U.S.-China Trade Talks End With Key Differences Still Unresolved
Two days of U.S.-China trade discussions ended in Beijing with an agreement to keep on talking, and little else. China’s official Xinhua News Agency reported Friday afternoon that both sides reached a consensus on some trade issues while acknowledging major disagreements on some matters. It said they would continue discussions, without providing specifics for when they would start again. Neither side briefed the media, and the U.S. delegation led by Treasury Secretary Steven Mnuchin departed Beijing in the evening. While a cure-all deal was always a long shot, the discord between the world’s two biggest economies means skittish global markets will continue to face ongoing trade tensions. The immediate question — which may not be answered until President Donald Trump takes to Twitter — is whether the U.S. got enough wins to delay planned tariffs of up to $150 billion on Chinese imports. “A disagreement over trade practices that has built up over more than two decades will take much more than two days to resolve,” said Shane Oliver, the head of investment strategy at AMP Capital Investors Ltd. in Sydney. “A negotiated solution remains most likely but it will take time with a lot of posturing and near-death moments along the way.” Heading into the talks, both sides outlined a series of tough demands, with the U.S. focused on reducing a deficit in goods it says reached a record $375 billion last year. The U.S. delegation asked China to reduce support for high-tech industries, allow U.S. companies non-discriminatory access in China and cut the trade deficit by at least $200 billion by the end of 2020 from 2018, according to a document seen by Bloomberg. It also called on China to avoid any retaliation, drop World Trade Organization cases and agree to quarterly reviews of its progress in meeting targets.
Euro Area’s Easter Inflation Blip Gives ECB Cause to Stay Wary
A slowdown in euro-area inflation — an Easter-related statistical blip that in normal years would be ignored — could give the European Central Bank another reason to put off any decision on ending its bond-buying program. Consumer-price growth unexpectedly weakened to 1.2 percent last month and the core rate, excluding volatile items such as food, was the lowest in more than a year at just 0.7 percent. Both measures were below most economists’ estimates. The ECB and the European Commission each predict an upturn later this year, yet the concern is that the continued drip of feeble data combined with risks such as trade protectionism damage confidence so much that companies and households put off spending. “The ECB will want to look at the next couple of months to assess to what extent this sharp drop in core inflation is temporary,” said Aline Schuiling, an economist at ABN Amro. “If we stay at these low levels, they might consider extending the purchases or having a longer taper.” ECB chief economist Peter Praet, in the text of a speech delivered in Paris two hours after the inflation report, reiterated the central bank’s intention to wait while it judges whether the slowdown is short-term or not. “The latest economic data and survey results have generally surprised to the downside, suggesting some loss of momentum in economic activity,” he said. “Temporary factors may also be at work. We will also need to monitor whether, and if so, to what extent, these developments reflect a more durable softening in demand.”
China stocks end lower as investors eye Sino-U.S. trade talks
China stocks ended lower on Friday, capping a listless week, as investors anxiously await the outcome of the Sino-U.S. trade talks being held in Beijing. The blue-chip CSI300 index ended down 0.5 percent at 3,774.60, while the Shanghai Composite Index closed 0.3 percent lower at 3,091.03 points. For the week, the CSI300 index ended 0.5 percent higher, while the Shanghai Composite Index closed up 0.3 percent. The blue-chip CSI300 index was down, with its financial sector sub-index closed 0.81 percent lower, the consumer staples sector ended down 0.73 percent, the real estate index ended down 0.25 percent and healthcare sub-index closed 1.09 percent higher. The smaller Shenzhen index ended down 0.21 percent and the start-up board ChiNext Composite index was weaker by 0.65 percent. Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.54 percent, while Japan’s Nikkei index closed down 0.16 percent. At 0722 GMT, the yuan was quoted at 6.3527 per U.S. dollar, 0.04 percent weaker than previous close of 6.35. The largest percentage gainers in the main Shanghai Composite index were Wintime Energy Co Ltd, which closed up 10.23 percent, followed by Shanghai Laimu Electronics Co Ltd , which ended 10.02 percent higher and Jiangyin Jianghua Microelectronics Materials Co Ltd that closed higher by 10.01 percent. The largest percentage losses in the Shanghai index were Aurora Optoelectronics Co Ltd, which ended down 10 percent, followed by China National Software & Service Co Ltd , which closed 9.9 percent lower and Whirlpool China Co Ltd that closed down by 7.97 percent. So far this year, the Shanghai stock index is down 6.5 percent, the CSI300 has fallen 6.4 percent while China’s H-share index listed in Hong Kong is up 1.8 percent. Shanghai stocks have risen 0.29 percent this month.