Business
US Farm Deals With South Korea and Japan to Limit China Trade War Retaliation
News Analysis
The Trump administration’s new farm deal with South Korea and the passage of Japanese agricultural import legislation undermine China’s trade war retaliation strategy.
China’s trade war retaliation strategy, which is aimed at economically targeting President Donald Trump’s rural voting base, took two huge hits this month. South Korea ended its four-year rice ban on Nov. 19 and agreed to allow rice imports of at least 132,304 tons annually. Shortly thereafter, Japanese Prime Minister Shinzo Abe overcame opposition in the Lower House for a potentially huge American beef, pork and corn import deal.
China has employed a sophisticated U.S. voter targeting methodology to maximize the economic pain of its retaliatory trade war tariffs in so-called U.S. “battleground” counties that President Trump will need to win in the 2020 elections, according to a study by the U.S. Bureau of Economic Research.
There has been an uptick in farm bankruptcies, mostly due to weather issues, but the U.S. Department of Agriculture forecasts 2019 farm income will increase by $4 billion, or 4.8 percent, to $88 billion in 2019, after rising in both 2017 and 2018. The USDA report added that 2019 farm income will be in the top 30 percent after inflation.
The Chinese strategy has inflicted substantial economic pain on its own households, with China food inflation rising from 11.2 percent in September to 15.5 percent in October, the highest since January 2008. Bloomberg warned that China’s monthly consumer inflation surged past 3 percent in September and could exceed 4 percent in early 2020 on the back of surging pork and other meat prices.
The ratio of Chinese household debt to gross domestic product rose by 2.1 percentage points in the first six months of 2019 to 55.3 per cent, according to Beijing think tank National Institution for Finance and Development. With China accounting for 15 percent of global debt, NIFD warned the strain of heavy debt and high inflation is hurting consumption.
Domestic inflation is credited with forcing China on Nov. 13 to lift its…
Business
Russia’s Booming Economy is Straining a Vital Trading Route with China
Russia’s railway industry is experiencing a significant downturn, with a nearly 30% investment cut and a 5% freight volume decline, complicating trade with China amidst the economic impacts of the Ukraine war.
Downward Trend in Russia’s Railway Industry
Russia’s railway industry is currently experiencing a significant downturn, largely due to the impacts of the ongoing conflict in Ukraine. According to MMI Research, this sector is facing its biggest slowdown since the Great Financial Crisis, with freight volumes dropping by 5% in the first 11 months of 2024. The war-driven economy has hindered trade, particularly with China, which heavily relies on rail transport.
Investment Cuts and Economic Consequences
Investment in Russia’s railways is set to decrease by almost 30% next year, dropping to 890 billion rubles (approximately $8.5 billion). This reduction is attributed to high interest rates, currently at a record 21%, which further complicate financing options. The state-owned Russian Railways is reconsidering future investments, indicating potential cuts by another third through 2030.
Challenges Affecting Trade with China
The decline in rail capacity poses significant challenges for Russia’s trade with China. As Western sanctions push Russia to diversify its trade routes, rail transport has become increasingly vital for moving goods. However, supply bottlenecks, exacerbated by the need to transport war-related materials, threaten to disrupt this crucial trading relationship further.
Source : Russia’s overheated economy is squeezing one of Moscow’s key trading channels with China
Business
Democrat Claims Musk is Undermining Spending Bill Due to China Restrictions – The Hill
A Democrat claims Elon Musk influenced the reduction of a spending bill due to its restrictions on China, suggesting his actions impacted the legislation’s progress and funding allocation.
Allegations Against Musk
A prominent Democrat has accused Elon Musk of deliberately sabotaging a significant spending bill in response to China-related restrictions. This accusation comes amid ongoing tensions between the U.S. and China, particularly regarding technology and trade policies. The claims suggest that Musk’s influence is affecting critical legislative processes, raising concerns among lawmakers about foreign influence in American politics.
Implications for Legislation
The potential ramifications of Musk’s alleged actions could be significant. As a major player in the tech industry, his decisions can sway public opinion and impact the economy. Lawmakers fear that if influential figures like Musk oppose necessary legislation, it might hinder efforts to address vital issues such as national security and economic stability.
Political Reactions
The controversy has sparked debates among both Democrats and Republicans, highlighting the intersection of technology and politics. Many are demanding greater transparency and accountability from tech giants. As the situation unfolds, lawmakers may need to reassess their strategies to ensure that essential legislation moves forward uninterrupted.
Source : Democrat accuses Musk of tanking spending bill over China restrictions – The Hill
Business
HSBC Chairman to Head Key UK Business Delegation to China
HSBC Chairman Mark Tucker will lead a UK business delegation to China next month to boost trade and investment, amid concerns over national security and improving UK-China relations.
HSBC Chairman Leads UK Delegation to China
HSBC Chairman Mark Tucker will lead a pivotal British business delegation to China next month, marking the first significant visit since 2018. The trip aims to enhance Chinese investment in the UK, guided by Chancellor Rachel Reeves. Tucker, a seasoned financier with extensive Asia experience, is regarded as essential in resetting UK-China relations.
Reviving Economic Dialogue
Tucker will accompany senior bankers in seeking to rejuvenate trade, specifically focusing on financial services. Although there are apprehensions among some UK lawmakers regarding national security threats posed by closer ties to Beijing, the UK Treasury spokesperson confirmed Chancellor Reeves’ upcoming discussions on economic cooperation in Beijing.
A Shift in UK-China Relations
Since suspending most dialogues following China’s imposition of a national security law in Hong Kong, UK-China relations have soured. Nevertheless, the Labour government is prioritizing improved ties with China, emphasizing investment opportunities. Reeves asserts the necessity of a pragmatic approach to benefitting national interests amid ongoing concerns voiced by some lawmakers about security risks.
Source : HSBC Chairman to lead pivotal UK business delegation to China
- Russia’s Booming Economy is Straining a Vital Trading Route with China
- Democrat Claims Musk is Undermining Spending Bill Due to China Restrictions – The Hill
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