Archives of “International relations” tag

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China says it has no interest in meddling with US election, issues warning to Microsoft

  
  Analysis
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Comments by the Chinese foreign ministry

  • Denies any meddling in US election
  • Warns Microsoft not to ‘make things up out of nothing’
This comes after Microsoft reported that they found hackers targeting the US election here, pointing out that:
  • Strontium, operating from Russia, has attacked more than 200 organizations including political campaigns, advocacy groups, parties and political consultants
  • Zirconium, operating from China, has attacked high-profile individuals associated with the election, including people associated with the Joe Biden for President campaign and prominent leaders in the international affairs community
  • Phosphorus, operating from Iran, has continued to attack the personal accounts of people associated with the Donald J. Trump for President campaign

But majority of these attacks had not been successful, according to Microsoft, adding that no attacks were launched on groups handling the voting systems themselves.

If Australia joins the US in a new cold war against China it will “pay an unbearable price “

  
Analysis, Politics
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China’s Global Times says Australia’s economy “cannot withstand” a cold war with China

Its an opinion piece in the outspoken GT and comes in response to US Republican Senator Rick Scott urging Australia to join the US in a new “Cold War” against China.
Here is the link, there is plenty more of this sort of thing here:
  • Canberra should be mindful of avoiding inappropriate statements from its officials or politicians that may echo what Scott urged. 
  • Due to escalating tensions between the two countries on multiple fronts – such as the Hong Kong affair, a US-led inquiry into the origin of the coronavirus origins, and a travel and study warning – China-Australia relations have been rapidly sliding to near freezing point. 
  • A new Cold War may only further jeopardize the already fragile relations between the two sides.
I wouldn’t think this sort of sentiment is a positive for AUD, yeah? Here is the link to the GT article
China's Global Times says Australia's economy "cannot withstand" a cold war with China 

On the horizon next week – vote in US Congress to sanction China officials over human rights abuse

  
  Analysis
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The US House (lower house of the Congress) plans to vote next week on moves to impose sanctions on Chinese officials over human rights abuses against Muslim minorities

  • the bill was approved by the Senate on May 14
This is in relation to the internment of more than 1 million Uighurs and members of other Muslim minority groups in the Xinjiang region of China
This is another indication of rising US/China strains. As these increase they tend to be a negative input for financial market risk assets (and FX) and supportive of safe haven alternatives. Add it the growing list, recent examples:
  • China will not back down from “US quickening technology war mongering” – warn of “ample countermeasures”
  • US to add 33 Chinese firms, institutions to an economic blacklist – accusation of helping China spy, links to WMDs
  • US accuses China government of blocking US airlines flying to China
  • US administration is suspicious of China nuclear weapon tests – may do so too

And, of course:

  • coronavirus origin and spread
  • trade
  • tension over new rules from Beijing to be imposed on Hong Kong
  • Taiwan

China confirms 80% tariff on Australian barley

  
  Analysis
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The news that China was to impose an import tariff on Australian barley broke back on May 10

The tariff imposition has been announced in a statement from China’s Ministry of Commerce
  • anti-dumping tariff would be 73.6 per cent
  • while the anti-subsidy tariff would be 6.9 per cent
  • will remain in place for five years
This from China is in retaliation for Australia leading calls for an investigation into the origin and spread of COVID-19. China also halted imports of Australian beef last week as part of their response.
 The news that China was to impose an import tariff on Australian barley broke back on May 10 

German parliament backs EU750B crisis spending package

  
Analysis, Economy
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That’s a big number

Germany’s parliament approved aid for smaller firms and the self-employed. It includes a 156B euro supplementary budget.
That’s a huge number. Germany’s GDP is one-fifth of the US which just unveiled an enormous $2 trillion package. In relative terms, this is much bigger. That said, the details matter. Parts of both programs are loan guarantees and those don’t necessarily cost anything because they will be paid back.

11 Wuhan residents traveling back from abroad were found infected with the coronavirus

  
  Analysis
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The Global Times conveying the report citing China customs

  • 11 Wuhan residents traveling back from abroad were found infected with the novel coronavirus as of 6 am Tuesday
Well, that’d suck.
So, its probably reasonable to say that some of these folks (likely all of them) headed away from Wuhan while inflected but not showing any symptoms, and by the time they returned began to show symptoms (fever, for example).
Its probably also reasonable to think they have infected others while away.

IMF: Growth is worse but at least uncertainty is lower

  
Analysis, Economy
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IMF lowers 2019 global growth estimate for the sixth straight quarter

IMF lowers 2019 global growth estimate for the sixth straight quarter
2019 is over but the outlook for growth keeps getting worse. The IMF lowered its 2019 global growth forecast to 2.9% from 3.0% in October. It was the sixth consecutive cut to the 2019 outlook.
The 2021 forecast was also lowered to 3.4% from 3.6%.
On the upside, the IMF maintained its 2020 GDP forecast at 3.3% and said that economic uncertainty is diminished with risks “less skewed” toward negative outcomes, albeit still tilted to the downside.
The big loser in this round of forecasts was India with the 2020 forecast cut to 5.8% from 7.0% on declining credit growth.
Other highlights:
  • 2020 Eurozone GDP seen at 1.3% vs 1.4% in Oct due to manufacturing contraction in Germany
  • Boosts China 2020 GDP to 6.0% from 5.8% on trade deal
  • Cuts 2020 US GDP to 2.0% from 2.1%
  • UK forecast unchanged at 1.4%
For me, these forecasts don’t have much value on their own (as you can see from the frequent revisions) but they are a valuable way to visualize and interpret the evolving growth picture.

US Treas Sec Mnuchin says tariffs on China to remain in place until phase 2

  
  Analysis
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US Treasury Secretary Mnuchin

  • says tariffs will stay in place until there’s a phase 2 of china trade agreement
  • says Trump may consider removing tariffs under phase 2
  • says China has made strong commitments it will not manipulate currency

US Treasury Secretary Mnuchin 

China has agreed to buy USD50bn in ag products in 2020 (sources)

  
  Analysis
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China trade news following this earlier:

  • China, US have agreed to some tariff reductions and a delay on tariffs set to go into effect on December 15
  • China has agreed to make $50 billion in agricultural purchases in 2020
Headlines via Reuters, the wire citing a source familiar with the situation.
So yeah, as expected the trade ‘deal’ is pretty much a nothingburger except for China buying a few soybeans and what have you (that they need anyway).  As tipped miany, many times over past months.

Global stock market rally has further to run in 2020 – Reuters poll

  
Analysis, Global Indices
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But much depends on the US-China trade war still

Poll

The bias has turned more favourable in the most recent poll with a slim majority of respondents (53/102) viewing that risks to the outlook are now skewed more to the upside.

In comparison, just three months ago, a clear majority of respondents (69/97) viewed that risks to the outlook were skewed more to the downside instead.
A lot of this of course owes to the more optimistic US-China trade rhetoric, as both countries look to move closer towards a trade truce by the end of this year.
Among those who answered an additional question in the poll, 50 respondents said the bull run in the stock market will end within a year with 40 respondents saying that it would within the next two years.
That shows that sentiment is leaning more towards the bull run still going strong although I reckon its strength may not be as what we are seeing this year.
I mean with stretched valuations, flagging global growth and more political uncertainty i.e. US elections all at play next year, the S&P 500 may find it tough to post another 25% year like this one and so will its peers.
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