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China says they are in full swing with the US on a trade deal

Comments by China’s commerce ministry

US China
  • Liu He, Lighthizer, Mnuchin to hold trade talks later today
  • They will be having a working dinner later today
  • US delegation set to arrive in the afternoon
  • Reiterates that Liu He will go to Washington next week
  • Both sides have achieved progress in phone calls, but there remains much work to do
While plenty of focus remains on what’s happening in bonds and Brexit, US-China trade talks will be resuming today and tomorrow before continuing again next week. Let’s see if they can make any further progress this time around. But once again, I wouldn’t be holding my breath counting on that to happen. We’ve been down this road one too many times.

China industrial profits biggest fall since 2011

  • (combined figures for January and February to smooth out distortions caused by the week-long China’s Lunar New Year)
If you think the result is terrible, you are right.
Reuters report that its the worst contraction since October 2011 in the first two months of this year
  • drag was mainly due to price contractions in key industrial sectors such as auto, oil processing, steel and chemical industries Zhu Hong of the statistics bureau said in a statement accompanying the data
Meanwhile the post-RBNZ slump in AUD and NZD continues, extends:
The data from Chia is here: China data: Jan -Feb Industrial profits -14% y/y

Macron, Merkel and Juncker urge China to open up domestic markets

France, Germany and the European Commission pushed Chinese president Xi Jinping to open his country’s protected domestic market to foreign business, with German Chancellor Angela Merkel insisting on “a certain amount of reciprocity” from Beijing to seal a future EU-China investment agreement.

French President Emmanuel Macron invited Ms Merkel and Jean-Claude Juncker, head of the European Commission, to join him at the end of a bilateral summit with Mr Xi in Paris, in an attempt to underscore EU unity and Europe’s role as a commercial superpower on a par with the US and China.

Mr Macron said Europe’s openness had aided the spectacular transformation of the Chinese economy and helped lift 700m people out of poverty but also generated “deep tensions which lead to the need for legitimate protection” — an apparent reference to recent restrictions placed by some EU member states on Chinese acquisitions of high-tech companies.

Mr Macron and other EU states have complained in particular about the near-impossibility of foreign companies winning public procurement contracts in China, for example in railways or other transport infrastructure.

In his public statement, Mr Xi made no specific commitments on reciprocity, but said China would “continue to push forward with reform and opening up because China has been pursuing reform and opening up for the past four decades” in its high-speed modernisation and industrialisation since the 1970s.

The Chinese leader also issued a warning against mutual distrust in the China-EU relationship.

“We cannot let natural suspicion get the better of us,” he said. “We cannot always be guarded against each other and worry that they may do something behind our backs.”

Chinese premier Li says China able to resist downwards pressure on economy

Chinese premier Li Keqiang is speaking on state television

He might sound like a broken recorder but when it comes to comments like these, it’s always best to be aware about the frequency and timing of them. The fact that Chinese authorities have been constantly out on the wires delivering this message every couple of days is to remind market participants that they are present and willing to step in to support the economy if need be, especially in times of doubt like what we’re seeing in markets now.
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