301 if they are to impose tariffs against China (even though it still has to file a simultaneous complaint with the WTO), the WTO can still be a useful partner. In fact, the WTO has an obligation to enforce the rules they have set up, otherwise it is left to the United States to impose punishment. We should hold the WTO to its obligation. It is also important that U.S. companies acknowledge when theft is occurring by China. In the past, companies have not wanted to impinge on their business with China so they’ve turned a blind eye. I would ensure that reporting this theft it is a win-win for American companies through fair trade practices. Lastly, government departments must coordinate with each other and with U.S. companies. The departments of Commerce and the Treasury, the U.S. Trade Representative and the U.S. State Department must all be aligned to tackle the problem of IP property theft in coordination with the private sector. I would continue to make sure the Justice Department brings criminal cases against the companies that violate trade agreements and steal our trade secrets and intellectual property. I would boost our Trade Representative’s investigation of China’s activities by adding more staff and funding. Ryan: When it comes to China stealing intellectual property from the United States, there is no doubt that multinational organizations need to play a part in holding them accountable. These actions are a serious national security and economic risk for the United States. At the same time, I think our government must take further action when it comes to creating safeguards against China’s actions. That is why I have cosponsored legislation the Fair Trade with China Enforcement Act, which would hold China accountable and create necessary regulations when it comes to trade with China, including prohibiting the sale of national security sensitive technology and intellectual property to China. Read more: Ohio Rep. Tim Ryan — who once tried to take down Nancy Pelosi — is running for president Delaney: China has acted like pirates, stealing intellectual property, building illegal islands, and not playing by the rules. I will build a broad coalition of U.S. allies and have a unified front against China (this will involve working with multinational organizations but also doing a lot more), I will unify our business community against these practices by preventing them from depositing intellectual property funded by taxpayers into joint ventures with China, and I will re-enter the TPP to compete with China. We can hold China accountable and have a productive relationship with them. Read more: What being a successful businessman taught Rep. John Delaney about politics Moulton: These options aren’t mutually exclusive. We should address cybersecurity and intellectual property theft issues directly with China and use the WTO to negotiate trade disputes and establish clear enforcement mechanisms. Protecting our international property is a national security issue, and we need to build a cyberwall to protect against Chinese and Russian attacks. We should start by strengthening the Cyber Threat Intelligence Integration Center created under President Obama and improve the information-sharing between the private sector and government on cyber threats. As we press China on trade and intellectual property theft, we need to demonstrate our resolve in ways that actually help American workers. Donald Trump has shown he knows nothing about trade. An initial analysis of the net effect of the tariffs is that they are costing the United States economy $1.4 billion a month, and the cost of the tariffs is being passed on to U.S. farmers, companies, and consumers. Read more: Seth Moulton is the latest Democrat running for president. Here are his biggest policy priorities, from green jobs to a public option The United States led the 15 years of negotiations that enabled China to join the WTO and we should reap the benefits of that successful diplomatic effort. Our negotiators secured unprecedented changes to China’s economic and trade policies as conditions for membership, including requiring a dramatic opening of China’s telecom, banking, and insurance sectors, along with the lowering of tariffs on key agricultural products to almost zero. The point is: WTO leverage works. China’s membership in the WTO has been a huge boon to the United States, with U.S. exports to China increasing by 500 percent and agricultural exports increasing by 1000 percent since China joined the organization. Going forward, the WTO should absolutely be involved in establishing trust in trade negotiations and in providing the mechanisms for the enforcement of trade agreements. Bennet: Instead of slapping tariffs on our allies and perpetrating a trade war, Michael believes we need to do the hard work of building coalitions to counter Chinese predatory economic practices, like intellectual property theft and economic espionage, that harm American workers, businesses, farmers, and ranchers. In order to compete with and counter an increasingly authoritarian China, Michael believes we must reinvest in our alliances, champion democratic values like the rule of law and human rights, and sharpen our efforts to combat technology threats that undermine U.S. economic and national security.

Messam: The strained trade relations between the U.S. and China is a complex issue that should be confronted with a measured and sober disposition. The combined approach of multinational organizations and unilateral action should be leveraged to protect intellectual property, technology assets, and trade secrets. Before engaging trade wars that could have detrimental impacts to American businesses and our economy, we must seek to solve our trade differences diplomatically. Where multinational organization negotiations don’t work, I would seek specific and direct trade remedies not limited to: • tariffs • blockade on imports of stolen intellectual property Read more: Little-known Florida mayor becomes the latest Democrat vying to take on Trump in 2020 Williamson: The United States Intellectual Property is some of the most valued in the world. According to the USTR, by stealing our intellectual property, China costs American businesses between $225 billion and $600 billion annually. We must use all tools at our disposal to ensure China respects intellectual property law. This will include working with and leveraging the power of the international community to make certain that China engages in fair trade. The U.S. government must also enlist the help and cooperation from American businesses to help solve this problem. Increased internal controls, more robust screening and standardized best practices will make it more difficult for Chinese agents to operate. Many opportunities are a matter of simple theft. More diligence will help curb crimes of opportunity. Lastly, a firm no nonsense stance against China on every front will be necessary to send a clear message that these practices won’t be tolerated. Should a trade deal with China address human rights issues? If not, will your administration address human rights in China and, if so, how? Sanders: Yes. Labor protections are very weak in China, and the rights of workers are an essential component of human rights. The Trump administration has proven itself indifferent to labor rights, and apparently would prefer that American workers are reduced to the position of Chinese workers, rather than that labor everywhere enjoy basic protections and strong standard of living. The Trump administration has also done nothing to pressure China over its abhorrent treatment of the Uighur and Tibetan peoples. Future trade negotiations should, for example, target American corporations that contribute surveillance technologies that enable China’s authoritarian practices. Swalwell: Yes, a trade deal must have a component to address human rights activity. We must be a model for the world and call out countries such as China that violate human rights. Ryan: Yes. As the United States negotiates any future trade deal with China, we must address the human rights violations. The actions we have seen from the Chinese government when it comes to the inhumane treatment of the ethnic minorities is inexcusable. And no future trade agreement can ignore these violations. Delaney: Human rights are a priority to the Delaney Administration.


Company: cnbc, Activity: cnbc, Date: 2019-05-14  Authors: tucker higgins
Keywords: news, cnbc, companies, practices, property, running, negotiate, democrats, wto, trade, american, president, asked, theft, rights, heres, intellectual, china, chinas


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China’s ‘self-destructive nuclear option’ in trade war: Selling US Treasury bonds

Consider it China’s nuclear option in the trade war with the U.S. — the ability to start dumping its massive pile of Treasury bonds that could trigger a surge in interest rates and substantially damage the American economy. “It’s a self-destructive nuclear option,” said Robert Tipp, chief investment strategist and head of global bonds for PGIM Fixed Income. Following its myriad disputes with the Trump administration, Russia has largely exited the Treasury market. “They need to do more to counter


Consider it China’s nuclear option in the trade war with the U.S. — the ability to start dumping its massive pile of Treasury bonds that could trigger a surge in interest rates and substantially damage the American economy. “It’s a self-destructive nuclear option,” said Robert Tipp, chief investment strategist and head of global bonds for PGIM Fixed Income. Following its myriad disputes with the Trump administration, Russia has largely exited the Treasury market. “They need to do more to counter
China’s ‘self-destructive nuclear option’ in trade war: Selling US Treasury bonds Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-13  Authors: jeff cox
Keywords: news, cnbc, companies, treasurys, china, trillion, chinese, selfdestructive, bonds, treasury, selling, united, market, states, nuclear, option, trade, chinas, war, biggest


China's 'self-destructive nuclear option' in trade war: Selling US Treasury bonds

Consider it China’s nuclear option in the trade war with the U.S. — the ability to start dumping its massive pile of Treasury bonds that could trigger a surge in interest rates and substantially damage the American economy. As the two sides engage in a tit-for-tat tariff exchange, the possibility that China might raise the stakes and stop being the world’s biggest consumer of U.S. debt again reared its imposing head Monday. China currently owns $1.13 trillion in Treasurys, a fraction of the total $22 trillion in U.S. debt outstanding but 17.7% of the various securities held by foreign governments, according to data from the Treasury and the Securities Industry and Financial Markets Association. Should the Chinese decide to walk away or reduce their role in the market, that, at least in theory, could create a substantial dislocation for a country such as the U.S. that relies so much on sovereign entities to buy its paper.

At least for the moment, markets aren’t that worried that China could take such a seemingly drastic step, in large part because the move might not have much upside except to create headlines. “It’s a self-destructive nuclear option,” said Robert Tipp, chief investment strategist and head of global bonds for PGIM Fixed Income. “Maybe it helps them as a bargaining chip, but it’s endangering the value of something they’re deeply involved in.” In fact, the move actually could help the U.S. For one, a Chinese reduction of Treasurys could weaken the dollar and make U.S. multinationals more competitive. For another, Treasury yields would rise and thus cause prices to fall, lowering the value of China’s portfolio. And there’s the question of where China would put its money — all that cash would have to go somewhere, and U.S. bonds are among the highest-yielding in the world when weighed against their relatively low risk. “It still seems like Treasurys are the optimal place for security, flight to quality, capital appreciation etc. Moving around that sum of money seems very challenging now,” said Nick Maroutsos, co-head of global bonds for Janus Henderson. “It’s possible and could happen very gradually over a six- to 12-month period. But calling it and having it happen so quickly is very unlikely.”

‘The biggest weapon they have’

In fact, China already has been pulling back its role in the U.S. bond market. Its holdings have fallen nearly 4% over the past 12 months even as total foreign government ownership of Treasurys has increased by 2.6%. Following its myriad disputes with the Trump administration, Russia has largely exited the Treasury market. Japan, the No. 2 holder of U.S. debt, has increased its holdings slightly over the past 12 months to $1.07 trillion, while Brazil has stepped into the No. 3 position with about $308 billion, thanks to a 12.9% boost during the period. With the U.S. expected to be staring down $1 trillion annual budget deficits in the years to come, a less active Chinese government does generate some fears. “To me, that is the biggest worry. This is really the biggest weapon they have,” said Sung Won Sohn, professor of economics at Loyola Marymount University and president of SS Economics. “They need to do more to counter the United States. So if push comes to shove, that’s what they are going to resort to.”

Because the U.S. imports far more from China than the other way around, China needs additional leverage to fight the tariff battle. While Sohn said shrinking its bond holdings would be a last resort, he sees it as possible if the U.S. decides to enact tariffs on all Chinese imports, which totaled $539.5 billion in 2018. “I have become less and less optimistic and more pessimistic, because this is a trade war but it’s not as much about economics as it is other things,” he said. “In the United States, we view China as an economic predator. China views the United States as a model of Western power trying to humiliate China as in the 18th century. There’s a long, kind of simmering underneath of nationalistic feelings.”

Yields fall amid panic


Company: cnbc, Activity: cnbc, Date: 2019-05-13  Authors: jeff cox
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China’s Liu is still set to join trade talks this week as US says tariffs will rise on Friday

President Donald Trump speaks while meeting with China’s Vice Premier Liu He in the Oval Office of the White House in Washington, U.S., April 4, 2019. The tariff increase will go into effect at 12:01 a.m. on Friday, U.S. Trade Representative Robert Lighthizer told reporters on Monday. But the U.S. would reconsider the duties if talks get back on track, Treasury Secretary Steven Mnuchin also said. The comments from top U.S. trade officials follow a choppy day in both Asian and U.S. stock markets


President Donald Trump speaks while meeting with China’s Vice Premier Liu He in the Oval Office of the White House in Washington, U.S., April 4, 2019. The tariff increase will go into effect at 12:01 a.m. on Friday, U.S. Trade Representative Robert Lighthizer told reporters on Monday. But the U.S. would reconsider the duties if talks get back on track, Treasury Secretary Steven Mnuchin also said. The comments from top U.S. trade officials follow a choppy day in both Asian and U.S. stock markets
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Company: cnbc, Activity: cnbc, Date: 2019-05-06  Authors: jacob pramuk kayla tausche, jacob pramuk, kayla tausche
Keywords: news, cnbc, companies, mnuchin, lighthizer, week, rise, join, tariff, set, trump, president, talks, liu, chinas, officials, tariffs, trade, chinese


China's Liu is still set to join trade talks this week as US says tariffs will rise on Friday

President Donald Trump speaks while meeting with China’s Vice Premier Liu He in the Oval Office of the White House in Washington, U.S., April 4, 2019.

Chinese Vice Premier Liu He is expected to join a delegation in the United States this week, a potentially positive sign for a trade agreement between the U.S. and China even as the Trump administration says it will hike tariffs on Chinese goods.

The tariff increase will go into effect at 12:01 a.m. on Friday, U.S. Trade Representative Robert Lighthizer told reporters on Monday. But the U.S. would reconsider the duties if talks get back on track, Treasury Secretary Steven Mnuchin also said.

Liu’s presence could be telling: market watchers considered it more likely that the U.S. would hike tariffs on $200 billion in Chinese goods to 25% from 10% if he did not attend the talks. Still, some new roadblocks have emerged ahead of the next round of negotiations.

U.S. officials on Monday accused China of reneging on commitments made as part of the negotiations. Lighthizer described an “erosion of commitments” on the part of the Chinese.

The Chinese team is set to come to Washington on Thursday and Friday, according to Lighthizer. Talks continue, and the two sides are not cutting off discussions after President Donald Trump threatened to increase tariffs already placed on Chinese products and add new duties, the trade official said.

U.S. stocks did not move drastically in extended-hours trading following the remarks from Lighthizer and Mnuchin. The SPDR S&P 500 ETF Trust, which tracks the S&P 500 index, was down about 0.5% in extended trade.

The comments from top U.S. trade officials follow a choppy day in both Asian and U.S. stock markets sparked by Trump’s tweeted tariff threat. Stocks initially fell Monday after Trump first announced the tariff increase in a tweet Sunday.

While U.S. equities initially plunged Monday, they recovered throughout the day as investors surmised that the president may not have upended the talks. CNBC previously reported that a Chinese team would still come to the U.S. this week for talks, although it may be smaller than originally planned.

U.S. officials said they saw a shift in tone in the talks over the weekend. Mnuchin said China wanted to go back on clear commitments that had the potential to change the deal significantly.

Lighthizer and Mnuchin did not comment on the separate tariffs on $325 billion in Chinese products that Trump threatened in a tweet Sunday.

— CNBC’s Stephanie Dhue contributed to this report

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Company: cnbc, Activity: cnbc, Date: 2019-05-06  Authors: jacob pramuk kayla tausche, jacob pramuk, kayla tausche
Keywords: news, cnbc, companies, mnuchin, lighthizer, week, rise, join, tariff, set, trump, president, talks, liu, chinas, officials, tariffs, trade, chinese


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