All the day’s economic and financial news, as Chinese leader calls for Asian states to unite against US protectionist trade policies
- Xi: Protectionism is rearing its head
- Latest: Chinese stock market hits lowest since Jan 2016
- Asian leaders are meeting in Vladivostok
- China wants closer ties with Russia
- Lagarde fears trade war will cause emerging market turmoil
China and Russia’s concerns about protectionism may be well-merited, but neither country has a clean slate on the issue.
China has long been criticised for protecting its own companies at the expense of foreign rivals. It uses the power of the state to support domestic firms in a way that EU and US rivals can only dream of.
Newsflash: The chairman of Royal Bank of Scotland has warned that taxpayer can’t expect to recoup the money spent rescuing the bank.
“The focus on survival over a decade has had a cost.
“The bank has lost almost 130 billion during the period. That amounts to around four-and-a-half times the bank’s current market capitalisation.”
“It seems clear that, in aggregate, the cost of these remedies to the bank and its shareholders was very much greater than could reasonably have been forecast at the time.
“It is another important reason why the book value of the bank is not greater than it is today.”
Ouch! Factory output across the eurozone fell unexpectedly in July.
Industrial production fell by 0.8% during the month, compared with June. Durable consumer goods production shrank by 1.9%, while non-durable consumer goods fell by 1.3%.
Trade war angst has pulled emerging market stocks down to their lowest level since May 2017 today.
Some traders are pointing to China’s decision, yesterday, to ask the World Trade Organisation for permission to impose $7bn a year in sanctions on the United States.
There are also signs in Vladivostok that relations between China and Japan are warming up.
Japanese PM Shinzo Abe told the economic forum that he hopes to visit China soon, and to welcome Xi to Japan in the future too.
“In response to China’s gracious invitation, I intend to visit China this year, the year in which we commemorate the 40th anniversary of the conclusion of the Treaty of Peace and Friendship between Japan and China,”
“After that, I very much wish to invite President Xi to Japan. Through this exchange of visits at the leaders’ level, I hope to raise Japan-China relations to a new stage.”
As a teetotaler, Donald Trump wouldn’t have appreciated the vodka being quaffed in Vladivostok. But the US president should still note the warmth between Xi and Putin this week.
Such clear chumminess suggests that the White House’s belligerence over trade is encouraging friendships and alliances elsewhere.
President Xi Jinping, already said during his speech at Eastern Economic Forum in Russia that the country’s relationship with Russia is at all-time high. His message was clear that his country is ready to study other relationship and work on different projects with them. Putin just added more fuel on the fire during the conference and criticised those countries who favour protectionism- a direct hint to US.
Trump needs to change his attitude or the US will become the biggest loser of this trade war…
President Vladimir Putin has now echoed Xi’s attack on US trade policies.
“Basic principles of trade — competition and mutual economic benefit — are depreciated and unfortunately undermined, they’re becoming hostages of ideological and fleeting political situations, in that we see a serious challenge for all of the global economy, especially for the dynamically-growing Asia-Pacific and its leadership,” he added.
Other Asian stock market also fell today, dragging shares across the region to their lowest levels in 14 months.
Japanese stocks fell by around 0.5%, while the Hong Kong Hang Seng shed another 0.3%.
While Xi was speaking in Vladivostok, the Chinese stock market was heading into the red again.
The Shanghai Composite index fell by 0.3% to close at its lowest level since late January 2016, as traders continued to be dogged by trade war worries.
Shanghai Composite closed less than one single point above the lowest close following that epic fall from grace in 2015. Beyond this point, we’re back to 4-year lows in China. pic.twitter.com/VUTbl0twnO
Yesterday Russian president Vladimir Putin treated Xi Jinping to pancakes with caviar, washed down with best vodka, on the sidelines of the Vladivostok economic forum.
Beijing and Moscow have developed a “strategic partnership” reflecting their shared opposition to the “unipolar” world, the term they use to describe perceived U.S. global domination.
The rapprochement has been driven by a strong personal relationship between Putin and Xi, seen as the most powerful Chinese leader since Mao Zedong. The two have met nearly 30 times, and Putin said that the Chinese president is the only world leader whom he once invited to celebrate his birthday.
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“There are deep and complex changes underway in the international situation, the politics of force, unilateral approaches and protectionism are rearing their head.”
“We have unique geographic benefits. China and Russia are the biggest neighbours, we have solid political ties.
Chinese and Russian relationships are at all times high level.”
“Trade is a positive, trade is a plus, trade needs fixing certainly but it is a tool and an engine for growth that should not be under threat, particularly at the moment.”
Lagarde warns of US-China trade war ‘shock’ to emerging markets https://t.co/tECLE6g4Xk