What might a China-US trade deal bring?

The US government announced in late February a delay to the March 1 deadline to increase tariffs on Chinese products following trade negotiations between the two countries. And hopes are running high for a trade agreement to be reached sometime later when leaders of the two countries meet.

What could a deal look like? The details of any China-US trade deal will likely only be finalized and released at or after the next meeting between Chinese and US leaders. Our best guess is that a broad agreement could be finalized. In the case of a broad deal, US restrictions on the Chinese tech industry may be less severe than otherwise might have been.

What can be claimed or observed in the near term? For China, the US will not increase tariffs on imports from China on March 2, and it will agree to continue negotiations and may even agree to gradually roll off some existing ones. In addition, the US may move to lessen export restrictions against Chinese tech companies in the near term. For the US, China will immediately import more US products (actually imports of soybeans have started), act to enhance intellectual property (IP) protection through amendment of Chinese patent law and better enforcement mechanism, roll off of higher tariffs on imports from the US, for example automobiles; and China may expedite the approval of US companies entering into the China market, including in financial services, agriculture and the automobile sectors.

Also, the US will likely demand regular monitoring and verification on areas including China’s commitment on better IP protection and domestic market opening beyond granting of licenses and approvals. Cyber security and international cooperation issues will be ongoing work for both sides. In addition, China will need to observe how the US may tighten and put new restrictions on Chinese investments, Chinese companies, market access, and access to technologies going forward.

What is unlikely to change? No matter how far-reaching (or not) a potential trade deal might be, we do not see China-US trade relations (or general relations for that matter) returning to the conditions before the trade war. Most of all, the US will likely further restrict Chinese investment in the US, China’s access to technology and high-tech products in the coming years.

Also, we expect the US to use the possibilities of higher tariffs, financial sanctions or cutting China’s access to technology as important tools to enforce any trade agreement. As a result, export-oriented businesses operating in China and companies in the China-global supply chains will still face heightened uncertainties. While China is willing to negotiate on many fronts, it is highly unlikely to give up its ambition to move up the value chain and innovate advanced technology. While China may deepen reforms of State-owned enterprise (SOE) reforms, these reforms are likely to be designed to make SOEs more efficient and stronger, not to disappear or privatized.

As for macroeconomic and policy implications, it is forecast that both China’s export and GDP growth will be stronger than our baseline forecasts in the case of a broad US-China trade agreement, rather than a mere extension of the negotiation deadline. However, uncertainty related to potential future tariff increases and/or access restrictions by the US will likely linger and dampen capital expenditure in China. Moreover, policy stimulus may also be held back somewhat as economic activity and confidence rebound.

Also, a trade deal will of course help lift sentiment in the export-related sectors and be positive for the more export-oriented economies in East Asia. A softer export deceleration in China would also help reduce pressure on the job market and on consumer confidence. Specifically, a trade deal will mean consumer electronics and other tech products currently not on the tariff lists will stay off the list. Moreover, to the extent the US will impose less severe restrictions against Chinese tech firms, it will also be positive for the tech supply chain.

Furthermore, a positive resolution on trade talks, while to some extent being anticipated by investors, adds to the better climate for equities alongside a more dovish Fed and better economic data.

While at the market level equities have clearly bounced off their lows partly in anticipation of a trade deal, our baskets of trade related stocks continue to price in a more difficult environment. A positive scenario coming out the trade talks adds to our conviction in our preference for Northeast Asia, especially China, Korean and Japan, over South Asian equities.

US opens new front in trade war, complicates ties with India

US President Donald Trump notified Congress on March 4 after months of speculation that he would terminate the Generalized System of Preferences (GSP) for India and Turkey, starting a 60-day countdown period, after which the US President has the right to take action against the two countries on his own authority.

This was after the US had in April last year started a review process of this preferential program as some US companies had complained of non-tariff barriers being imposed on their exports to India. India, according to the US, had failed to provide any assurance of unhindered market access to its products in the Indian market which was perceived by the Trump administration as creating a negative impact on equitable and reasonable market access.

The discussions between the US and India were quite extensive and there was hope that things would be worked out in such a way that India would be able to continue to be part of the GSP, and the complaints in the area of dairy and medical devices would be looked into by India.

Under this program, India in 2017 exported duty-free goods worth $5.7 billion, including auto components, industrial valves and textile materials to the US. India exported a total of $48 billion worth of goods to the US in 2018 with a trade surplus of $21 billion. India was also placed on a watch list of the treasury department for currency manipulation.

India had behaved with great restraint to not retaliate when the US unilaterally increased duty on a range of Indian products. Commerce Secretary Anup Wadhawan said that the withdrawal of GSP will have a minimal effect on India’s exports and India would keep working at addressing the issues the US had.

The US has indeed opened a new front in the trade war by taking this decision against India and Turkey, even when the big issue of working out a trade deal with China is still ongoing.

For India, which is going into a general election that will be held in seven phases from April 11 to May 19, the announcement was bad news as the opposition will surely make use of this as one of the failures of the Modi government, even though the government spokesperson has pointed toward only an impact of $190 million per year. Already there is a lot of pressure in India because economic growth has not created the jobs that are so critical for inclusive development, nor have exports grown as planned.

Exports do create a lot of jobs directly and indirectly. There is indeed a more pronounced political affect as there are growing voices in India calling for a tougher stand on trade negotiations with other countries, including the US.

In the US, Trump has made trade negotiations a rallying point and before the next elections, we are certainly going to see a new round of tensions with key trading nations and the US.

There is a lot of chatter about the US considering revoking India’s Most Favored Nation status.

Here again most Indians feel that this is more positioning intended to put pressure on India to give more access to US companies. India has its own domestic concerns which make it not possible to give into the pressures of the US administration.

This first salvo from the US side of giving notice of its intent to terminate India from its GSP will put a lot of pressure on the Indian side, and it will need to take the bilateral talks on the liberalization of its economy with the US much more seriously.

As the general elections are just round the corner in India, where there will be 900 million voters taking part in this election to select 543 seats in the lower house, one can’t expect much will happen in the next 60 days as things will only start to move after the election results are out on May 23.

The relationship between India and the US is very important, and both sides realize the importance of having a fair and equitable trade mechanism in place.

Politically, it is quite likely that we will see both countries working together more closely in many areas. Being large countries with strong democratic political systems, there is a lot of common ground to build a future relationship on.

But certainly, they have to treat each other with respect, and the US has to understand the political and economic compulsions of any government in New Delhi and give them the right environment to open up further and at the same time be able to achieve higher growth rates. This should be a win-win for both countries.

After 2017, the US, Japan, India and Australia have become closer with the Quadrilateral Security Dialogue being revived. All eyes will now be on the economic relationships and how these two important partners of the QUAD group sit across the table to work out their trade differences. Looking at the bigger picture, we can be quite optimistic of a good outcome.

Air crash highlights Africa’s industrialization plight

The crash of the Ethiopian Airlines plane that killed 157 on Sunday has triggered some pessimistic comments toward Ethiopian Airlines and Africa’s aviation industry. Some even said that they would never risk their life to go to Africa. To a certain extent, this underlines the public’s lack of understanding about Africa.

In fact, Ethiopian Airlines is one of the best airlines in Africa, with a very good safety record and the newest aircraft fleet on the African continent. Many visitors to Africa have used the airline. Yet, the performance of Ethiopian Airlines cannot hide the weak position of developing countries in dealing with the aviation industry of developed countries.

While the cause of the crash remains unknown, people are looking to Boeing for an explanation. According to Ethiopian Airlines, the possibility of pilot error is extremely low as the captain of the ill-fated flight had logged over 8,000 hours of flight time, and the first officer had accumulated more than 200 hours. Both were experienced pilots. The plane involved in the crash is a Boeing 737 Max 8 aircraft, which has only been in commercial use since 2017. Nevertheless, this is the second crash involving the model. Just five months ago, a Boeing 737 Max 8, operated by Lion Air, crashed in Indonesia, killing 189. No matter whether or not the two fatal disasters had direct casual links according to the final investigation results, Boeing cannot completely shirk its responsibility.

In essence, high-tech companies from developed countries hold absolute control over technology in the international aviation market, while developing countries have no bargaining power due to their technological disadvantages. They are locked in a passive position over the use of their products.

It is undeniable that the transportation infrastructure in many developing countries faces problems of weak maintenance and inadequate training of maintenance personnel. Western high-tech companies like Boeing generally ignore the characteristics and needs of developing country markets. By comparison, Chinese companies, based on their own development experience, noticed and have met the local needs. Over the past several years, China has not only supplied Modern Ark 60 and Y-12 aircraft to Africa, but has also brought training and management support to help local companies improve their capabilities and stabilize operations. Moreover, Chinese aviation companies have helped African countries to maintain infrastructure facilities.

The resale of old aircraft by developed countries to developing countries in Africa and the South Pacific has also led to potential safety risks. Although the aircraft involved in the fatal crash this time was not an old aircraft, the phenomenon of older aircraft being transferred to developing markets cannot be overlooked. The situation is quite serious in some South Pacific island countries, as I observed on a research trip to Tonga and Samoa.

In order to prevent another tragedy, it is essential to support industrial development in Africa. The development experience of African countries has made them fully aware of Western countries’ “suzerain manner” in politics, “imperialism” in economy and “hegemonism” in culture. As a result, they have gradually lowered their expectations for external support from the West and began to actively explore the development path to indigenous industrialization.

In 2015, the African Union formulated and released its Agenda 2063, declaring that African countries can transform economies, promote economic growth and realize industrialization through beneficiation from Africa’s natural resources and value addition, and that macro policies formulated by governments “must be conducive to economic growth, job creation, investment expansion and industrialization.”

During the 2018 Beijing Summit of the Forum on China-Africa Cooperation, African countries proposed to match Agenda 2063 with the Belt and Road Initiative. Undoubtedly, China-Africa development cooperation has created an unprecedented opportunity for the industrialization and modernization of African countries.

Ethiopia is one of the node countries of the 21st Century Maritime Silk Road. Under the Belt and Road Initiative, Ethiopian Airlines plays an important role in China-Ethiopia economic and trade cooperation.

In this sense, we should boost confidence in Ethiopian Airlines, continue to promote cooperation between China and Africa in connectivity, and enhance personnel and capital exchanges, so as to contribute to the development of indigenous industrialization in Africa.

China’s feline craze boosts the national cat economy

Even though some of the cat lovers don’t have the ability or time to keep a real kitten, they have a long lasting enthusiasm for cat things. They subscribe to as many cat channels as they can on video platforms and stay up to date with cat bloggers they follow on Weibo. They also collect hundreds of cat pictures and memes in their smartphones and like to show them off while chatting with others. Netizens term this phenomenon as yunyangmao, which means “cloud cat keeping.”

Liu Qiuji, a 26-year-old woman living in Beijing, is one of them. Due to the limited space of her apartment and her tight work schedule, it’s impossible for her to keep a real cat at home. But she finds pleasure in browsing other cat owners’ posts and watching cat bloggers’ videos.

“When one of the blogger’s cats I followed died, I felt so sad and even cried at night,” said Liu. “It was like the cat was one of my friends and family members,” she said.

The blogger Liu mentioned is “6daodao,” a popular pet blogger who has 4.3 million followers on China’s Twitter like social media platform Sina Weibo. The blogger now keeps two cats and two dogs. Besides posting video stories and pet photos, he also gets advertising from various pet service companies.

With the prosperity of the cat market, cat bloggers welcome their “golden time.” They not only gain clicks and fame on the internet, but also a lot of money from advertisers. The content of these advertisements ranges from cat food, snacks, toys, hygiene products, furniture and intelligent devices.

“Even when the product has nothing to do with cats, they just need to take several photos with the cat around, and it will sell out in a minute,” said Liu, who told the Global Times that she doesn’t like this way of marketing. “Making money through your beloved family members is something I can’t accept.”

No matter whether you like it or not, the fact is that people tend to spend more money on cat things, and their craze for this little furry creature can go beyond your imagination.

Coffee brand Starbucks released a limited edition cat paw mug on February 26, 2019 in China. Priced at 199 yuan, a thousand pieces of the double glass-walled vessel with interiors made to look like a cat’s paw, sold out in 0.07 seconds online on February 28. People who didn’t get the cup online rushed into nearby shops to take their chances, which even led to fights between the eager customers.

The hunger marketing of Starbucks proves that if you can catch the hearts of cat people, there’s money to be made.

Clean-cut K-pop embroiled in S.Korean sex scandal

Jung, 30, admitted filming himself having sex and sharing the footage without his partners’ consent, while Seungri – real name Lee Seung-hyun – is embroiled in a sex-for-investment criminal investigation.

Both were members of the same chatroom where Jung and others shared illicit content of at least 10 women, according to broadcaster SBS.

South Korea has been battling a growing epidemic of so-called molka, or spycam videos – mostly of women, secretly filmed by men.

But K-pop stars generally cultivate clean-cut images – and are actively promoted by the South Korean government as a key cultural export.

Many face tremendous pressure to look and behave perfectly in an industry powered by so-called “fandoms” – groups of well-organized admirers at home and abroad who spend enormous amounts of time and money to help their favored stars climb up the charts and attack their perceived rivals.

With fortunes at stake they would have more to lose than most by being embroiled in a scandal, even after a wave of #MeToo accusations in the still socially conservative country over the past year.

Lee Moon-won, a popular culture critic in Seoul, said the multilingual Seungri – who has multiple business interests – was popularly seen as the “ideal cultural export.”

“Most of his fans would agree that Seungri is an exceptionally hard-working star,” Lee told AFP.

“On top of his singing career, he somehow mastered Japanese and Chinese, which made him a very useful member whenever Big Bang visited those countries.

“Learning two foreign languages while being a K-pop star is definitely not an easy thing.”

Seungri was interviewed by police during the weekend over accusations that he lobbied potential investors by offering them the services of prostitutes at nightclubs in Seoul’s posh Gangnam district.

The 29-year-old is also linked to a police investigation into Burning Sun, a nightclub where he was a public relations director, where staff are alleged to have filmed women with hidden cameras and used alcohol and drugs to sexually assault them.

Before the scandal, Seungri had been nicknamed the “Great Seungsby” after the protagonist of the Scott Fitzgerald novel the Great Gatsby, for his good looks, his seemingly successful business and the many lavish parties he had thrown.

“It’s ironic how Seungri and Gatsby turned out to have more things in common after the scandal broke,” Lee said.

“Both have engaged in illicit and corrupt activities to gain fame and wealth.”

North Korea rethinks talks with US, missile launch moratorium: official

North Korea is considering whether to continue talks with the US and maintain a moratorium on missile launches and nuclear tests given the US has not changed its attitude, said a North Korean official.

At a press conference on Friday, North Korea’s Vice Foreign Minister Choe Son-hui said that North Korea hasn’t conducted nuclear tests and launched missiles in 15 months, so part of sanctions on the country should be lifted. However, the US said nothing about it but has requested denuclearization repeatedly.

The US attitude is complicating the situation and North Korea believes it is unnecessary to have a similar dialogue unless the US changes its attitude. North Korea is also considering if it is still necessary to suspend missile launches and nuclear tests, said Choe.

The comments came after the second summit between North Korean leader Kim Jong-un and US President Donald Trump in Hanoi, which failed to reach an agreement last month.

Choe said that the US showed no sincerity toward improving the bilateral relationship and carrying out their agreement in Singapore, where the two leaders first met in June 2018.

Kim overcame great difficulty to participate in the Hanoi meeting, said Choe. Many people in the North Korean army believe the country should not abandon nuclear weapons. However, Kim demonstrated a firm determination to carry out the joint statement they reached in Singapore, Choe noted.

Lü Chao, a research fellow at the Liaoning Academy of Social Sciences, told the Global Times on Friday that after the Hanoi summit, North Korea and the US are now at a stage where the two sides are observing each other’s attitudes.

“At this stage, the US should sit on the negotiating table with North Korea as soon as possible in order to maintain the peaceful situation. If the two sides return to the confrontation stage, the Korean Peninsula will be in a dangerous state,” Lü said.

Lü added that any move to escalate the Korean Peninsula issue should be opposed and what North Korea said has its reason.

“North Korea has taken some practical steps toward denuclearization

“At dose rock quarries–working. Ach, mein Gott–little Lena, she speak of drowning. I do not know if she vill do it, but if she shall I schwear I vill dot Peter

Hildesmuller shoot mit a gun.”

“You Dutchers,” said Hondo Bill, his voice swelling with fine contempt, “make me plenty tired. Hirin’ out your kids to work when they ought to be playin’ dolls in the sand. You’re a hell of a sect of people. I reckon we’ll fix your clock for a while just to show what we think of your old cheesy nation. Here, boys!”

Hondo Bill parleyed aside briefly with his band, and then they seized Fritz and conveyed him off the road to one side. Here they bound him fast to a tree with a couple of lariats. His team they tied to another tree near by.

“We ain’t going to hurt you bad,” said Hondo reassuringly. “‘Twon’t hurt you to be tied up for a while. We will now pass you the time of day, as it is up to us to depart. Ausgespielt–nixcumrous, Dutchy. Don’t get any more impatience.”

Fritz heard a great squeaking of saddles as the men mounted their horses. Then a loud yell and a great clatter of hoofs as they galloped pell-mell back along the Fredericksburg road.

For more than two hours Fritz sat against his tree, tightly but not painfully bound. Then from the reaction after his exciting adventure he sank into slumber. How long he slept he knew not, but he was at last awakened by a rough shake. Hands were untying his ropes. He was lifted to his feet, dazed, confused in mind, and weary of body.

Rubbing his eyes, he looked and saw that he was again in the midst of the same band of terrible bandits. They shoved him up to the seat of his wagon and placed the lines in his hands.

“Hit it out for home, Dutch,” said Hondo Bill’s voice commandingly. “You’ve given us lots of trouble and we’re pleased to see the back of your neck. Spiel! Zwei bier!

Vamoose!”

Hondo reached out and gave Blitzen a smart cut with his quirt.

The little mules sprang ahead, glad to be moving again. Fritz urged them along, himself dizzy and muddled over his fearful adventure.

According to schedule time, he should have reached Fredericksburg at daylight. As it was, he drove down the long street of the town at eleven o’clock A.M. He had to pass Peter Hildesmuller’s house on his way to the post-office. He stopped his team at the gate and called. But Frau Hildesmuller was watching for him. Out rushed the whole family of Hildesmullers.

Frau Hildesmuller, fat and flushed, inquired if he had a letter from Lena, and then Fritz raised his voice and told the tale of his adventure. He told the contents of that letter that the robber had made him read, and then Frau Hildesmuller broke into wild weeping. Her little Lena drown herself! Why had they sent her from home? What could be done? Perhaps it would be too late by the time they could send for her now. Peter Hildesmuller dropped his meerschaum on the walk and it shivered into pieces.

“Woman!” he roared at his wife, “why did you let that child go away? It is your fault if she comes home to us no more.”

Every one knew that it was Peter Hildesmuller’s fault, so they paid no attention to his words.

A moment afterward a strange, faint voice was heard to call: “Mamma!” Frau Hildesmuller at first thought it was Lena’s spirit calling, and then she rushed to the rear of Fritz’s covered wagon, and, with a loud shriek of joy, caught up Lena herself, covering her pale little face with kisses and smothering her with hugs. Lena’s eyes were heavy with the deep slumber of exhaustion, but she smiled and lay close to the one she had longed to see. There among the mail sacks, covered in a nest of strange blankets and comforters, she had lain asleep until wakened by the voices around her.

Five candidates shortlisted for Changjiang New Town planning

The solicitation and due diligence work for the overall conceptual planning for the Wuhan Changjiang New Town, as well as urban design proposals for the starting area have been completed. Five proposals were unveiled on the shortlist on January 8.

  Wuhan Changjiang New Town Administration Committee and the Wuhan Land Resources and Planning Bureau jointly launched a solicitation for an overall conceptual planning for the Wuhan Changjiang New Town on September 28, 2017, attracting 78 design institutes from home and abroad of which 30 submitted entries. Five selected candidates all presented a grand blueprint such as shaping Changjiang New Town after the model of Xiong’an New Area, constructing a regional new hub, re-building a multi-dimensional traffic system, constructing a future city that better serves the development of its inhabitants or setting up an ecological city forest ring-belt.

  During the next stage, the five selected design institutes will join hands with Wuhan Planning and Design Institute to integrate the highlights of each program and formulate the overall planning scheme of the Changjiang New Town.

  On November 17, 2017, Wuhan Changjiang New Town Administration Committee and Wuhan Land Resources and Planning Bureau launched another international solicitation for urban design consulting proposals of the starting area of Wuhan Changjiang New Town resulting in 73 individual or joint teams from famous institutes submitting proposals. Five were singled out for the shortlist. Their proposals all attached great importance to the harmonious development between humans and environment. In February two winners will be selected to complete the urban design of the starting area of Wuhan Changjiang New Town before the end of March this year. By Xia Qiong

It would seem indeed a difficult and somewhat graceless office for the Whigs to oppose the first reading of a government bill,

concerning, too, the highest duties of administration, which had received such unqualified approval from all the leading members of their party in the House of Lords, who had competed in declarations of its necessity and acknowledgments of its moderation, while they only regretted the too tardy progress of a measure so indispensable to the safety of the country and the security of her Majesty’s subjects. A curious circumstance, however, saved them from this dilemma, which yet in the strange history of faction they had nevertheless in due time to encounter.
As the Coercion Bill coming from the Lords appeared on the paper of the day in the form of a notice of motion, the Secretary of State, this being a day on which orders have precedence, had to move that such orders of the day should be postponed, so that he might proceed with the motion on the state of Ireland, of which notice had been given. The strict rule of the House is, that on Mondays and Fridays, orders of the day should have precedence of notices of motion, so that it was impossible for the Secretary of State to make his motion, that a certain bill (the Protection of Life—Ireland—Bill) should be read a first time without permission of the House, a permission always granted as a matter of course on such nights to the government, since the business which can be brought forward, whether in the shape of orders or motions, is purely government business, and thus the interests and privilege of no independent member of Parliament can be affected by a relaxation of the rules which the convenience of a ministry and the conduct of public business occasionally require. However, on this night, no sooner had the Secretary of State made, in a few formal words, this formal request, than up sprang Sir William Somerville to move an amendment, that the orders of the day should not be postponed, which he supported in a spirited address, mainly on the ground of the great inconvenience that must be suffered from the postponement of the Corn Bill. The motion of the Secretary of State would produce a long, exciting, and exasperating debate. Time would be lost—for what? To advance one stage of a measure which it was avowedly not the intention of the government to press at the present moment. Sir William concluded with a very earnest appeal to Lord George Bentinck and his friends, who might at no very distant period have the government of Ireland entrusted to them, not, for the sake of a momentary postponement of the Corn Bill, to place themselves, by voting for this measure of coercion, in collision with the Irish nation.’ He called upon Lord George Bentinck to weigh the position in which he was placed.
This amendment was seconded by Mr. Smith O’Brien, the member for the county of Limerick, who warned the government that they ‘were entering on a contest which would continue for months.’ He taunted the minister with governing the country without a party. What chance was there of reconciliation with his estranged friends? After the treatment of that ‘disavowed plenipotentiary,’ the Secretary of the Treasury, who would be again found willing to undertake the mission of patching up a truce? He was not present when the terms of the treaty were exposed: but he understood, that if the government introduced this Coercion Bill before Easter, then that Lord George Bentinck would deem it wise, proper, and expedient; but if after Easter, then the complexion and character of the bill were, in the noble lord’s judgment, utterly transformed, and it was declared to be quite untenable and unconstitutional. Was that the kind of support on which the government calculated for passing this measure?

Gold futures jump to 10-month high ahead of US-China trade talks

Gold futures on the COMEX division of the New York Mercantile Exchange closed at 10-month high on Tuesday, as traders awaited a fresh round of talks between the United States and China.

The most active gold contract for April delivery added 22.70 US dollars, or 1.72 percent, to settle at 1,344.80 dollars per ounce.

Financial markets await the latest trade developments, as China and the United States will have a new round of economic and trade consultations in Washington this week.

The precious metal was also boosted by weakened greenback. The US dollar index, which measures the buck against six rivals, went down 0.33 percent to 96.46 as of 1830 GMT.

Gold usually moves in opposite directions with the US dollar, which means if the dollar goes strong, gold futures will fall as gold, priced in US dollar, becomes expensive for investors using other currencies.

As for other precious metals, silver for March delivery was up 22.40 cents, or 1.42 percent, to settle at 15.967 dollars per ounce. Platinum for April delivery rose 14.10 dollars, or 1.75 percent, to close at 821.00 dollars per ounce.