Chinese President Xi Jinping said on Friday trade talks with the United States will continue in Washington next week and that he hopes the two sides will be able to reach a mutually beneficial deal in the upcoming negotiations, state media reported.

Xi said during a meeting with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin that talks in Beijing this week made progress and that China is willing to solve economic and trade disputes with the United States via cooperation, according to a report by Xinhua.

Lighthizer and Mnuchin said during the meeting that they maintain hope although there is still much work to be done and that they are willing to work with China to reach a deal that is in line with the interests of both countries, according to Xinhua.

The US delegation had a banquet with Chinese counterparts at a Beijing hotel on Thursday night, a person with knowledge of the meetings said. But neither country had offered details on how the two sides might de-escalate a tariff war that has roiled financial markets and disrupted manufacturing supply chains.

US duties on $200 billion worth of imports from China are scheduled to rise to 25 per cent from 10 per cent if no deal is reached by March 1 to address US demands that China curb forced technology transfers and better enforce intellectual property rights.

Although US President Donald Trump said earlier in the week that an extension of the deadline was possible if a "real deal" was close, Larry Kudlow, director of the National Economic Council, said the White House had made no such decision.

Several sources informed about the meetings told Reuters there was little indication negotiators had made major progress on sticking points to pave the way for a potential meeting between Xi and Trump in coming weeks to hammer out a deal.

&nbsp;

Chinese President Xi Jinping said on Friday trade talks with the United States will continue in Washington next week and that he hopes the two sides will be able to reach a mutually beneficial deal in the upcoming negotiations, state media reported.

Chinese President Xi Jinping said on Friday trade talks with the United States will continue in Washington next week and that he hopes the two sides will be able to reach a mutually beneficial deal in the upcoming negotiations, state media reported. Xi said during a meeting with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin that talks in Beijing this week made progress and that China is willing to solve economic and trade disputes with the United States via cooperation, according to a report by Xinhua. Lighthizer and Mnuchin said during the meeting that they maintain hope although there is still much work to be done and that they are willing to work with China to reach a deal that is in line with the interests of both countries, according to Xinhua. The US delegation had a banquet with Chinese counterparts at a Beijing hotel on Thursday night, a person with knowledge of the meetings said. But neither country had offered details on how the two sides might de-escalate a tariff war that has roiled financial markets and disrupted manufacturing supply chains. US duties on $200 billion worth of imports from China are scheduled to rise to 25 per cent from 10 per cent if no deal is reached by March 1 to address US demands that China curb forced technology transfers and better enforce intellectual property rights. Although US President Donald Trump said earlier in the week that an extension of the deadline was possible if a "real deal" was close, Larry Kudlow, director of the National Economic Council, said the White House had made no such decision. Several sources informed about the meetings told Reuters there was little indication negotiators had made major progress on sticking points to pave the way for a potential meeting between Xi and Trump in coming weeks to hammer out a deal.

Trade talks with US to continue in Washington next week: Chinese President Xi Jinping

US and Chinese negotiators kicked off two days of high-level trade talks in Beijing on Thursday hoping to resolve a festering dispute that has cast a shadow over financial markets and the global growth outlook.

Pressure to seal an accord ahead of a March 1 deadline set by <a href="http://www.wionews.com/world/trump-says-confident-in-us-trade-deal-with-china-188332">Donald Trump</a> appears to have eased slightly after the US president indicated he was open to extending a trade truce depending on progress in Beijing.

Trump in December postponed plans to sharply hike tariffs on $200 billion of Chinese imports to allow more time for negotiation.

The two economic superpowers have already imposed duties on more than $360 billion in <a href="http://www.wionews.com/business-economy/china-us-trade-tension-a-major-risk-to-global-growth-imf-chief-192497">two-way trade</a>, which has weighed on their manufacturing sectors and shaken global financial markets.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are meeting with China's top economic czar Liu He, seeking to build on progress made in Washington last month.

We are "looking forward to discussions today," Mnuchin said as he left his hotel Thursday morning for the talks.

Expectations for a trade deal have grown as China faces pressure from slowing economic growth, and as swooning global markets rattle Trump and his economic advisors.

Chinese President Xi Jinping plans to meet with the US officials in Beijing this week, a report in the South China Morning Post said Wednesday, bolstering hopes for the talks and markets in Asia.&nbsp;

Trump also has said he expects to meet with Xi "at some point" to clinch a trade deal.

Trump told reporters in the Oval Office on Wednesday that preliminary talks in Beijing were "going along very well," Bloomberg reported.

"They're showing us tremendous respect," he added.

"Markets will continue to watch — and react — closely to the ups and downs of the negotiations," said Trey McArver of Trivium Research.

"But Sino-US relations are all about the two leaders, and it will ultimately be up to Xi and Trump to come to a deal — or not," he wrote Wednesday in a newsletter.

The two sides said major progress was made in talks last month in Washington, but a wide gulf remains on some issues.

The US is demanding far-reaching changes to Chinese practices that it says are unfair, including theft of US technology and intellectual property, and myriad barriers that foreign companies face in the Chinese domestic market.

Beijing has offered to boost its purchases of US goods but is widely expected to resist calls for major changes to its industrial policies such as slashing government subsidies.

The International Monetary Fund warned on Sunday of a possible global economic "storm" as world growth forecasts dip, citing the US-China trade row as a key pivot point. 
&nbsp;

US and Chinese negotiators kicked off two days of high-level trade talks in Beijing on Thursday hoping to resolve a festering dispute that has cast a shadow over financial markets and the global growth outlook.

US and Chinese negotiators kicked off two days of high-level trade talks in Beijing on Thursday hoping to resolve a festering dispute that has cast a shadow over financial markets and the global growth outlook. Pressure to seal an accord ahead of a March 1 deadline set by Donald Trump appears to have eased slightly after the US president indicated he was open to extending a trade truce depending on progress in Beijing. Trump in December postponed plans to sharply hike tariffs on $200 billion of Chinese imports to allow more time for negotiation. The two economic superpowers have already imposed duties on more than $360 billion in two-way trade, which has weighed on their manufacturing sectors and shaken global financial markets. US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are meeting with China's top economic czar Liu He, seeking to build on progress made in Washington last month. We are "looking forward to discussions today," Mnuchin said as he left his hotel Thursday morning for the talks. Expectations for a trade deal have grown as China faces pressure from slowing economic growth, and as swooning global markets rattle Trump and his economic advisors. Chinese President Xi Jinping plans to meet with the US officials in Beijing this week, a report in the South China Morning Post said Wednesday, bolstering hopes for the talks and markets in Asia. Trump also has said he expects to meet with Xi "at some point" to clinch a trade deal. Trump told reporters in the Oval Office on Wednesday that preliminary talks in Beijing were "going along very well," Bloomberg reported. "They're showing us tremendous respect," he added. "Markets will continue to watch — and react — closely to the ups and downs of the negotiations," said Trey McArver of Trivium Research. "But Sino-US relations are all about the two leaders, and it will ultimately be up to Xi and Trump to come to a deal — or not," he wrote Wednesday in a newsletter. The two sides said major progress was made in talks last month in Washington, but a wide gulf remains on some issues. The US is demanding far-reaching changes to Chinese practices that it says are unfair, including theft of US technology and intellectual property, and myriad barriers that foreign companies face in the Chinese domestic market. Beijing has offered to boost its purchases of US goods but is widely expected to resist calls for major changes to its industrial policies such as slashing government subsidies. The International Monetary Fund warned on Sunday of a possible global economic "storm" as world growth forecasts dip, citing the US-China trade row as a key pivot point.

US, China open trade talks in Beijing as deadline looms

High level US trade negotiators in Beijing will meet with Chinese President Xi Jinping, a top White House official confirmed Thursday.

President Donald Trump's economic advisor Larry Kudlow told reporters in Washington that he'd just talked to the delegation, which includes US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

"They're covering all the ground. They're hard at it. They are going to meet with President Xi, so that's a very good sign," he said.

Kudlow said "the vibe is good."

But he said there'd been "no decision" on extending a March 1 truce in tariff hikes between the world's two main economic powers.

Earlier, the South China Morning Post reported that the US officials would meet with Xi, bolstering hopes for a successful outcome in the talks.

Trump has said he is open to extending the March 1 deadline to give time for more negotiations and he says he will meet with Xi to finalise any deal.

The United States accuses China of a slew of unfair trading practices, including systemic theft of US intellectual property, and wants deep reforms to the system.

Beijing and Washington have already imposed duties on more than $360 billion in two-way trade, weighing on their manufacturing sectors and shaking global financial markets.

High level US trade negotiators in Beijing will meet with Chinese President Xi Jinping, a top White House official confirmed Thursday. President Donald Trump's economic advisor Larry Kudlow told reporters in Washington that he'd just talked to the delegation, which includes US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

High level US trade negotiators in Beijing will meet with Chinese President Xi Jinping, a top White House official confirmed Thursday. President Donald Trump's economic advisor Larry Kudlow told reporters in Washington that he'd just talked to the delegation, which includes US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. "They're covering all the ground. They're hard at it. They are going to meet with President Xi, so that's a very good sign," he said. Kudlow said "the vibe is good." But he said there'd been "no decision" on extending a March 1 truce in tariff hikes between the world's two main economic powers. Earlier, the South China Morning Post reported that the US officials would meet with Xi, bolstering hopes for a successful outcome in the talks. Trump has said he is open to extending the March 1 deadline to give time for more negotiations and he says he will meet with Xi to finalise any deal. The United States accuses China of a slew of unfair trading practices, including systemic theft of US intellectual property, and wants deep reforms to the system. Beijing and Washington have already imposed duties on more than $360 billion in two-way trade, weighing on their manufacturing sectors and shaking global financial markets.

US trade negotiators to meet with Chinese President Xi Jinping: White House

Two US warships sailed near islands claimed by <a href="http://www.wionews.com/world/china-calls-us-warship-in-south-china-sea-a-provocation-188818">China in the South China Sea </a>on Monday, a US official told Reuters, a move likely to anger Beijing at a time of tense relations between the world's two biggest economies.

Beijing and Washington are locked in a trade war and the two sides are trying to hammer out a deal ahead of a March 1 deadline when US tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 per cent from 10 per cent.

Escalating tensions between the United States and China have cost both countries billions of dollars and roiled global financial markets.

The official, speaking on condition of anonymity, said the <a href="http://www.wionews.com/world/naval-destroyer-sailed-through-south-china-sea-to-ensure-freedom-of-navigation-us-188742">two guided-missile destroyers</a> travelled within 12 nautical miles of Mischief Reef in the disputed Spratly Islands.

The operation was the latest attempt to counter what Washington sees as Beijing's efforts to limit freedom of navigation in the strategic waters, where Chinese, Japanese and some Southeast Asian navies operate.

China claims almost all of the strategic South China Sea and frequently lambastes the United States and its allies over naval operations near Chinese-occupied islands.

China and the United States have repeatedly traded barbs in the past over what Washington says is Beijing’s militarisation of the South China Sea by building military installations on artificial islands and reefs.

China defends its construction as necessary for self-defence and says it is the United States that is responsible for ratcheting up tensions in the region by sending warships and military planes close to islands Beijing claims.

Vietnam, the Philippines, Brunei, Malaysia, Indonesia and Taiwan have competing claims in the region.

Fears have grown in recent months that the US-China trade dispute is just one element in a bilateral relationship that is fast cooling across the board, with top US administration officials sharply criticising Beijing for everything from human rights abuses to cyber espionage in the United States.

The two countries are also at odds over regional security, including Washington’s overtures to the self-ruled island of Taiwan, which China claims as its own. 
&nbsp;

Two US warships sailed near islands claimed by China in the South China Sea on Monday, a US official told Reuters, a move likely to anger Beijing at a time of tense relations between the world's two biggest economies.

Two US warships sailed near islands claimed by China in the South China Sea on Monday, a US official told Reuters, a move likely to anger Beijing at a time of tense relations between the world's two biggest economies. Beijing and Washington are locked in a trade war and the two sides are trying to hammer out a deal ahead of a March 1 deadline when US tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 per cent from 10 per cent. Escalating tensions between the United States and China have cost both countries billions of dollars and roiled global financial markets. The official, speaking on condition of anonymity, said the two guided-missile destroyers travelled within 12 nautical miles of Mischief Reef in the disputed Spratly Islands. The operation was the latest attempt to counter what Washington sees as Beijing's efforts to limit freedom of navigation in the strategic waters, where Chinese, Japanese and some Southeast Asian navies operate. China claims almost all of the strategic South China Sea and frequently lambastes the United States and its allies over naval operations near Chinese-occupied islands. China and the United States have repeatedly traded barbs in the past over what Washington says is Beijing’s militarisation of the South China Sea by building military installations on artificial islands and reefs. China defends its construction as necessary for self-defence and says it is the United States that is responsible for ratcheting up tensions in the region by sending warships and military planes close to islands Beijing claims. Vietnam, the Philippines, Brunei, Malaysia, Indonesia and Taiwan have competing claims in the region. Fears have grown in recent months that the US-China trade dispute is just one element in a bilateral relationship that is fast cooling across the board, with top US administration officials sharply criticising Beijing for everything from human rights abuses to cyber espionage in the United States. The two countries are also at odds over regional security, including Washington’s overtures to the self-ruled island of Taiwan, which China claims as its own.

US guided missile destroyers sail near disputed islands in South China Sea amid tensions with China

<a href="http://www.wionews.com/business-economy/gold-rises-as-us-government-shutdown-deepens-global-growth-concerns-192633">Gold prices</a> held firm on Monday, supported by worries over a slowdown in global economic growth and uncertainties around Sino-US trade war, but a strong dollar limited the safe-haven metal's appeal.

Spot gold was marginally lower at $1,312.76 per ounce, as of 0254 GMT, while US gold futures fell 0.2 per cent to $1,316.50 per ounce.

"Global growth worries, the absence of positive signs in US-China trade (talks) and reduction in the euro-zone growth forecasts have laid a strong foundation for gold in the longer run," said Benjamin Lu, an analyst with Singapore-based Phillip Futures.

"There are a lot of headwinds for gold in the near-term from the six-week rally in US equities and a vigorous dollar."

Investors are looking ahead to trade talks between Beijing and Washington this week with a delegation of US officials travelling to China for the next round of negotiations. US President Donald Trump said last week that he had no plans to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal.

Trump has vowed to increase US tariffs on $200 billion worth of Chinese imports if the two sides cannot reach a deal by 12:01 a.m. (0501 GMT) on March 2.

Trade tensions between the world's top two economies have rattled financial markets since last year and also boosted the appeal of the US dollar as a safe-haven.

The dollar index was hovering near a more than one-month high touched in the previous session.

A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.

Gold slumped to a more than 1-1/2-year low in mid-August to $1,159.96 on rising interest rates and a strong dollar. But, tumultuous stock markets and expectations of a pause in interest rate hikes this year helped gold touch a nine-month high at $1,326.30 in late January.

Tighter financial conditions since last September make further interest rate hikes seem much less necessary than just a few months ago, San Francisco Federal Reserve Bank President Mary Daly said on Friday.

While gold is supported by the Fed's dovish policy, prices will likely remain range-bound until there is clarity on the trade front and US government shutdown, OANDA analyst Edward Moya said in a note.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, saw outflows for five straight sessions last week.

Talks on border security funding collapsed after Democratic and Republican lawmakers clashed over immigrant detention policy as they worked to avert another US government shutdown.

Meanwhile, palladium fell 0.5 per cent to $1,395 an ounce.

Spot silver dropped 0.2 per cent to $15.79, while platinum was down 0.5 perc ent at $794.

Gold prices held firm on Monday, supported by worries over a slowdown in global economic growth and uncertainties around Sino-US trade war, but a strong dollar limited the safe-haven metal's appeal.

Gold prices held firm on Monday, supported by worries over a slowdown in global economic growth and uncertainties around Sino-US trade war, but a strong dollar limited the safe-haven metal's appeal. Spot gold was marginally lower at $1,312.76 per ounce, as of 0254 GMT, while US gold futures fell 0.2 per cent to $1,316.50 per ounce. "Global growth worries, the absence of positive signs in US-China trade (talks) and reduction in the euro-zone growth forecasts have laid a strong foundation for gold in the longer run," said Benjamin Lu, an analyst with Singapore-based Phillip Futures. "There are a lot of headwinds for gold in the near-term from the six-week rally in US equities and a vigorous dollar." Investors are looking ahead to trade talks between Beijing and Washington this week with a delegation of US officials travelling to China for the next round of negotiations. US President Donald Trump said last week that he had no plans to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal. Trump has vowed to increase US tariffs on $200 billion worth of Chinese imports if the two sides cannot reach a deal by 12:01 a.m. (0501 GMT) on March 2. Trade tensions between the world's top two economies have rattled financial markets since last year and also boosted the appeal of the US dollar as a safe-haven. The dollar index was hovering near a more than one-month high touched in the previous session. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies. Gold slumped to a more than 1-1/2-year low in mid-August to $1,159.96 on rising interest rates and a strong dollar. But, tumultuous stock markets and expectations of a pause in interest rate hikes this year helped gold touch a nine-month high at $1,326.30 in late January. Tighter financial conditions since last September make further interest rate hikes seem much less necessary than just a few months ago, San Francisco Federal Reserve Bank President Mary Daly said on Friday. While gold is supported by the Fed's dovish policy, prices will likely remain range-bound until there is clarity on the trade front and US government shutdown, OANDA analyst Edward Moya said in a note. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, saw outflows for five straight sessions last week. Talks on border security funding collapsed after Democratic and Republican lawmakers clashed over immigrant detention policy as they worked to avert another US government shutdown. Meanwhile, palladium fell 0.5 per cent to $1,395 an ounce. Spot silver dropped 0.2 per cent to $15.79, while platinum was down 0.5 perc ent at $794.

Gold holds steady on global growth concerns; trade talks in focus

Asian markets mostly rose Friday, with investors treading carefully as <a href="http://www.wionews.com/world/us-china-trade-talks-begin-amid-deep-differences-193945">China-US trade talks</a> ended with no deal but with both sides sounding notes of optimism and setting up more high-level meetings later this month.

After the much-anticipated gathering, Donald Trump hailed "tremendous progress" between the world's top two economies but warned the "hard deadline" of March 1 remained in place, after which US tariffs on billions of dollars of Chinese goods will be imposed.

For its part, Beijing said they held "candid, specific and fruitful" discussions and had agreed to increase cooperation on intellectual property — a major source of White House anger with China — and boost imports of US goods.

Trump's top two economic officials will visit Beijing later this month, after which he said he will meet his counterpart Xi Jinping to hammer out the final deal.

While the negotiations ended with no agreement, Jeffrey Halley, senior market analyst at OANDA, said: "For the markets, which are clearly in 'risk-on' mood, it was a case of no news is good news."

However, an early surge across the region petered out to leave markets mixed.

Tokyo ended 0.1 per cent higher and Hong Kong was marginally lower, while Shanghai jumped 1.3 per cent as traders welcomed news that authorities had relaxed certain rules to make investing easier.

Sydney and Singapore were both flat and Seoul dipped 0.1 per cent, though Manila, Mumbai, Bangkok and Jakarta were all up.

In early trade, London rose 0.3 per cent, while Frankfurt and Paris each added 0.2 per cent.

"The statement certainly signals progress, but at best-limited progress on the core long-term structural issues that separate the two sides," Eswar Prasad, a trade policy professor at Cornell University, told Bloomberg News.

"The statement ends with a not-so-veiled threat that China will need to offer more substantive concessions to enable a deal that would take further tariffs off the table."

The tepid movement in markets also comes after an impressive month that saw Hong Kong pile on more than eight per cent and Tokyo more than four per cent, a much-needed bounce after December's hammering.

Next on the agenda is the release of US jobs data later Friday, which comes days after the Federal Reserve fueled a rally by signalling a slowdown in its pace of interest rate hikes this year.

The non-farm payrolls figures will be closely watched for an idea about the state of the world's number-one economy, with the Fed having warned of a global slowdown.

Asian markets mostly rose Friday, with investors treading carefully as China-US trade talks ended with no deal but with both sides sounding notes of optimism and setting up more high-level meetings later this month.

Asian markets mostly rose Friday, with investors treading carefully as China-US trade talks ended with no deal but with both sides sounding notes of optimism and setting up more high-level meetings later this month. After the much-anticipated gathering, Donald Trump hailed "tremendous progress" between the world's top two economies but warned the "hard deadline" of March 1 remained in place, after which US tariffs on billions of dollars of Chinese goods will be imposed. For its part, Beijing said they held "candid, specific and fruitful" discussions and had agreed to increase cooperation on intellectual property — a major source of White House anger with China — and boost imports of US goods. Trump's top two economic officials will visit Beijing later this month, after which he said he will meet his counterpart Xi Jinping to hammer out the final deal. While the negotiations ended with no agreement, Jeffrey Halley, senior market analyst at OANDA, said: "For the markets, which are clearly in 'risk-on' mood, it was a case of no news is good news." However, an early surge across the region petered out to leave markets mixed. Tokyo ended 0.1 per cent higher and Hong Kong was marginally lower, while Shanghai jumped 1.3 per cent as traders welcomed news that authorities had relaxed certain rules to make investing easier. Sydney and Singapore were both flat and Seoul dipped 0.1 per cent, though Manila, Mumbai, Bangkok and Jakarta were all up. In early trade, London rose 0.3 per cent, while Frankfurt and Paris each added 0.2 per cent. "The statement certainly signals progress, but at best-limited progress on the core long-term structural issues that separate the two sides," Eswar Prasad, a trade policy professor at Cornell University, told Bloomberg News. "The statement ends with a not-so-veiled threat that China will need to offer more substantive concessions to enable a deal that would take further tariffs off the table." The tepid movement in markets also comes after an impressive month that saw Hong Kong pile on more than eight per cent and Tokyo more than four per cent, a much-needed bounce after December's hammering. Next on the agenda is the release of US jobs data later Friday, which comes days after the Federal Reserve fueled a rally by signalling a slowdown in its pace of interest rate hikes this year. The non-farm payrolls figures will be closely watched for an idea about the state of the world's number-one economy, with the Fed having warned of a global slowdown.

Asian markets mixed as China, US agree to further trade talks

Gold prices edged higher on Friday amid concerns that a prolonged <a href="https://www.google.com/url?q=http://www.wionews.com/world/we-cant-pay-informants-fbi-on-us-government-shutdown-192096&amp;sa=U&amp;ved=0ahUKEwim7JrvjojgAhVKv48KHSO-DdkQFggFMAA&amp;client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;usg=AOvVaw0dRzgZiX_rSxNlQ65tbxBd">US government shutdown </a>could exacerbate an already slowing global growth, while markets awaited US-China trade talks scheduled for next week.

Spot gold rose 0.2 per cent at $1,282.50 per ounce, as of 0343 GMT, while US gold futures were steady at $1,281.40 per ounce.

Investors are worried about the economic impact of the longest US government shutdown in history, now in its 34th day, with two bills to end the partial shutdown failing to win enough votes in the Senate.

"There are some positive features supporting gold like the US government shutdown, ongoing trade war and potential for slower rate hikes," said John Sharma, an economist with National Australia Bank.

"At the moment, people are waiting for the US-China trade discussions," Sharma said, adding that any development on that front could provide a direction for gold.

The United States and China are "miles and miles" from resolving trade issues, but there is a fair chance the two countries will get a deal, US Commerce Secretary Wilbur Ross said on Thursday.

Concerns about slowing global economy and hopes that the US Federal Reserve will pause its multi-year rate hike cycle are supporting gold, analysts said.

A synchronised global economic slowdown is underway and any escalation in the <a href="https://www.google.com/url?q=http://www.wionews.com/business-economy/imf-cuts-global-forecast-due-to-us-china-trade-tensions-191841&amp;sa=U&amp;ved=0ahUKEwibjvXajojgAhUYaI8KHZdKDtoQFggFMAA&amp;client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;usg=AOvVaw1P8ubV5EDxGkjQi6PzMCZS">US-China trade</a> war would trigger a sharper downturn, according to the latest Reuters polls of hundreds of economists from around the world.

"We expect that a topping out of US real yields will put a firmer floor under gold prices this year and Fed's hiking cycle to peter out in 2019," said Sabrin Chowdhury, commodities analyst at Fitch Solutions.

"Global risk-aversion will rise in 2019 and flows into safe-haven assets, including gold, are likely to pick up."

Meanwhile, the dollar index, which measures the greenback against a basket of currencies, fell 0.2 per cent, after a report that Northern Ireland's Democratic Unionist Party has privately decided to offer conditional backing for Prime Minister Theresa May's Brexit deal next week.&nbsp;

A softer dollar makes gold less expensive for holders of other currencies.

Technically, spot gold has found support at $1,278 per ounce, and it may hover above this level or bounce towards resistance at $1,289, according to Reuters analyst Wang Tao.

Among other metals, palladium, which hit a record high of $1,434.50 an ounce last week on low inventories and rising demand, was steady at $1,320 on Friday.

It registered its biggest intraday percentage decline since December 21, falling 2 per cent to $1,313.50 on Thursday. The metal also was heading for its first weekly fall in five weeks.

Silver was up 0.3 per cent at $15.35 per ounce while platinum gained 0.3 per cent to $803.

Gold prices edged higher on Friday amid concerns that a prolonged US government shutdown could exacerbate an already slowing global growth, while markets awaited US-China trade talks scheduled for next week.

Gold prices edged higher on Friday amid concerns that a prolonged US government shutdown could exacerbate an already slowing global growth, while markets awaited US-China trade talks scheduled for next week. Spot gold rose 0.2 per cent at $1,282.50 per ounce, as of 0343 GMT, while US gold futures were steady at $1,281.40 per ounce. Investors are worried about the economic impact of the longest US government shutdown in history, now in its 34th day, with two bills to end the partial shutdown failing to win enough votes in the Senate. "There are some positive features supporting gold like the US government shutdown, ongoing trade war and potential for slower rate hikes," said John Sharma, an economist with National Australia Bank. "At the moment, people are waiting for the US-China trade discussions," Sharma said, adding that any development on that front could provide a direction for gold. The United States and China are "miles and miles" from resolving trade issues, but there is a fair chance the two countries will get a deal, US Commerce Secretary Wilbur Ross said on Thursday. Concerns about slowing global economy and hopes that the US Federal Reserve will pause its multi-year rate hike cycle are supporting gold, analysts said. A synchronised global economic slowdown is underway and any escalation in the US-China trade war would trigger a sharper downturn, according to the latest Reuters polls of hundreds of economists from around the world. "We expect that a topping out of US real yields will put a firmer floor under gold prices this year and Fed's hiking cycle to peter out in 2019," said Sabrin Chowdhury, commodities analyst at Fitch Solutions. "Global risk-aversion will rise in 2019 and flows into safe-haven assets, including gold, are likely to pick up." Meanwhile, the dollar index, which measures the greenback against a basket of currencies, fell 0.2 per cent, after a report that Northern Ireland's Democratic Unionist Party has privately decided to offer conditional backing for Prime Minister Theresa May's Brexit deal next week. A softer dollar makes gold less expensive for holders of other currencies. Technically, spot gold has found support at $1,278 per ounce, and it may hover above this level or bounce towards resistance at $1,289, according to Reuters analyst Wang Tao. Among other metals, palladium, which hit a record high of $1,434.50 an ounce last week on low inventories and rising demand, was steady at $1,320 on Friday. It registered its biggest intraday percentage decline since December 21, falling 2 per cent to $1,313.50 on Thursday. The metal also was heading for its first weekly fall in five weeks. Silver was up 0.3 per cent at $15.35 per ounce while platinum gained 0.3 per cent to $803.

Gold rises as US government shutdown deepens global growth concerns

Asian stocks rose across the board on Friday, buoyed by gains in US technology shares while investors awaited several key events next week including US-China trade talks.

The euro struggled near a six-week low versus the dollar following dovish-sounding comments from European Central Bank President Mario Draghi, who expressed concerns about the eurozone economy.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.95 per cent to scale its highest since December 4.

The index was headed for a gain of 0.6 per cent this week, with strong corporate earnings helping somewhat to counter growing concerns over slowing global economic growth.

The Shanghai Composite Index rose 0.6 per cent.

Tech-heavy South Korean shares added 0.9 per cent. Australian stocks climbed 0.8 per cent, lifted by higher prices of commodities such as iron ore and crude oil.

Japan's Nikkei advanced 1.4 per cent with technology companies boosted by a surge in their US peers.

"Investors who were already excited about the U.S. chip sector's earnings the day before got even more reassured after they saw how their stocks moved," said Shogo Maekawa, a global market strategist at JPMorgan Asset Management.

Maekawa added that a recovery in the global cyclical chip sector is taken as a silver-lining amid concerns about a global economic slowdown.

A synchronised global economic slowdown is underway and any escalation in the US-China trade war would trigger a sharper downturn, according to the latest Reuters polls of hundreds of economists from around the world.

"Equities may be drawing some support but the markets are bracing for next week's events," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

"The US-China trade discussions will provide insight into how talks are progressing, while the British parliamentary voting is a key Brexit event. And there is also the FOMC (Federal Open Market Committee) meeting."

Chinese Vice Premier Liu He will visit the United States on January 30 and 31 for the next round of trade negotiations with Washington.

The two sides are "miles and miles" from resolving trade issues but there is a fair chance they will get a deal, US Commerce Secretary Wilbur Ross said on Thursday.

The British parliament will debate and vote on Prime Minister Theresa May's Brexit "plan B" on January 29, and the US Federal Reserve concludes a two-day policy setting meeting on January 30.

The Nasdaq had risen roughly 0.7 per cent on Thursday thanks to a rally by chipmakers, while the S&amp;P 500 edged higher and the Dow closed nominally lower as anxiety about slowing global growth and the Sino-U.S. trade dispute undercut a spate of strong earnings.

In currency markets, the euro was a shade firmer at $1.1316 but still in close reach of a six-week trough of $1.1289 plumbed overnight. The euro was down 0.4 per cent this week.

The single currency slid after ECB President Draghi acknowledged on Thursday that economic growth in the euro zone was likely to be weaker than earlier expected due to the fall-out from factors ranging from China's slowdown to Brexit.

Germany has dropped its economic growth forecast for 2019 to 1.0 per cent from 1.8 per cent due to slower global economic growth and uncertainty about Britain's exit from the European Union, the Handelsblatt newspaper reported on Thursday.

The ECB had left its policy stance unchanged as expected on Thursday and Draghi's downbeat comments added to speculation that the central bank will hold back on interest rate hikes that some market watchers had expected in October.

The pound was up 0.4 per cent at $1.3109 after brushing a two-month high of $1.3130, lifted after The Sun reported on Thursday that Northern Ireland's Democratic Unionist Party has privately decided to back Prime Minister May's Brexit deal next week if it includes a clear time limit to the Irish backstop.

The dollar nudged up 0.1 per cent to 109.74 yen and on track to end the week little changed.

The benchmark 10-year US Treasury note yield was slightly higher at 2.724 per cent after dropping to a one-week low as concerns over slowing global growth supported safe-haven government debt.

Crude oil extended gains after rallying the previous day as the United States threatened sanctions on Venezuela's crude exports as the country descended further into political and economic turmoil.

US crude oil futures were up 1.3 per cent at $53.82 per barrel after gaining 1 per cent on Thursday.

Asian stocks rose across the board on Friday, buoyed by gains in US technology shares while investors awaited several key events next week including US-China trade talks.

Asian stocks rose across the board on Friday, buoyed by gains in US technology shares while investors awaited several key events next week including US-China trade talks. The euro struggled near a six-week low versus the dollar following dovish-sounding comments from European Central Bank President Mario Draghi, who expressed concerns about the eurozone economy. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.95 per cent to scale its highest since December 4. The index was headed for a gain of 0.6 per cent this week, with strong corporate earnings helping somewhat to counter growing concerns over slowing global economic growth. The Shanghai Composite Index rose 0.6 per cent. Tech-heavy South Korean shares added 0.9 per cent. Australian stocks climbed 0.8 per cent, lifted by higher prices of commodities such as iron ore and crude oil. Japan's Nikkei advanced 1.4 per cent with technology companies boosted by a surge in their US peers. "Investors who were already excited about the U.S. chip sector's earnings the day before got even more reassured after they saw how their stocks moved," said Shogo Maekawa, a global market strategist at JPMorgan Asset Management. Maekawa added that a recovery in the global cyclical chip sector is taken as a silver-lining amid concerns about a global economic slowdown. A synchronised global economic slowdown is underway and any escalation in the US-China trade war would trigger a sharper downturn, according to the latest Reuters polls of hundreds of economists from around the world. "Equities may be drawing some support but the markets are bracing for next week's events," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management. "The US-China trade discussions will provide insight into how talks are progressing, while the British parliamentary voting is a key Brexit event. And there is also the FOMC (Federal Open Market Committee) meeting." Chinese Vice Premier Liu He will visit the United States on January 30 and 31 for the next round of trade negotiations with Washington. The two sides are "miles and miles" from resolving trade issues but there is a fair chance they will get a deal, US Commerce Secretary Wilbur Ross said on Thursday. The British parliament will debate and vote on Prime Minister Theresa May's Brexit "plan B" on January 29, and the US Federal Reserve concludes a two-day policy setting meeting on January 30. The Nasdaq had risen roughly 0.7 per cent on Thursday thanks to a rally by chipmakers, while the S&P 500 edged higher and the Dow closed nominally lower as anxiety about slowing global growth and the Sino-U.S. trade dispute undercut a spate of strong earnings. In currency markets, the euro was a shade firmer at $1.1316 but still in close reach of a six-week trough of $1.1289 plumbed overnight. The euro was down 0.4 per cent this week. The single currency slid after ECB President Draghi acknowledged on Thursday that economic growth in the euro zone was likely to be weaker than earlier expected due to the fall-out from factors ranging from China's slowdown to Brexit. Germany has dropped its economic growth forecast for 2019 to 1.0 per cent from 1.8 per cent due to slower global economic growth and uncertainty about Britain's exit from the European Union, the Handelsblatt newspaper reported on Thursday. The ECB had left its policy stance unchanged as expected on Thursday and Draghi's downbeat comments added to speculation that the central bank will hold back on interest rate hikes that some market watchers had expected in October. The pound was up 0.4 per cent at $1.3109 after brushing a two-month high of $1.3130, lifted after The Sun reported on Thursday that Northern Ireland's Democratic Unionist Party has privately decided to back Prime Minister May's Brexit deal next week if it includes a clear time limit to the Irish backstop. The dollar nudged up 0.1 per cent to 109.74 yen and on track to end the week little changed. The benchmark 10-year US Treasury note yield was slightly higher at 2.724 per cent after dropping to a one-week low as concerns over slowing global growth supported safe-haven government debt. Crude oil extended gains after rallying the previous day as the United States threatened sanctions on Venezuela's crude exports as the country descended further into political and economic turmoil. US crude oil futures were up 1.3 per cent at $53.82 per barrel after gaining 1 per cent on Thursday.

Asia stocks firm, euro sags after dovish ECB

<a href="http://www.wionews.com/world/house-speaker-pelosi-says-trump-cannot-give-state-of-union-speech-until-he-ends-govt-shutdown-192338">US President Donald Trump</a> said Wednesday that Washington is doing "very well" in trade talks with China and that Beijing is keen to strike a deal ending their trade war.

China "wants to make a deal," he said at the White House. "We're doing very well in the negotiations."

Data showing China's economy grew at its weakest pace in three decades have fuelled fears it is heading for a rocky patch, exacerbated by the pressure from US tariffs.&nbsp;

Trump argues that China has skewed the trading rules for decades and must agree to substantial reductions in import barriers, while boosting protection for US intellectual property.

However, the tit-for-tat tariffs between the world's two main economic powers have also hurt US economic confidence and markets are waiting anxiously for a deal.

On Wednesday, Chinese Vice President Wang Qishan told an audience at the World Economic Forum in Davos that "the Chinese and US economies are mutually indispensable, so their relations must be mutually beneficial and win-win."&nbsp;

US President Donald Trump said Wednesday that Washington is doing "very well" in trade talks with China and that Beijing is keen to strike a deal ending their trade war.

US President Donald Trump said Wednesday that Washington is doing "very well" in trade talks with China and that Beijing is keen to strike a deal ending their trade war. China "wants to make a deal," he said at the White House. "We're doing very well in the negotiations." Data showing China's economy grew at its weakest pace in three decades have fuelled fears it is heading for a rocky patch, exacerbated by the pressure from US tariffs. Trump argues that China has skewed the trading rules for decades and must agree to substantial reductions in import barriers, while boosting protection for US intellectual property. However, the tit-for-tat tariffs between the world's two main economic powers have also hurt US economic confidence and markets are waiting anxiously for a deal. On Wednesday, Chinese Vice President Wang Qishan told an audience at the World Economic Forum in Davos that "the Chinese and US economies are mutually indispensable, so their relations must be mutually beneficial and win-win."

US doing 'very well' in China trade talks: Trump

Asian stocks advanced on Friday as a report of progress in US-China trade talks stirred hopes of a deal in their tariff dispute and supported risk sentiment.

The Wall Street Journal reported on Thursday that US Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for January 30.

US stocks rallied following the report, but pared some of those gains after a Treasury spokesperson told CNBC that Mnuchin had not made any such recommendations. WSJ also reported that US Trade Representative Robert Lighthizer has resisted Mnuchin`s idea. For the day, all three major US indexes were up, led by a surge in industrial stocks.&nbsp;

Even the whiff of progress in the months-long Sino-U.S. trade war helped boost risk sentiment. MSCI`s broadest index of Asia-Pacific shares outside Japan added 0.7 per cent. The index has gained 1.4 per cent this week.

The Shanghai Composite Index was up 0.8 per cent.

Australian stocks rose 0.5 per cent, as did South Korea`s KOSPI while Japan`s Nikkei gained more than 1 per cent to a one-month high.

"As with 2018, the U.S.-China trade row remains a key market theme in 2019. A slight difference is that there are some signs that the two sides are seeking some sort of a resolution," said Soichiro Monji, senior economist at Daiwa SB Investments in Tokyo.

"China seems to be running low on options, while the United States would also want to avoid a prolonged conflict given the negative consequences on its markets and the economy," Monji said.

Chinese Vice Premier Liu He will visit the United States on January 30 and 31 for the latest round of trade talks aimed at resolving the dispute between the world`s two largest economies.

In December, Washington and Beijing agreed to a 90-day truce in a trade war that has disrupted the flow of hundreds of billions of dollars of goods.

Indicators released recently have shown signs that the Chinese economy is losing some momentum.

China`s fourth-quarter economic growth, due to be reported on Monday, likely slowed to the weakest pace since the global financial crisis, a Reuters poll showed, as demand faltered at home and abroad.

The dollar was mildly supported after US Treasury yields rose amid the improvement in risk appetite in the broader markets.

The greenback was a shade higher at 109.320 yen after popping up to a two-week high of 109.40 overnight. The dollar has gained about 0.7 per cent against the Japanese currency this week.

The euro was little changed at $1.1393 after dipping slightly overnight. The common currency was on track for a weekly loss of 0.7 per cent.

The 10-year Treasury yield stood at 2.750 per cent after going brushing 2.761 per cent the previous day, its highest in three weeks.

The pound traded at $1.2978, hovering close to a two-month peak of $1.3001 scaled overnight on the back of hopes that Britain can avoid a no-deal Brexit.

British Prime Minister Theresa May`s Brexit deal suffered a heavy defeat in parliament this week but she survived a subsequent vote of confidence, removing some political uncertainty for now.

US crude oil futures extended gains after rising the previous day on a bounce in Wall Street and news that OPEC sharply curtailed production in December.&nbsp;

US crude futures added 1 per cent to $52.61 per barrel. The contracts have gained more than 2 per cent this week.

Brent crude was up 0.8 per cent at $61.67 per barrel and on track to gain 2 per cent on the week.

Elsewhere in commodities, palladium was 0.6 per cent higher at $1,403.50 an ounce after rising to an all-time high of $1,434.50 overnight.

Demand has recently outstripped supply for the metal, used in emissions-reducing catalytic converters for cars. Palladium also appeared to get a boost from hopes for further government stimulus in China, the world`s biggest auto market.&nbsp;

Spot gold was steady at $1,291.56 an ounce, having relinquished its spot as the most expensive precious metal to palladium early in December.

Asian stocks advanced on Friday as a report of progress in US-China trade talks stirred hopes of a deal in their tariff dispute and supported risk sentiment. The Wall Street Journal reported on Thursday that US Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for January 30.

Asian stocks advanced on Friday as a report of progress in US-China trade talks stirred hopes of a deal in their tariff dispute and supported risk sentiment. The Wall Street Journal reported on Thursday that US Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for January 30. US stocks rallied following the report, but pared some of those gains after a Treasury spokesperson told CNBC that Mnuchin had not made any such recommendations. WSJ also reported that US Trade Representative Robert Lighthizer has resisted Mnuchin`s idea. For the day, all three major US indexes were up, led by a surge in industrial stocks. Even the whiff of progress in the months-long Sino-U.S. trade war helped boost risk sentiment. MSCI`s broadest index of Asia-Pacific shares outside Japan added 0.7 per cent. The index has gained 1.4 per cent this week. The Shanghai Composite Index was up 0.8 per cent. Australian stocks rose 0.5 per cent, as did South Korea`s KOSPI while Japan`s Nikkei gained more than 1 per cent to a one-month high. "As with 2018, the U.S.-China trade row remains a key market theme in 2019. A slight difference is that there are some signs that the two sides are seeking some sort of a resolution," said Soichiro Monji, senior economist at Daiwa SB Investments in Tokyo. "China seems to be running low on options, while the United States would also want to avoid a prolonged conflict given the negative consequences on its markets and the economy," Monji said. Chinese Vice Premier Liu He will visit the United States on January 30 and 31 for the latest round of trade talks aimed at resolving the dispute between the world`s two largest economies. In December, Washington and Beijing agreed to a 90-day truce in a trade war that has disrupted the flow of hundreds of billions of dollars of goods. Indicators released recently have shown signs that the Chinese economy is losing some momentum. China`s fourth-quarter economic growth, due to be reported on Monday, likely slowed to the weakest pace since the global financial crisis, a Reuters poll showed, as demand faltered at home and abroad. The dollar was mildly supported after US Treasury yields rose amid the improvement in risk appetite in the broader markets. The greenback was a shade higher at 109.320 yen after popping up to a two-week high of 109.40 overnight. The dollar has gained about 0.7 per cent against the Japanese currency this week. The euro was little changed at $1.1393 after dipping slightly overnight. The common currency was on track for a weekly loss of 0.7 per cent. The 10-year Treasury yield stood at 2.750 per cent after going brushing 2.761 per cent the previous day, its highest in three weeks. The pound traded at $1.2978, hovering close to a two-month peak of $1.3001 scaled overnight on the back of hopes that Britain can avoid a no-deal Brexit. British Prime Minister Theresa May`s Brexit deal suffered a heavy defeat in parliament this week but she survived a subsequent vote of confidence, removing some political uncertainty for now. US crude oil futures extended gains after rising the previous day on a bounce in Wall Street and news that OPEC sharply curtailed production in December. US crude futures added 1 per cent to $52.61 per barrel. The contracts have gained more than 2 per cent this week. Brent crude was up 0.8 per cent at $61.67 per barrel and on track to gain 2 per cent on the week. Elsewhere in commodities, palladium was 0.6 per cent higher at $1,403.50 an ounce after rising to an all-time high of $1,434.50 overnight. Demand has recently outstripped supply for the metal, used in emissions-reducing catalytic converters for cars. Palladium also appeared to get a boost from hopes for further government stimulus in China, the world`s biggest auto market. Spot gold was steady at $1,291.56 an ounce, having relinquished its spot as the most expensive precious metal to palladium early in December.

Global Markets: Asia stocks advance on US-China trade relief

By Christopher Dent

The clock is ticking for China and the US to resolve their trade dispute. Some progress was made at the last round of talks (January 7-9) but negotiators must find a comprehensive agreement by March 2.&nbsp;

If they fail, the US government plans to raise tariffs from 10 per cent to 25 per cent on $200 billion of Chinese imports. This would have an enormous impact not just on US-China bilateral trade but also on many other countries due to global supply chain linkages.

The US president, Donald Trump, wishes to adjust the “terms of trade” between both countries, addressing what he alleges are China’s “unfair” trading practices. Many observers believe this is a battle not just about trade but also about economic and technological supremacy.

The Trump administration accuses China of stealing technology from American companies. It has also been critical of the Chinese government’s strategic plans to make the country a world leader in industry sectors such as aerospace, renewable energy, robotics and electric vehicles. The recent successful landing of a Chinese spacecraft on the Moon would have caused further consternation among Americans fearful of China’s new technological capacities.

The US says it wants China to become a free market economy and ditch its state management approach. Ironically, the credibility of America’s position on this matter is undermined by Trump’s own protectionist stance on trade, which itself constitutes significant state intervention in the marketplace.

But, despite their political and economic differences, the reality is that the US and China’s economies are deeply interconnected through various layers of commercial, financial and production links. The two are so entwined that they have been dubbed a symbiotic “Chimerica” economy.

Economic interdependence

US-China economic interdependence has to be carefully managed and many companies are critical of the Trump administration’s decision to raise tariffs. They rightly warn that aggressive US actions against China will ultimately harm American firms, workers and consumers. What’s more, the world’s two largest national economies lie at the core of an ever more integrated global economy. Any significant disruption to their relationship will have major ramifications for businesses worldwide.

From his actions and tweeted thinking to date, it appears that Trump is failing to acknowledge the extent of US-China economic interdependence, or is choosing to ignore it. While the US trade deficit of $336 billion with China in 2017 is at some level a cause for concern, China recycles much of its surplus back through buying US government securities.

Taking the car industry as an example, we can reasonably assume that Trump wishes to see more cars made by Ford, General Motors and other American firms in the US, which get sold both at home and in foreign markets. Ideally, in Trump’s view, they would also be sourcing materials and parts from US-based companies, thus overall generating more jobs and prosperity for Americans. But this cannot be sustainably achieved through protectionist trade measures.

Trump’s adoption of a defensive economic nationalist position and a simplistic “imports bad, exports good” mindset chimes with a 19th-century view of the world economy. Then it was the norm for companies to organise production in one nation and simply export from it. Today, technological advances mean companies increasingly organise their production across nations, mainly for reasons of cost efficiency, making goods cheaper to buy and providing wider consumer choice. In many of the world’s major industries, it makes no economic sense today to do otherwise.

Competitive advantage

For companies, the ultimate arbiter of success is the consumer. The fundamental reason why the sales of American car manufacturers have fallen over the years – both at home and in export markets – is not due to “unfair” trade practices but because they lack competitiveness. The same logic applies to other industries.

Sales of foreign cars in Japan illustrates this. While the Japanese car market is hard for foreign firms to penetrate, Japan does not apply import tariffs in this sector. So both European and US firms face the same challenges in satisfying the discerning Japanese consumer.

From 2013 to 2016, Japan’s imports of US cars fell from 23,381 to 19,933, whereas imports of European vehicles increased from 239,090 to 251,155. If Trump wishes American car makers to expand production and exports, they need to produce more competitive and desirable products.

Sometimes, this is extraordinarily difficult to achieve in industries experiencing deep structural decline, such as the US steel sector. There are, of course, many other sectors where American firms have developed a competitive advantage over their foreign rivals, such as cinema and television shows, popular culture, financial services and university education.

Higher tariffs on US imports of goods from China and other countries will in most cases be passed on as higher prices to American consumers, raising inflation and, in turn, interest rates. One of the ironies of imposing import tariffs on goods from China is that a high volume of these will come from US companies such as Apple and Dell, which assemble their products cost competitively in China, then export them to US consumers. Trump calls for these firms to relocate their production back to the US, but comparatively much higher labour and other costs would lead to higher prices for consumers and inflation.

It is time for the US president to end his short-sighted and self-harming trade policies, and fully appreciate the inter-connected nature of the 21st-century global economy and society. The future health of the global economy depends on a good working partnership between the US and China. Both countries must quickly end this trade war and focus instead on establishing more harmonious relations – for all our sakes.

(Christopher Dent is Senior Lecturer, Edge Hill University)

(This article was originally published on The Conversation. Read the <a href="https://theconversation.com/why-there-will-be-no-winners-from-the-us-china-trade-war-109822">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

&nbsp;

By Christopher Dent The clock is ticking for China and the US to resolve their trade dispute. Some progress was made at the last round of talks (January 7-9) but negotiators must find a comprehensive agreement by March 2.

By Christopher Dent The clock is ticking for China and the US to resolve their trade dispute. Some progress was made at the last round of talks (January 7-9) but negotiators must find a comprehensive agreement by March 2. If they fail, the US government plans to raise tariffs from 10 per cent to 25 per cent on $200 billion of Chinese imports. This would have an enormous impact not just on US-China bilateral trade but also on many other countries due to global supply chain linkages. The US president, Donald Trump, wishes to adjust the “terms of trade” between both countries, addressing what he alleges are China’s “unfair” trading practices. Many observers believe this is a battle not just about trade but also about economic and technological supremacy. The Trump administration accuses China of stealing technology from American companies. It has also been critical of the Chinese government’s strategic plans to make the country a world leader in industry sectors such as aerospace, renewable energy, robotics and electric vehicles. The recent successful landing of a Chinese spacecraft on the Moon would have caused further consternation among Americans fearful of China’s new technological capacities. The US says it wants China to become a free market economy and ditch its state management approach. Ironically, the credibility of America’s position on this matter is undermined by Trump’s own protectionist stance on trade, which itself constitutes significant state intervention in the marketplace. But, despite their political and economic differences, the reality is that the US and China’s economies are deeply interconnected through various layers of commercial, financial and production links. The two are so entwined that they have been dubbed a symbiotic “Chimerica” economy. Economic interdependence US-China economic interdependence has to be carefully managed and many companies are critical of the Trump administration’s decision to raise tariffs. They rightly warn that aggressive US actions against China will ultimately harm American firms, workers and consumers. What’s more, the world’s two largest national economies lie at the core of an ever more integrated global economy. Any significant disruption to their relationship will have major ramifications for businesses worldwide. From his actions and tweeted thinking to date, it appears that Trump is failing to acknowledge the extent of US-China economic interdependence, or is choosing to ignore it. While the US trade deficit of $336 billion with China in 2017 is at some level a cause for concern, China recycles much of its surplus back through buying US government securities. Taking the car industry as an example, we can reasonably assume that Trump wishes to see more cars made by Ford, General Motors and other American firms in the US, which get sold both at home and in foreign markets. Ideally, in Trump’s view, they would also be sourcing materials and parts from US-based companies, thus overall generating more jobs and prosperity for Americans. But this cannot be sustainably achieved through protectionist trade measures. Trump’s adoption of a defensive economic nationalist position and a simplistic “imports bad, exports good” mindset chimes with a 19th-century view of the world economy. Then it was the norm for companies to organise production in one nation and simply export from it. Today, technological advances mean companies increasingly organise their production across nations, mainly for reasons of cost efficiency, making goods cheaper to buy and providing wider consumer choice. In many of the world’s major industries, it makes no economic sense today to do otherwise. Competitive advantage For companies, the ultimate arbiter of success is the consumer. The fundamental reason why the sales of American car manufacturers have fallen over the years – both at home and in export markets – is not due to “unfair” trade practices but because they lack competitiveness. The same logic applies to other industries. Sales of foreign cars in Japan illustrates this. While the Japanese car market is hard for foreign firms to penetrate, Japan does not apply import tariffs in this sector. So both European and US firms face the same challenges in satisfying the discerning Japanese consumer. From 2013 to 2016, Japan’s imports of US cars fell from 23,381 to 19,933, whereas imports of European vehicles increased from 239,090 to 251,155. If Trump wishes American car makers to expand production and exports, they need to produce more competitive and desirable products. Sometimes, this is extraordinarily difficult to achieve in industries experiencing deep structural decline, such as the US steel sector. There are, of course, many other sectors where American firms have developed a competitive advantage over their foreign rivals, such as cinema and television shows, popular culture, financial services and university education. Higher tariffs on US imports of goods from China and other countries will in most cases be passed on as higher prices to American consumers, raising inflation and, in turn, interest rates. One of the ironies of imposing import tariffs on goods from China is that a high volume of these will come from US companies such as Apple and Dell, which assemble their products cost competitively in China, then export them to US consumers. Trump calls for these firms to relocate their production back to the US, but comparatively much higher labour and other costs would lead to higher prices for consumers and inflation. It is time for the US president to end his short-sighted and self-harming trade policies, and fully appreciate the inter-connected nature of the 21st-century global economy and society. The future health of the global economy depends on a good working partnership between the US and China. Both countries must quickly end this trade war and focus instead on establishing more harmonious relations – for all our sakes. (Christopher Dent is Senior Lecturer, Edge Hill University) (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Why there will be no winners from the US-China trade war

Amidst sequential escalation of US-China 'heated cold war', Pentagon has released a new report on January 16, airing US concerns about China’s growing military capability. The report highlights a contingency about a possible attack on Taiwan.

This is an important development after the coercive&nbsp;speech of Chinese President Xi Jinping at the beginning of 2019.

This Pentagon report, however, needs to be read in the context of US-China conflict.

The interpretation of the report indicates the expeditionary design of Chinese military strategy with global ambition, exploiting its increased ‘comprehensive national power’ (CNP) with improved technology, economics, military hardware. Chinese rapid advancement in hypersonic weaponry, cyber warfare, sea and air power have allowed it to look beyond its “active defence strategy” and slow-moving “incremental encroachment strategy”.

It puts a spotlight on the increasing number of bases which can be turned into military bases at short notice.&nbsp;The continuous increase in its defence budget has helped People's Liberation Army (PLA) to modernise, posing a serious challenge to regional neighbours.&nbsp; &nbsp;&nbsp;

The US position&nbsp;

As per the information in open domain, the report does not cover US position in response to Chinese growing military capability in the context of Taiwan as it is strategically important to them. In a joint communique with PRC (The People's Republic of China) in 1972, the US had adopted the line of declaration of independence by Taiwan.

The US, however, remains opposed to any unilateral changes in status quo by either side. The US will, therefore, like to have a democratic, independently governed Taiwan as an ally, where they have adequate strategic and economic leverage, instead of it forming part of Communist PRC. 
 
Neither Taiwan nor China nor the US have crossed the redline&nbsp;so far. The US security assurance in terms of Taiwan Relations Act, indirectly promises to make available "such defence equipment and services, as may be necessary to enable Taiwan to maintain a sufficient self-defence capability."

Last year, the US defence budget was more than the next seven countries put together including China; I do not see China posing a military challenge or competition to the US in a global arena, however, in the near vicinity of its eastern seaboard, it may pose some challenge in the South China Sea and Taiwan Strait. The recently signed Taiwan Travel Act, the sale of military hardware to Taiwan indicates that the US is in no mood to give a walkover when it comes to Taiwan.

China's position

PRC claims Taiwan as its integral part and is looking for its peaceful reunification, which continues to be a dream. PRC passed the Anti-Secession Law in 2005, authorising war - in case of island formally declaring statehood: hence any effort towards its independence will invite Chinese action to protect its sovereign territory. The speeches by Chinese president have brought the US and Taiwan much closer and much sooner than what Xi would have expected. Taiwan seems to have got bolder today and is talking of self-defence indicating that Chinese coercion has not worked so far.&nbsp;

Will China use force against Taiwan &nbsp;

President Xi Jinping has ordered the Southern Theatre Command, responsible for monitoring the South China Sea and Taiwan, to get ready for war, but in my opinion, China will not use force against Taiwan due to many reasons. First, adventurism by China in Taiwan at the time of trade war with the US does not make any economic sense as bulks of Taiwan’s investments are already in China with Taiwan having a trade surplus of approximately $30 billion with China. China gains nothing but has a lot to lose if it attacks Taiwan. Second, its adventurism will amount to crossing the red line defined by the US, which treats Taiwan no less than an ally.&nbsp;

The threatening speech by Chinese president against Taiwan and all the countries helping them is to deter Taiwan from getting stronger to pursue the path of independence. &nbsp; 
 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Amidst sequential escalation of US-China 'heated cold war', Pentagon has released a new report on January 16, airing US concerns about China’s growing military capability.

Amidst sequential escalation of US-China 'heated cold war', Pentagon has released a new report on January 16, airing US concerns about China’s growing military capability. The report highlights a contingency about a possible attack on Taiwan. This is an important development after the coercive speech of Chinese President Xi Jinping at the beginning of 2019. This Pentagon report, however, needs to be read in the context of US-China conflict. The interpretation of the report indicates the expeditionary design of Chinese military strategy with global ambition, exploiting its increased ‘comprehensive national power’ (CNP) with improved technology, economics, military hardware. Chinese rapid advancement in hypersonic weaponry, cyber warfare, sea and air power have allowed it to look beyond its “active defence strategy” and slow-moving “incremental encroachment strategy”. It puts a spotlight on the increasing number of bases which can be turned into military bases at short notice. The continuous increase in its defence budget has helped People's Liberation Army (PLA) to modernise, posing a serious challenge to regional neighbours. The US position As per the information in open domain, the report does not cover US position in response to Chinese growing military capability in the context of Taiwan as it is strategically important to them. In a joint communique with PRC (The People's Republic of China) in 1972, the US had adopted the line of declaration of independence by Taiwan. The US, however, remains opposed to any unilateral changes in status quo by either side. The US will, therefore, like to have a democratic, independently governed Taiwan as an ally, where they have adequate strategic and economic leverage, instead of it forming part of Communist PRC. Neither Taiwan nor China nor the US have crossed the redline so far. The US security assurance in terms of Taiwan Relations Act, indirectly promises to make available "such defence equipment and services, as may be necessary to enable Taiwan to maintain a sufficient self-defence capability." Last year, the US defence budget was more than the next seven countries put together including China; I do not see China posing a military challenge or competition to the US in a global arena, however, in the near vicinity of its eastern seaboard, it may pose some challenge in the South China Sea and Taiwan Strait. The recently signed Taiwan Travel Act, the sale of military hardware to Taiwan indicates that the US is in no mood to give a walkover when it comes to Taiwan. China's position PRC claims Taiwan as its integral part and is looking for its peaceful reunification, which continues to be a dream. PRC passed the Anti-Secession Law in 2005, authorising war - in case of island formally declaring statehood: hence any effort towards its independence will invite Chinese action to protect its sovereign territory. The speeches by Chinese president have brought the US and Taiwan much closer and much sooner than what Xi would have expected. Taiwan seems to have got bolder today and is talking of self-defence indicating that Chinese coercion has not worked so far. Will China use force against Taiwan President Xi Jinping has ordered the Southern Theatre Command, responsible for monitoring the South China Sea and Taiwan, to get ready for war, but in my opinion, China will not use force against Taiwan due to many reasons. First, adventurism by China in Taiwan at the time of trade war with the US does not make any economic sense as bulks of Taiwan’s investments are already in China with Taiwan having a trade surplus of approximately $30 billion with China. China gains nothing but has a lot to lose if it attacks Taiwan. Second, its adventurism will amount to crossing the red line defined by the US, which treats Taiwan no less than an ally. The threatening speech by Chinese president against Taiwan and all the countries helping them is to deter Taiwan from getting stronger to pursue the path of independence. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Decoding report which raises concerns over China attacking Taiwan

Canada's ambassador met in Beijing Friday with a detained former diplomat for the first time since he was arrested in China amid sharpening East-West tensions over trade and other issues.

Michael Kovrig, the former diplomat, and a second Canadian, Michael Spavor, were taken into custody earlier in the week after a <a href="http://www.wionews.com/world/do-not-politicise-extradition-cases-canada-warns-us-183654">top Chinese tech executive was arrested</a> in Vancouver at the request of the United States.

Canada's foreign ministry said its ambassador to Beijing, John McCallum, was granted consular access to Kovrig and is pressing for access to Spavor. Speaking to The Canadian Press, Prime Minister Justin Trudeau predicted that access would take place "shortly."

"We are being absolutely clear on standing up for our citizens who have been detained, trying to figure out why, trying to work with China to demonstrate that this not acceptable," he told Citytv in Toronto.

Meanwhile, in Washington, Canada's foreign and defence ministers held talks with their US counterparts on the row.

The Canadians were arrested for what China has said is suspicion of "harm to national security" -- a phrase often used by Beijing when alleging espionage.

But the detentions are widely believed to be retaliation for Canada's arrest December 1 of Meng Wanzhou, the chief financial officer of Chinese telecom giant Huawei.

Meng was arrested while changing planes in Vancouver, outraging China and sparking a diplomatic standoff between the North American allies and Beijing.

"This is one of the situations you get in when the two largest economies in the world, China and the United States, start picking a fight with each other," Trudeau said.&nbsp;

"The escalating trade war between them is going to have all sorts of unintended consequences for Canada, potentially the entire global economy. We're very worried about that."

The United States has accused her of lying to bankers about the use of a covert subsidiary to sell to Iran in breach of sanctions. If convicted, she faces more than 30 years in prison.

On Tuesday, a Canadian judge ordered Meng's release on Can$10 million ($7.5 million US) bail, pending a US extradition hearing.

Visit shelved

Canadian Tourism Minister Melanie Joly, meanwhile, shelved a trip to China next week to promote tourism.

Since Beijing approved Canada as a tourist destination for its citizens in 2010, the number of Chinese tourists visiting Canada has risen by 20 percent per year to almost 700,000 in 2017.

Ottawa had hoped to double the figure by 2021, opening seven new visa application offices in China this year to facilitate the processing of travel documents. But those targets are now in doubt amid a public backlash in China.

Kovrig, who works for the International Crisis Group (ICG) think tank, was being investigated by the Beijing bureau of state security, while the agency's office in northeastern Liaoning province was handling the probe into Spavor, Lu said.

Spavor is a China-based business consultant who facilitates trips to North Korea, met with its leader Kim Jong Un and arranged some of retired NBA star Dennis Rodman's trips to the country.

China's foreign ministry said ICG was not registered in China and its employees would be "in violation" of the law if they engage in activities in the country.

ICG closed its office in the Chinese capital after Beijing passed a law on NGOs, which came into force in 2017, to better control the activities on its soil of foreign organizations.

Kovrig was based in Hong Kong for ICG, working on foreign policy and security issues in the region, particularly on the Korean Peninsula.

Canada's ambassador met in Beijing Friday with a detained former diplomat for the first time since he was arrested in China amid sharpening East-West tensions over trade and other issues.

Canada's ambassador met in Beijing Friday with a detained former diplomat for the first time since he was arrested in China amid sharpening East-West tensions over trade and other issues. Michael Kovrig, the former diplomat, and a second Canadian, Michael Spavor, were taken into custody earlier in the week after a top Chinese tech executive was arrested in Vancouver at the request of the United States. Canada's foreign ministry said its ambassador to Beijing, John McCallum, was granted consular access to Kovrig and is pressing for access to Spavor. Speaking to The Canadian Press, Prime Minister Justin Trudeau predicted that access would take place "shortly." "We are being absolutely clear on standing up for our citizens who have been detained, trying to figure out why, trying to work with China to demonstrate that this not acceptable," he told Citytv in Toronto. Meanwhile, in Washington, Canada's foreign and defence ministers held talks with their US counterparts on the row. The Canadians were arrested for what China has said is suspicion of "harm to national security" -- a phrase often used by Beijing when alleging espionage. But the detentions are widely believed to be retaliation for Canada's arrest December 1 of Meng Wanzhou, the chief financial officer of Chinese telecom giant Huawei. Meng was arrested while changing planes in Vancouver, outraging China and sparking a diplomatic standoff between the North American allies and Beijing. "This is one of the situations you get in when the two largest economies in the world, China and the United States, start picking a fight with each other," Trudeau said. "The escalating trade war between them is going to have all sorts of unintended consequences for Canada, potentially the entire global economy. We're very worried about that." The United States has accused her of lying to bankers about the use of a covert subsidiary to sell to Iran in breach of sanctions. If convicted, she faces more than 30 years in prison. On Tuesday, a Canadian judge ordered Meng's release on Can$10 million ($7.5 million US) bail, pending a US extradition hearing. Visit shelved Canadian Tourism Minister Melanie Joly, meanwhile, shelved a trip to China next week to promote tourism. Since Beijing approved Canada as a tourist destination for its citizens in 2010, the number of Chinese tourists visiting Canada has risen by 20 percent per year to almost 700,000 in 2017. Ottawa had hoped to double the figure by 2021, opening seven new visa application offices in China this year to facilitate the processing of travel documents. But those targets are now in doubt amid a public backlash in China. Kovrig, who works for the International Crisis Group (ICG) think tank, was being investigated by the Beijing bureau of state security, while the agency's office in northeastern Liaoning province was handling the probe into Spavor, Lu said. Spavor is a China-based business consultant who facilitates trips to North Korea, met with its leader Kim Jong Un and arranged some of retired NBA star Dennis Rodman's trips to the country. China's foreign ministry said ICG was not registered in China and its employees would be "in violation" of the law if they engage in activities in the country. ICG closed its office in the Chinese capital after Beijing passed a law on NGOs, which came into force in 2017, to better control the activities on its soil of foreign organizations. Kovrig was based in Hong Kong for ICG, working on foreign policy and security issues in the region, particularly on the Korean Peninsula.

Canada granted consular access to ex-diplomat held by China: Official

President Donald Trump on Friday predicted a major <a href="http://www.wionews.com/world/trump-and-china-called-a-truce-in-the-trade-war-now-what-181070">US-China trade deal</a> in the near future, saying that Beijing's negotiating position had been weakened by the impact of the tariffs war between the world's top two economies.

"China wants to make a big and very comprehensive deal. It could happen, and rather soon!" Trump tweeted.

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China just announced that their economy is growing much slower than anticipated because of our Trade War with them. They have just suspended U.S. Tariff Hikes. U.S. is doing very well. China wants to make a big and very comprehensive deal. It could happen, and rather soon!
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1073617541476569088?ref_src=twsrc%5Etfw">December 14, 2018</a></blockquote>
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His optimism followed China's decision earlier Friday to back off from extra punitive duties that had been imposed this summer on US-made cars and auto parts.

The move was seen as the first concrete result of the US leader's<a href="http://www.wionews.com/world/us-china-agree-to-trade-war-ceasefire-more-talks-180930"> G20 talks with his counterpart Xi Jinping </a>earlier this month.

Those tariffs now fall from 40 per cent to 15 per cent -- the same rate imposed on all foreign-made vehicles. The relief will last for three months from January 1.

"Suspension of the tariffs is a concrete measure to implement the consensus reached by the two heads of state," said the announcement by the State Council's Tariff Commission Office, noting it applied to 211 product codes.

Trump said the climbdown showed that China had been forced to blink in their on-off spat, after months of heavy <a href="http://www.wionews.com/world/china-envoy-warns-of-dire-consequences-if-us-hardliners-hold-sway-179861">US tariffs</a> on Chinese imports.

"China just announced that their economy is growing much slower than anticipated because of our Trade War with them. They have just suspended U.S. Tariff Hikes. US&nbsp;is doing very well," Trump said.

Beijing's move also demonstrated that talks to resolve the trade conflict have survived the tension sparked by Canada's arrest of a top Chinese telecom executive at the behest of US law enforcement.

Meng Wanzhou, chief financial officer of telecoms behemoth Huawei, has been released on bail in Canada. China wants her unconditional release. Washington wants her extradited for allegedly violating US sanctions on Iran.

China apparently retaliated by detaining two Canadians on suspicion of "harm to national security" -- a phrase often used by Beijing when alleging espionage.

Washington insists that the case is driven purely by the US Justice Department, rather than anything to do with the trade dispute, but Trump has muddied the waters by suggesting he might intervene if that would help the trade talks.

Tit for tat

Trump and Chinese leader Xi Jinping agreed on the sidelines of the G20 summit in Buenos Aires on December 1 to a 90-day truce while they tried to find a solution to the escalating trade dispute.

Confusion and unease over what agreement the two sides reached in Argentina has roiled stock markets.

But trade negotiators talked on the phone this week to discuss a timetable for talks. Friday's announcement in Beijing also confirms what Trump said on December 2 about China acting on the auto tariffs.

"We hope that both sides will -- in accordance with the consensus reached by the two heads of state, on the premise of mutual respect, mutual equality, faithfulness, words and actions -- intensify consultations in the direction of cancelling all of the extra tariff increases," the State Council's statement said.

Stand to benefit

The tariff suspension will benefit US carmakers like Tesla and Ford which have seen China sales tumble.

"It is essential that governments work together to advance balanced and fair trade. We look forward to learning more," a spokesman for Ford said after Trump announced China would cut car tariffs.

International automakers Daimler, maker of the Mercedes-Benz, and BMW have also exported American-made SUVs to China.

US exports to China fell 25 per cent on-year in November as the higher tariffs on hundreds of American goods hurt demand.

In another signal that China may move to satisfy Trump, the country's top legislature announced Friday that it would hold a session from December 23-29 to discuss legislation on foreign investment and draft revisions to the patent law.

The United States has long complained of a lack of fair access for foreign companies in China and rampant theft of intellectual property.

For now, the National People's Congress Standing Committee has not provided details about the draft legislation.

Maintaining and resolving the trade truce could help stabilize sentiment in China, where confidence in the economy has been hurt by the trade frictions with Washington.

Earlier on Friday, economic data showed Chinese consumer spending grew at its slowest pace in 15 years and factories eased up in November, raising the prospect that Beijing could turn to fresh stimulus measures to help the sputtering economy.

China's top officials on the Politburo said in a statement Thursday that major economic indicators will be kept within a reasonable range next year.

"The meeting also signalled further market opening," economists at Trivium Research wrote in a newsletter.

President Donald Trump on Friday predicted a major US-China trade deal in the near future, saying that Beijing's negotiating position had been weakened by the impact of the tariffs war between the world's top two economies.

President Donald Trump on Friday predicted a major US-China trade deal in the near future, saying that Beijing's negotiating position had been weakened by the impact of the tariffs war between the world's top two economies. "China wants to make a big and very comprehensive deal. It could happen, and rather soon!" Trump tweeted. China just announced that their economy is growing much slower than anticipated because of our Trade War with them. They have just suspended U.S. Tariff Hikes. U.S. is doing very well. China wants to make a big and very comprehensive deal. It could happen, and rather soon! — Donald J. Trump (@realDonaldTrump) December 14, 2018 × His optimism followed China's decision earlier Friday to back off from extra punitive duties that had been imposed this summer on US-made cars and auto parts. The move was seen as the first concrete result of the US leader's G20 talks with his counterpart Xi Jinping earlier this month. Those tariffs now fall from 40 per cent to 15 per cent -- the same rate imposed on all foreign-made vehicles. The relief will last for three months from January 1. "Suspension of the tariffs is a concrete measure to implement the consensus reached by the two heads of state," said the announcement by the State Council's Tariff Commission Office, noting it applied to 211 product codes. Trump said the climbdown showed that China had been forced to blink in their on-off spat, after months of heavy US tariffs on Chinese imports. "China just announced that their economy is growing much slower than anticipated because of our Trade War with them. They have just suspended U.S. Tariff Hikes. US is doing very well," Trump said. Beijing's move also demonstrated that talks to resolve the trade conflict have survived the tension sparked by Canada's arrest of a top Chinese telecom executive at the behest of US law enforcement. Meng Wanzhou, chief financial officer of telecoms behemoth Huawei, has been released on bail in Canada. China wants her unconditional release. Washington wants her extradited for allegedly violating US sanctions on Iran. China apparently retaliated by detaining two Canadians on suspicion of "harm to national security" -- a phrase often used by Beijing when alleging espionage. Washington insists that the case is driven purely by the US Justice Department, rather than anything to do with the trade dispute, but Trump has muddied the waters by suggesting he might intervene if that would help the trade talks. Tit for tat Trump and Chinese leader Xi Jinping agreed on the sidelines of the G20 summit in Buenos Aires on December 1 to a 90-day truce while they tried to find a solution to the escalating trade dispute. Confusion and unease over what agreement the two sides reached in Argentina has roiled stock markets. But trade negotiators talked on the phone this week to discuss a timetable for talks. Friday's announcement in Beijing also confirms what Trump said on December 2 about China acting on the auto tariffs. "We hope that both sides will -- in accordance with the consensus reached by the two heads of state, on the premise of mutual respect, mutual equality, faithfulness, words and actions -- intensify consultations in the direction of cancelling all of the extra tariff increases," the State Council's statement said. Stand to benefit The tariff suspension will benefit US carmakers like Tesla and Ford which have seen China sales tumble. "It is essential that governments work together to advance balanced and fair trade. We look forward to learning more," a spokesman for Ford said after Trump announced China would cut car tariffs. International automakers Daimler, maker of the Mercedes-Benz, and BMW have also exported American-made SUVs to China. US exports to China fell 25 per cent on-year in November as the higher tariffs on hundreds of American goods hurt demand. In another signal that China may move to satisfy Trump, the country's top legislature announced Friday that it would hold a session from December 23-29 to discuss legislation on foreign investment and draft revisions to the patent law. The United States has long complained of a lack of fair access for foreign companies in China and rampant theft of intellectual property. For now, the National People's Congress Standing Committee has not provided details about the draft legislation. Maintaining and resolving the trade truce could help stabilize sentiment in China, where confidence in the economy has been hurt by the trade frictions with Washington. Earlier on Friday, economic data showed Chinese consumer spending grew at its slowest pace in 15 years and factories eased up in November, raising the prospect that Beijing could turn to fresh stimulus measures to help the sputtering economy. China's top officials on the Politburo said in a statement Thursday that major economic indicators will be kept within a reasonable range next year. "The meeting also signalled further market opening," economists at Trivium Research wrote in a newsletter.

'Big' China-US trade deal could happen rather soon : Trump

India's bid to start trade with China in domestic currency has suffered a setback when China outrightly rejected the demand. The move could have not only helped India bridge the trade deficit with China but could also have acted as a booster for the depreciating rupee.

The trade deficit between the two Asian neighbours has ballooned to $63 billion in China's favour. This is over a nine-fold increase over the past decade, claimed a Reuters report.&nbsp;

India's export to China has improved in the last few years but there hasn't been any colossal change in the trends. It's export to China had grown by 13 per cent in FY17, by 31 per cent in FY18, and by around 17 per cent in the first half of FY19.&nbsp;

While India wants to supply more sugar, medicines, soymeal, rapeseed meal, and rice to China, the latter want to increase its export of dairy products, apples and pears.&nbsp;

The meeting between Indian Prime Minister Narendra Modi and Chinese President Xi Jinping on the sidelines of G20 Summit has not yielded anything good for India except a progress in talks.&nbsp;

China had imposed a ban on Soymeal import from India over quality issues in 2011. India is trying hard to get the ban removed. Also, the trade tariff truce between China and the US is good news for global markets but not for India.&nbsp;

India and China need to iron out their differences as neither of the two neighbours can afford to sit back comfortably amid&nbsp;uncertainty about the US trade policy.

However, bridging a trade deficit of this magnitude will not be an easy task for India especially when the Sino-US trade battle is seeing a temporary truce. The escalation of the issue may have forced China to look for alternatives like India. Nonetheless, the trade war is a temporary solution. China and India must work collectively to find a permanent solution to the persisting issues.

As of now, India is trying to catch a train which has just left the platform with China onboard.&nbsp; 
 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

India's bid to start trade with China in domestic currency has suffered a setback when China outrightly rejected the demand. The move could have not only helped India bridge the trade deficit with China but could also have acted as a booster for the depreciating rupee.

India's bid to start trade with China in domestic currency has suffered a setback when China outrightly rejected the demand. The move could have not only helped India bridge the trade deficit with China but could also have acted as a booster for the depreciating rupee. The trade deficit between the two Asian neighbours has ballooned to $63 billion in China's favour. This is over a nine-fold increase over the past decade, claimed a Reuters report. India's export to China has improved in the last few years but there hasn't been any colossal change in the trends. It's export to China had grown by 13 per cent in FY17, by 31 per cent in FY18, and by around 17 per cent in the first half of FY19. While India wants to supply more sugar, medicines, soymeal, rapeseed meal, and rice to China, the latter want to increase its export of dairy products, apples and pears. The meeting between Indian Prime Minister Narendra Modi and Chinese President Xi Jinping on the sidelines of G20 Summit has not yielded anything good for India except a progress in talks. China had imposed a ban on Soymeal import from India over quality issues in 2011. India is trying hard to get the ban removed. Also, the trade tariff truce between China and the US is good news for global markets but not for India. India and China need to iron out their differences as neither of the two neighbours can afford to sit back comfortably amid uncertainty about the US trade policy. However, bridging a trade deficit of this magnitude will not be an easy task for India especially when the Sino-US trade battle is seeing a temporary truce. The escalation of the issue may have forced China to look for alternatives like India. Nonetheless, the trade war is a temporary solution. China and India must work collectively to find a permanent solution to the persisting issues. As of now, India is trying to catch a train which has just left the platform with China onboard. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

India, China must take steps to bridge trade deficit

The United States has delivered Russia a 60-day ultimatum on Tuesday to come “clean” about what Washington says is a violation of the 1987 nuclear arms control treaty, saying it would be forced to start a six-month process of withdrawal if nothing changes.&nbsp;

In response, Putin, in televised comments, accused the United States of blaming Russia for violations as a pretext for Washington to exit the pact. A tripolar world is in the offing or appears to have already crystallised as the 21st century meanders on. The nature of this sparring suggests that some kind or sort of a putative confrontation is welling up between the United States and Russia.&nbsp;

Whether or not, this particular spat denotes into something ungainly might be beside the point. But, what can be culled from it is that world politics is or actually has moved beyond the post-cold war “unipolarity”. We might be witnessing the emergence or even crystallisation of a tripolar international system. (Polarity is a term that denotes the number of “poles” or power centres in the international system).

The United States, Russia and China appear to be the main contenders and competitors in the emerging international politics and the international system. The tripolar world that is emerging is unlike the system structure of bipolarity that was the defining feature of world politics after World War 3. This time around then instead of the two poles, the former Soviet Union and the United States which, obiter dictum, accorded some degree of stability to the system, there are three poles.

But, this is not the whole “ story” or picture.

&nbsp;The interesting feature of the tripolar system is the different trajectories of the three contenders and the structural context. Consider China first. The country “emerged” after its historic 1978 reforms which entailed a comprehensive modernisation of its economy, opening up to the world, ensconcing the country in the sinews of globalisation but, at the same time, retaining its political system and ideology thereof. All this laid the basis of China’s military modernisation and putative Great Power status.

Russia, after the disintegration of the Soviet Union, has been on a revanchist course. It has employed hybrid techniques to what it thinks is reclaiming its erstwhile Great Power status. The country, akin to a judo player, is punching above its weight with great success.

The United States, albeit still a power to reckon with, having a lead in almost all indices of power is in relative decline. And, with an “insurgent” in the White House, in the form of Donald Trump, who is upending the rules, norms and regimes of the post war liberal order, the country thinks that by being pugnacious, it can rejig world politics and international relations to its advantage.

This is the structural context and nature of international relations in the second decade of the 21st century.

The question now is: how will tripolarity pan out? Will there be great power conflict and war? Or, can countervailing factors dampen and ameliorate this potential conflict?

As the spat between the United States and Russia suggests, there might accrue militarisation of foreign policies of major states. This means military build-ups, intense security dilemmas and arms races. The world then might be armed to the teeth, so to speak. That there would be tension is the axiomatic corollary that flows from militarisation of world politics. Various flashpoints in the world, the Middle East, the Koreas and even South Asia would then become more visible and significant in the foreign policies of the troika of Russia, the United States and China. (The site of jostling, jockeying and contention would also include the Indian Ocean Region(IoR).

All in all, the world will be a more tense and fraught place with the likelihood of a major military confrontation looking on the horizon. Will or can there be redemption? Perhaps.

But, this would lie in the return of vigorous and astute diplomacy. However, a more important countervailing force to intense and militarised conflict would be “complex interdependence”, that is, the thick flows and webs of crisscrossing commercial and capital flows that would enmesh countries in a paradigm, coming out or opting out of which would be to the detriment of each. &nbsp;As of now, however, it would appear that complex interdependence is waning or even dissipating. The challenge then for diplomacy and statecraft is to build and weave together this paradigm together, for peace within and without. The world and its people do not need a conflagration that is either an echo of 1914 or 1945, albeit in a permutation and combination that is far deadlier. Let sobriety, proportion and peace prevail!

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

&nbsp;

The United States has delivered Russia a 60-day ultimatum on Tuesday to come “clean” about what Washington says is a violation of the 1987 nuclear arms control treaty, saying it would be forced to start a six-month process of withdrawal if nothing changes.

The United States has delivered Russia a 60-day ultimatum on Tuesday to come “clean” about what Washington says is a violation of the 1987 nuclear arms control treaty, saying it would be forced to start a six-month process of withdrawal if nothing changes. In response, Putin, in televised comments, accused the United States of blaming Russia for violations as a pretext for Washington to exit the pact. A tripolar world is in the offing or appears to have already crystallised as the 21st century meanders on. The nature of this sparring suggests that some kind or sort of a putative confrontation is welling up between the United States and Russia. Whether or not, this particular spat denotes into something ungainly might be beside the point. But, what can be culled from it is that world politics is or actually has moved beyond the post-cold war “unipolarity”. We might be witnessing the emergence or even crystallisation of a tripolar international system. (Polarity is a term that denotes the number of “poles” or power centres in the international system). The United States, Russia and China appear to be the main contenders and competitors in the emerging international politics and the international system. The tripolar world that is emerging is unlike the system structure of bipolarity that was the defining feature of world politics after World War 3. This time around then instead of the two poles, the former Soviet Union and the United States which, obiter dictum, accorded some degree of stability to the system, there are three poles. But, this is not the whole “ story” or picture. The interesting feature of the tripolar system is the different trajectories of the three contenders and the structural context. Consider China first. The country “emerged” after its historic 1978 reforms which entailed a comprehensive modernisation of its economy, opening up to the world, ensconcing the country in the sinews of globalisation but, at the same time, retaining its political system and ideology thereof. All this laid the basis of China’s military modernisation and putative Great Power status. Russia, after the disintegration of the Soviet Union, has been on a revanchist course. It has employed hybrid techniques to what it thinks is reclaiming its erstwhile Great Power status. The country, akin to a judo player, is punching above its weight with great success. The United States, albeit still a power to reckon with, having a lead in almost all indices of power is in relative decline. And, with an “insurgent” in the White House, in the form of Donald Trump, who is upending the rules, norms and regimes of the post war liberal order, the country thinks that by being pugnacious, it can rejig world politics and international relations to its advantage. This is the structural context and nature of international relations in the second decade of the 21st century. The question now is: how will tripolarity pan out? Will there be great power conflict and war? Or, can countervailing factors dampen and ameliorate this potential conflict? As the spat between the United States and Russia suggests, there might accrue militarisation of foreign policies of major states. This means military build-ups, intense security dilemmas and arms races. The world then might be armed to the teeth, so to speak. That there would be tension is the axiomatic corollary that flows from militarisation of world politics. Various flashpoints in the world, the Middle East, the Koreas and even South Asia would then become more visible and significant in the foreign policies of the troika of Russia, the United States and China. (The site of jostling, jockeying and contention would also include the Indian Ocean Region(IoR). All in all, the world will be a more tense and fraught place with the likelihood of a major military confrontation looking on the horizon. Will or can there be redemption? Perhaps. But, this would lie in the return of vigorous and astute diplomacy. However, a more important countervailing force to intense and militarised conflict would be “complex interdependence”, that is, the thick flows and webs of crisscrossing commercial and capital flows that would enmesh countries in a paradigm, coming out or opting out of which would be to the detriment of each. As of now, however, it would appear that complex interdependence is waning or even dissipating. The challenge then for diplomacy and statecraft is to build and weave together this paradigm together, for peace within and without. The world and its people do not need a conflagration that is either an echo of 1914 or 1945, albeit in a permutation and combination that is far deadlier. Let sobriety, proportion and peace prevail! (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

A Tripolar world portends a new Cold War

The World Trade Organisation (WTO) has agreed to hear complaints from a range of countries over United States’ steel and aluminium tariffs, as well as complaints from Washington over retaliatory duties. The August trade body’s Dispute Settlement Body(DBS) will establish panels to review US President Donald Trump's decision to hit a long line of countries with tariffs of 25 per cent on steel and 10 per cent on aluminium. In more senses than one, this is unalloyed good news.&nbsp;

The reasons pertain to the very nature of the WTO, the international trade and economics architecture which accrued from long and painful deliberations and negotiations post the Second World War and the extent global governance architecture and their survival.

It may be pointed out here that Donald Trump in his schemata and diagnosis of what plagued America, has opted for a narrow mercantilism and the protectionism that it entails, to “make America great again(MAGA). This approach as axiomatically entailed a confrontational stance not only with countries as diverse as China, Mexico, Canada and the European Union but also constitutes an assault on the intergovernmental and global governance architecture in place. 
&nbsp; 
The WTO, whose precursor was the General Agreement on Trade and Tariffs (GATT), has been a positive enabler of and for global trade, so much so that after the inception of the GATT and the then WTO world trade demonstrated a stupendous increase, even more than world output.&nbsp;

While economists continue to debate, contend and even quibble over the contribution of freer trade to economic growth and development, it has been empirically demonstrated that over the past six decades or so, there has been an unprecedented decline in global poverty rates. This decline has been attributed to the freeing of trade in goods and, to an extent, services. The WTO and its precursor have been central to these sanguine developments. However, there has also been a corresponding increase in inequality in many countries, especially in the Western world, including the United States. The reasons accrue not merely from the nature of trade and trade opening but the political economy and inadequate policy grids to deal with freer trade and its immediate consequences.

The WTO not only brought freed trade but also brought countries closer and enmeshed these into a complex interdependence paradigm which has been held to be an antidote to political conflicts and even war. But, enter Trump, and his version of trade and trade policy, there has been a veritable assault not only on international relations and world order in place after the Second Great War but also on intergovernmental organizations like the WTO. If Trump succeeds in decimating this order, world politics and economics will devolve into a zero-sum game where states and nations will seek to take advantage over other states, among other things. This zero-sum competition will have spillover political consequences with global and local conflicts looming on the horizon.&nbsp;

The corollary effect would also be felt on globalisation (which has already been impeded) and will be supplanted by deglobalisation. Added up, the world will be actually poorer, in the expansive sense and definition of the term. Even the United States will not be immune to negative structural winds from deglobalisation and shrinkage of world trade. While there might be immediate “windfalls” to reap, in the long term, the country will also be stung. 
&nbsp; 
With no one to turn to for dispute resolution, the zero-sum conflict between constituent states of the international system, would not merely fracture the international trading system but also its apex bodies like the WTO, leading to anarchy in the economic, trade and financial domains.&nbsp;

However, now with the putative activism of the WTO’s &nbsp;Dispute Settlement Body (DSB), there are reasons for hope. The world trade architecture might be salvaged and its institutions might occupy “pride of place” over visceral and reflexive mercantilism and protectionism. In the ultimate analysis, as history demonstrates, trade cannot entirely be the solvent of political conflicts but it can, to a large extent, dissipate these. The Japanese trading state might serve as a classic example of trade and trade policy ameliorating the worst instincts of a given nation. 
 
Alarmingly, if the WTO does not step up or is actually ignored, the zero-sum economic competition could take an uglier form and shape, with political divisions and conflicts supplanting these. Saving the WTO and making it central to trade and its concomitants is then not only an economic imperative but also a political and a moral one.

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) 
&nbsp;

The World Trade Organisation (WTO) has agreed to hear complaints from a range of countries over United States’ steel and aluminium tariffs, as well as complaints from Washington over retaliatory duties.

The World Trade Organisation (WTO) has agreed to hear complaints from a range of countries over United States’ steel and aluminium tariffs, as well as complaints from Washington over retaliatory duties. The August trade body’s Dispute Settlement Body(DBS) will establish panels to review US President Donald Trump's decision to hit a long line of countries with tariffs of 25 per cent on steel and 10 per cent on aluminium. In more senses than one, this is unalloyed good news. The reasons pertain to the very nature of the WTO, the international trade and economics architecture which accrued from long and painful deliberations and negotiations post the Second World War and the extent global governance architecture and their survival. It may be pointed out here that Donald Trump in his schemata and diagnosis of what plagued America, has opted for a narrow mercantilism and the protectionism that it entails, to “make America great again(MAGA). This approach as axiomatically entailed a confrontational stance not only with countries as diverse as China, Mexico, Canada and the European Union but also constitutes an assault on the intergovernmental and global governance architecture in place. The WTO, whose precursor was the General Agreement on Trade and Tariffs (GATT), has been a positive enabler of and for global trade, so much so that after the inception of the GATT and the then WTO world trade demonstrated a stupendous increase, even more than world output. While economists continue to debate, contend and even quibble over the contribution of freer trade to economic growth and development, it has been empirically demonstrated that over the past six decades or so, there has been an unprecedented decline in global poverty rates. This decline has been attributed to the freeing of trade in goods and, to an extent, services. The WTO and its precursor have been central to these sanguine developments. However, there has also been a corresponding increase in inequality in many countries, especially in the Western world, including the United States. The reasons accrue not merely from the nature of trade and trade opening but the political economy and inadequate policy grids to deal with freer trade and its immediate consequences. The WTO not only brought freed trade but also brought countries closer and enmeshed these into a complex interdependence paradigm which has been held to be an antidote to political conflicts and even war. But, enter Trump, and his version of trade and trade policy, there has been a veritable assault not only on international relations and world order in place after the Second Great War but also on intergovernmental organizations like the WTO. If Trump succeeds in decimating this order, world politics and economics will devolve into a zero-sum game where states and nations will seek to take advantage over other states, among other things. This zero-sum competition will have spillover political consequences with global and local conflicts looming on the horizon. The corollary effect would also be felt on globalisation (which has already been impeded) and will be supplanted by deglobalisation. Added up, the world will be actually poorer, in the expansive sense and definition of the term. Even the United States will not be immune to negative structural winds from deglobalisation and shrinkage of world trade. While there might be immediate “windfalls” to reap, in the long term, the country will also be stung. With no one to turn to for dispute resolution, the zero-sum conflict between constituent states of the international system, would not merely fracture the international trading system but also its apex bodies like the WTO, leading to anarchy in the economic, trade and financial domains. However, now with the putative activism of the WTO’s Dispute Settlement Body (DSB), there are reasons for hope. The world trade architecture might be salvaged and its institutions might occupy “pride of place” over visceral and reflexive mercantilism and protectionism. In the ultimate analysis, as history demonstrates, trade cannot entirely be the solvent of political conflicts but it can, to a large extent, dissipate these. The Japanese trading state might serve as a classic example of trade and trade policy ameliorating the worst instincts of a given nation. Alarmingly, if the WTO does not step up or is actually ignored, the zero-sum economic competition could take an uglier form and shape, with political divisions and conflicts supplanting these. Saving the WTO and making it central to trade and its concomitants is then not only an economic imperative but also a political and a moral one. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Trade conflict: World Trade Organisation's primacy must be restored

American lawmakers recently created the International Development Finance Corporation (IDFC) to finance infrastructure projects in low-income countries. The IDFC’s primary aim is to counter China’s growing influence, and it signals a dramatic new chapter in the fragile relationship between the US and China.

Tensions between the two countries have been high, as they struggle over trade, intellectual property rights and military control of the South China Sea. They are now also racing to connect the world by financing large-scale infrastructure projects such as highways, railways and ports.

The IDFC enjoyed bipartisan support and was rushed through Congress as a matter of urgency. It was initially part of the BUILD Act, which was passed by the House of Representatives. The Senate then incorporated it into the FAA Reauthorization Act and passed it by a margin of 93-6 (with one abstention). The US president, Donald Trump, signed the IDFC into law while Capitol Hill was gripped by the bitter feud over the confirmation of Brett Kavanaugh to the Supreme Court.

The 2008 financial crisis destabilised the so-called Chimerica order of the global economy, which balanced China’s export-led growth with a period of overconsumption in the US. Following the financial crisis, the Chinese government countered slackening demand from the US by financing infrastructure projects in low-income countries.

And so over the past decade, China has quietly become a leader in the construction sector and, according to some commentators, is poised to establish a global monopoly. Indeed, its signature Belt and Road Initiative (BRI) aims to integrate Asia, Africa and Europe via large-scale infrastructure projects. The World Bank has even suggested that the BRI may constitute “a new approach” to development.

Infrastructure-led connectivity 
 
The BRI is consistent with a global trend to enhance infrastructure-led connectivity. This prioritises long-distance and cross-border connections and infrastructure to link resource extraction, agribusiness and manufacturing with global markets and supply chains.

In addition to the BRI, examples from low and middle-income countries include the Greater Mekong Subregion in South-East Asia, and the Lamu Port, South Sudan, Ethiopia Transport Corridor (LAPSSET), in East Africa. While enhanced connectivity can indeed foster economic growth, it can also have harmful consequences, such as in South America where the extension of infrastructure networks in remote areas has caused rapid environmental degradation.

Nevertheless, from a realpolitik perspective, whichever country funds connective infrastructure initiatives can benefit by determining how territories are integrated into the global economy. Control of overseas ports, airports, railways and roadways can enable a country to align parts of the global economy with their own.

This explains why the race to connect the world is not limited to the US and China. The European Union has launched an initiative to invest in infrastructure that enhances its connectivity with Asia. Similarly, Japan, Australia, the UK and others in the G20 are active in the Global Infrastructure Hub, which was created to encourage private investment in connective infrastructure around the world.

The US strikes back 
 
The American IDFC differs from the EU and G20 initiatives because it signals that US policymakers intend to contain rather than compete with China. It has been granted an initial budget of $60 billion to invest in infrastructure projects in low-income countries, and this is designed to “provide countries with a robust alternative to state-directed investments by authoritarian governments”.

So how does it work? The IDFC is loosely modelled on the Chinese approach to infrastructure finance. Chinese development assistance is typically bilateral and prioritises long-term political objectives over profit. This explains why China funds infrastructure projects that institutional investors in the OECD deem too risky. The US is now taking on China by allowing the IDFC to operate in a similar fashion. Unencumbered by shareholder demands, the IDFC’s mandate is “to complement and be guided by overall United States foreign policy, development, and national security objectives”. In other words, it is meant to put politics before profit.

The question is whether this strategy really will contain China’s expanding sphere of influence.

Certainly, the IDFC needs a significantly larger budget to threaten China’s growing influence. After all, China finances multiple infrastructure projects beyond the BRI. In a recent summit with African leaders in Beijing, for example, Xi Jinping committed to invest $60 billion in the continent, independent of the BRI. Furthermore, China is the largest shareholder in the Asian Infrastructure Investment Bank and enjoys influence in the New Development Bank – both of which also pursue objectives consistent with the BRI. Multilateral investment banks such as the World Bank have also already invested in infrastructure projects that complement the BRI.

Making growth sustainable and inclusive 
 
Ultimately, then, the IDFC will be unable to limit China’s growing influence with a mere $60 billion, and China’s sphere of influence will continue to expand regardless.

But the race to connect the world is significant because it will have tremendous impacts on emerging economies that suffer from inadequate infrastructure. Indeed, this scramble between the US and China will likely accelerate economic integration in places that have historically been isolated.

Both countries prioritise geopolitical objectives over developmental outcomes, so the challenge for recipient countries is to ensure such funding and initiatives foster sustainable, inclusive growth.

Chinese investment is required by Beijing to comply with local social and environmental laws, yet many low-income countries lack strong regulations. The IDFC, meanwhile, is required to “annually evaluate and report to the Board and Congress regarding compliance with environmental, social, labor, human rights, and transparency standards”. But it is unclear what standards the IDFC will embrace in any of these fields.

The quickening race between China and the US to connect the world does present opportunities for low-income countries held back by poor infrastructure. The question is whether the “beneficiaries” can ensure that the projects are sustainable and equitable in the long-run. If they can’t, much of the infrastructure will likely just further line American and Chinese pockets.

(Seth Schindler is Senior Lecturer in Urban Development &amp; Transformation, University of Manchester; &nbsp;Juan Miguel Kanai is Lecturer in Human Geography, University of Sheffield)

(This article was originally published on DNA. Read the <a href="https://theconversation.com/us-sparks-new-development-race-with-china-but-can-it-win-105203">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) 
&nbsp;

American lawmakers recently created the International Development Finance Corporation (IDFC) to finance infrastructure projects in low-income countries. The IDFC’s primary aim is to counter China’s growing influence, and it signals a dramatic new chapter in the fragile relationship between the US and China.

American lawmakers recently created the International Development Finance Corporation (IDFC) to finance infrastructure projects in low-income countries. The IDFC’s primary aim is to counter China’s growing influence, and it signals a dramatic new chapter in the fragile relationship between the US and China. Tensions between the two countries have been high, as they struggle over trade, intellectual property rights and military control of the South China Sea. They are now also racing to connect the world by financing large-scale infrastructure projects such as highways, railways and ports. The IDFC enjoyed bipartisan support and was rushed through Congress as a matter of urgency. It was initially part of the BUILD Act, which was passed by the House of Representatives. The Senate then incorporated it into the FAA Reauthorization Act and passed it by a margin of 93-6 (with one abstention). The US president, Donald Trump, signed the IDFC into law while Capitol Hill was gripped by the bitter feud over the confirmation of Brett Kavanaugh to the Supreme Court. The 2008 financial crisis destabilised the so-called Chimerica order of the global economy, which balanced China’s export-led growth with a period of overconsumption in the US. Following the financial crisis, the Chinese government countered slackening demand from the US by financing infrastructure projects in low-income countries. And so over the past decade, China has quietly become a leader in the construction sector and, according to some commentators, is poised to establish a global monopoly. Indeed, its signature Belt and Road Initiative (BRI) aims to integrate Asia, Africa and Europe via large-scale infrastructure projects. The World Bank has even suggested that the BRI may constitute “a new approach” to development. Infrastructure-led connectivity The BRI is consistent with a global trend to enhance infrastructure-led connectivity. This prioritises long-distance and cross-border connections and infrastructure to link resource extraction, agribusiness and manufacturing with global markets and supply chains. In addition to the BRI, examples from low and middle-income countries include the Greater Mekong Subregion in South-East Asia, and the Lamu Port, South Sudan, Ethiopia Transport Corridor (LAPSSET), in East Africa. While enhanced connectivity can indeed foster economic growth, it can also have harmful consequences, such as in South America where the extension of infrastructure networks in remote areas has caused rapid environmental degradation. Nevertheless, from a realpolitik perspective, whichever country funds connective infrastructure initiatives can benefit by determining how territories are integrated into the global economy. Control of overseas ports, airports, railways and roadways can enable a country to align parts of the global economy with their own. This explains why the race to connect the world is not limited to the US and China. The European Union has launched an initiative to invest in infrastructure that enhances its connectivity with Asia. Similarly, Japan, Australia, the UK and others in the G20 are active in the Global Infrastructure Hub, which was created to encourage private investment in connective infrastructure around the world. The US strikes back The American IDFC differs from the EU and G20 initiatives because it signals that US policymakers intend to contain rather than compete with China. It has been granted an initial budget of $60 billion to invest in infrastructure projects in low-income countries, and this is designed to “provide countries with a robust alternative to state-directed investments by authoritarian governments”. So how does it work? The IDFC is loosely modelled on the Chinese approach to infrastructure finance. Chinese development assistance is typically bilateral and prioritises long-term political objectives over profit. This explains why China funds infrastructure projects that institutional investors in the OECD deem too risky. The US is now taking on China by allowing the IDFC to operate in a similar fashion. Unencumbered by shareholder demands, the IDFC’s mandate is “to complement and be guided by overall United States foreign policy, development, and national security objectives”. In other words, it is meant to put politics before profit. The question is whether this strategy really will contain China’s expanding sphere of influence. Certainly, the IDFC needs a significantly larger budget to threaten China’s growing influence. After all, China finances multiple infrastructure projects beyond the BRI. In a recent summit with African leaders in Beijing, for example, Xi Jinping committed to invest $60 billion in the continent, independent of the BRI. Furthermore, China is the largest shareholder in the Asian Infrastructure Investment Bank and enjoys influence in the New Development Bank – both of which also pursue objectives consistent with the BRI. Multilateral investment banks such as the World Bank have also already invested in infrastructure projects that complement the BRI. Making growth sustainable and inclusive Ultimately, then, the IDFC will be unable to limit China’s growing influence with a mere $60 billion, and China’s sphere of influence will continue to expand regardless. But the race to connect the world is significant because it will have tremendous impacts on emerging economies that suffer from inadequate infrastructure. Indeed, this scramble between the US and China will likely accelerate economic integration in places that have historically been isolated. Both countries prioritise geopolitical objectives over developmental outcomes, so the challenge for recipient countries is to ensure such funding and initiatives foster sustainable, inclusive growth. Chinese investment is required by Beijing to comply with local social and environmental laws, yet many low-income countries lack strong regulations. The IDFC, meanwhile, is required to “annually evaluate and report to the Board and Congress regarding compliance with environmental, social, labor, human rights, and transparency standards”. But it is unclear what standards the IDFC will embrace in any of these fields. The quickening race between China and the US to connect the world does present opportunities for low-income countries held back by poor infrastructure. The question is whether the “beneficiaries” can ensure that the projects are sustainable and equitable in the long-run. If they can’t, much of the infrastructure will likely just further line American and Chinese pockets. (Seth Schindler is Senior Lecturer in Urban Development & Transformation, University of Manchester; Juan Miguel Kanai is Lecturer in Human Geography, University of Sheffield) (This article was originally published on DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

US sparks new development race with China – but can it win?

<a href="http://www.wionews.com/business-economy/full-blown-us-china-trade-war-will-slow-global-growth-by-less-than-1-imf-170313">Full-blown US-China trade war will slow global growth by less than 1%: IMF</a>

An all-out trade war would slow the growth of the global economy, but not stop its expansion, with the United States and China also escaping a recession, according to forecasts published Tuesday by the International Monetary Fund.

In its latest World Economic Outlook report, the IMF conducted a series of calculations of the impact from the trade tariffs that the administration of US President Donald Trump has already implemented and has threatened to impose, as well as reprisals from China and other nations.

Yet, even in its worst-case scenario, the IMF found that the disruption won't kill off growth and drag the global economy into recession.

 
<a href="http://www.wionews.com/business-economy/alphabet-to-shut-google-social-site-after-user-data-exposed-170306">Google+ to shut down after data of at least 500,000 users exposed</a>

Alphabet Inc's Google will shut down the consumer version of its failed social network Google+ and tighten its data sharing policies after announcing on Monday that private profile data of at least 500,000 users may have been exposed to hundreds of external developers.

The issue was discovered and patched in March as part of a review of how Google shares data with other applications, Google said in a blog post. No developer exploited the vulnerability or misused data, the review found.

 
<a href="http://www.wionews.com/world/kavanaugh-seeks-new-tone-after-supreme-court-fight-trump-apologises-for-process-170304">Trump apologises to Kavanaugh, says he is innocent of sexual assault charges</a>

US Supreme Court Justice Brett Kavanaugh sought to put a bruising confirmation battle behind him on Monday at a White House ceremony in which President Donald Trump declared him innocent of sexual misconduct and apologised for the heated process.

"On behalf of our nation, I want to apologise to Brett and the entire Kavanaugh family for the terrible pain and suffering you have been forced to endure," Trump said at the start of a ceremonial swearing-in in the East Room of the White House.

"Those who step forward to serve our country deserve a fair and dignified evaluation, not a campaign of political and personal destruction based on lies and deception," he said.

 
<a href="http://www.wionews.com/sports/jeremy-lalrinnunga-claims-indias-first-youth-olympics-gold-170318">Jeremy Lalrinnunga wins India's first Youth Olympics gold</a>

Weightlifter Jeremy Lalrinnunga notched up India's maiden gold medal at the Youth Olympics, claiming the top honours in the men's 62 kg category here.&nbsp;

The 15-year-old from Aizwal, who is also a world youth silver-medallist, lifted a total of 274 kg (124 kg +150 kg) to finish on top in the Argentine capital on Monday night.

 
<a href="http://www.wionews.com/world/trump-says-he-likes-taylor-swifts-music-about-25-less-after-she-endorses-democrats-170321">Trump says he likes Taylor Swift's music 'about 25% less' after she endorses Democrats</a>

US President Donald Trump has said he likes Taylor Swift's music "about 25 per cent less" after the pop superstar endorsed the Democrats running for office in Tennessee in the upcoming US midterm elections.&nbsp;Tennessee is Swift's home state.&nbsp;

Swift backed Phil Bredesen and Jim Cooper, who are running for the Senate and the House of Representatives. She also launched a fierce attack on Bredesen's opponent, the Republican Marsha Blackburn, who currently serves in the House.

Swift made her comments on Sunday on Instagram.&nbsp;

Full-blown US-China trade war will slow global growth by less than 1%: IMF An all-out trade war would slow the growth of the global economy, but not stop its expansion, with the United States and China also escaping a recession, according to forecasts published Tuesday by the International Monetary Fund.

Full-blown US-China trade war will slow global growth by less than 1%: IMF An all-out trade war would slow the growth of the global economy, but not stop its expansion, with the United States and China also escaping a recession, according to forecasts published Tuesday by the International Monetary Fund. In its latest World Economic Outlook report, the IMF conducted a series of calculations of the impact from the trade tariffs that the administration of US President Donald Trump has already implemented and has threatened to impose, as well as reprisals from China and other nations. Yet, even in its worst-case scenario, the IMF found that the disruption won't kill off growth and drag the global economy into recession. Google+ to shut down after data of at least 500,000 users exposed Alphabet Inc's Google will shut down the consumer version of its failed social network Google+ and tighten its data sharing policies after announcing on Monday that private profile data of at least 500,000 users may have been exposed to hundreds of external developers. The issue was discovered and patched in March as part of a review of how Google shares data with other applications, Google said in a blog post. No developer exploited the vulnerability or misused data, the review found. Trump apologises to Kavanaugh, says he is innocent of sexual assault charges US Supreme Court Justice Brett Kavanaugh sought to put a bruising confirmation battle behind him on Monday at a White House ceremony in which President Donald Trump declared him innocent of sexual misconduct and apologised for the heated process. "On behalf of our nation, I want to apologise to Brett and the entire Kavanaugh family for the terrible pain and suffering you have been forced to endure," Trump said at the start of a ceremonial swearing-in in the East Room of the White House. "Those who step forward to serve our country deserve a fair and dignified evaluation, not a campaign of political and personal destruction based on lies and deception," he said. Jeremy Lalrinnunga wins India's first Youth Olympics gold Weightlifter Jeremy Lalrinnunga notched up India's maiden gold medal at the Youth Olympics, claiming the top honours in the men's 62 kg category here. The 15-year-old from Aizwal, who is also a world youth silver-medallist, lifted a total of 274 kg (124 kg +150 kg) to finish on top in the Argentine capital on Monday night. Trump says he likes Taylor Swift's music 'about 25% less' after she endorses Democrats US President Donald Trump has said he likes Taylor Swift's music "about 25 per cent less" after the pop superstar endorsed the Democrats running for office in Tennessee in the upcoming US midterm elections. Tennessee is Swift's home state. Swift backed Phil Bredesen and Jim Cooper, who are running for the Senate and the House of Representatives. She also launched a fierce attack on Bredesen's opponent, the Republican Marsha Blackburn, who currently serves in the House. Swift made her comments on Sunday on Instagram.

News brief: Big stories of the day

President Trump while unveiling the United States-Mexico-Canada Agreement (USMCA), said that India wants to open trade talks with the US immediately.

<a href="http://www.wionews.com/india-news/trump-looks-forward-visit-india-us-official-168366">Also Read:&nbsp;Trump looks forward to </a><a href="http://www.wionews.com/india-news/trump-looks-forward-visit-india-us-official-168366">visit</a><a href="http://www.wionews.com/india-news/trump-looks-forward-visit-india-us-official-168366"> India, says US official</a>

Calling India a&nbsp;"tariff king", Trump said: "India called us and they say, we want to start negotiations immediately."&nbsp;

On Saturday, Trump had said India does not want him to impose tariffs on Indian products reaching American shores. The US president had accused India of imposing 100 per cent tariffs on US&nbsp;products.

The president had earlier said that India enjoyed a competitive advantage over&nbsp;the US, asserting,"Take India. You talk about free trade. So, let's say they (Indians) charge us 60 per cent tariff on a product. And for the same product when they send it in (America), we charge them nothing. So now I want to charge them 25 per cent or 20 or 10 or something."

Trump had earlier slammed India for reported high import tariff on Harley-Davidson motorcycles calling it “unfair” even though India had cut import duty by upto 50 per cent.

Addressing a rally on Saturday, the president said he can give an example of other countries which are "brutal" at what they do to the United States. "I could give you (examples of) others that are brutal, just brutal what they do to us, how they take advantage of the stupidity. We never even had people negotiate, they just do whatever they want," the president told the rally.

The United States is India's biggest trading partner with two-way trade pegged at over $100 billion a year. India had earlier imposed retaliatory tariff on 29 US products worth $235 million after the US decided to impose import duties on Indian steel and aluminium.

The US is already engaged in an escalating trade war with China with both sides imposing tit-for-tat tariffs worth over $60 billion.

President Trump while unveiling the United States-Mexico-Canada Agreement (USMCA), said that India wants to open trade talks with the US immediately. Also Read: Trump looks forward to visit India, says US official Calling India a "tariff king", Trump said: "India called us and they say, we want to start negotiations immediately.

President Trump while unveiling the United States-Mexico-Canada Agreement (USMCA), said that India wants to open trade talks with the US immediately. Also Read: Trump looks forward to visit India, says US official Calling India a "tariff king", Trump said: "India called us and they say, we want to start negotiations immediately." On Saturday, Trump had said India does not want him to impose tariffs on Indian products reaching American shores. The US president had accused India of imposing 100 per cent tariffs on US products. The president had earlier said that India enjoyed a competitive advantage over the US, asserting,"Take India. You talk about free trade. So, let's say they (Indians) charge us 60 per cent tariff on a product. And for the same product when they send it in (America), we charge them nothing. So now I want to charge them 25 per cent or 20 or 10 or something." Trump had earlier slammed India for reported high import tariff on Harley-Davidson motorcycles calling it “unfair” even though India had cut import duty by upto 50 per cent. Addressing a rally on Saturday, the president said he can give an example of other countries which are "brutal" at what they do to the United States. "I could give you (examples of) others that are brutal, just brutal what they do to us, how they take advantage of the stupidity. We never even had people negotiate, they just do whatever they want," the president told the rally. The United States is India's biggest trading partner with two-way trade pegged at over $100 billion a year. India had earlier imposed retaliatory tariff on 29 US products worth $235 million after the US decided to impose import duties on Indian steel and aluminium. The US is already engaged in an escalating trade war with China with both sides imposing tit-for-tat tariffs worth over $60 billion.

Tariff king India wants trade talks with US immediately, says Trump

China will import $8 billion of goods and attract $600 billion of foreign investment in the next five years, foreign minister Wang Yi said on Friday.

China's overseas investment will reach $750 billion in the next five years, the foreign ministry said in a statement on its website, citing Wang at a conference in Vietnam.

Wang said China would widen market access and open up its financial sector.

The practices of unilateralism and protectionism would be a form of regression, and not only would they lead to a dead end, they would damage one's own interests, he said.

Wang said China would widen market access and open up its financial sector.

China will import $8 billion of goods and attract $600 billion of foreign investment in the next five years, foreign minister Wang Yi said on Friday. China's overseas investment will reach $750 billion in the next five years, the foreign ministry said in a statement on its website, citing Wang at a conference in Vietnam. Wang said China would widen market access and open up its financial sector. The practices of unilateralism and protectionism would be a form of regression, and not only would they lead to a dead end, they would damage one's own interests, he said.

China to import goods worth $8 billion in next five years: Foreign minister Wang Yi

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