As trade war looms, the US looks confident. China, not so much

[abc123xyx]

So where does the $500 billion come from?
Please enlighten us.

americans are highest paid....

 

[Nan Yang]

americans are highest paid....

Yes, but unfortunately they spend more then they earn. US consumer have no money. They buy all the Chinese made stuff using credit cards. Credit that probably comes from China.
On the other hand in China buying on credit is not that popular. They use Union pay card or Alipay which are debit card which means they spend what they earn.
Which consumer is stronger....Go figure.

 

[abc123xyx]

Yes, but unfortunately they spend more then they earn. US consumer have no money. They buy all the Chinese made stuff using credit cards. Credit that probably comes from China.
On the other hand in China buying on credit is not that popular. They use Union pay card or Alipay which are debit card which means they spend what they earn.
Which consumer is stronger....Go figure.

its their internal matter between them and their banks....
banks gives them cradit coz they return it with intrests....and they able to return because they earn well...

 

[S10]

It has long been said that when the Fed sneezes, emerging markets catch a cold. And China, as the world’s largest developing economy and exporter, is no exception – its fate is closely linked to the US market. That is why China’s central bank usually mirrors the Federal Reserve’s monetary policy, tightening when it tightens, loosening when it loosens. For example, in March and December of 2017 and March this year, it followed rate hikes by the Fed with increases in its reverse repurchases rate – one of Beijing’s most commonly used tools to control liquidity in the financial system.

But Beijing now appears ready to defy convention. When the Fed moved to tighten the monetary supply with its rate hike of 25 basis points on June 14, the People’s Bank of China went in the opposite direction and loosened the taps. Not only did it – quite unexpectedly – leave its reverse repo rate unchanged, but last Sunday it cut the reserve requirement ratio on its commercial banks by 50 basis points. That move, which will inject about 700 billion yuan into the economy, came on top of its 100 basis points cut in April, and is a clear sign of policy easing in the face of headwinds both domestically and from abroad.

The shift in policy comes amid weak economic data and an escalating trade dispute with the US – a dispute that might yet escalate into a full-blown trade war between the world’s two largest economies.

The Fed’s latest rate hike reflects the fact that the world’s largest economy is powering ahead, with a projected robust growth rate of 4.5 per cent in the second quarter. The Fed is mainly tasked with achieving stable prices and full employment, so the hike makes sense. Unemployment is falling (it is around 3.8 per cent currently) and inflation is under the Fed’s 2 per cent target. The Dow Jones is continuing its decade-long rally from a low of around 7,000 in March 2009 to a recent high of over 25,000, and the greenback hit a new 2018 high just last week. Such is the optimism that the Fed’s quarterly update indicates a possibility of four rate hikes this year.

China’s easing, on the other hand, highlights Beijing’s concern that economic growth is losing momentum and market fears regarding the trade row with Washington. While China’s economy may still achieve an enviable 6.5 per cent growth this year, warning lights are flashing in some areas. For decades, China’s phenomenal growth has been fuelled by three major drivers: capital investment, exports and private consumption.

But activity indicators in May suggested that investment, exports and retail sales had all unexpectedly slowed. Fixed asset investment growth slowed to 3.9 per cent year-on-year, the lowest in 18 months, with infrastructure investment declining 1.1 per cent. Export growth slowed to only 3.7 per cent in April and 3.2 per cent in May – and growth could be further limited by the trade dispute. Meanwhile, retail sales rose 8.5 per cent in May from a year earlier, the slowest pace since June 2003.

This has triggered panic sell-offs in the markets. The Shanghai Composite Index fell to below 2,800 points this week, the lowest level in two years, and far below the 6,000 points it hit in 2009. The yuan has fallen to its lowest rate against the US dollar since December and there are fears of an even sharper depreciation in the event of an all-out trade war.

The situation for China’s economy will probably get worse before it gets better. The party-led and state-dominated economy is now clouded by a host of issues; overcapacity in some industries, an assets bubble, a problematic property market, a mounting debt burden and rising credit defaults. And a trade war with the US may be the biggest risk of all. Thus the divergence in monetary policies between the Fed and the People’s Bank reflects policymakers’ confidence in their country’s economic outlook as the world’s two most important trading partners stumble towards a confrontation. The US looks confident; China, not so much.

http://www.scmp.com/week-asia/opini...ar-looms-us-looks-confident-china-not-so-much

Harley-Davidson just decided to move a large part of its production out of US. The biggest steel nail maker in US is shutting down and the whole industry looks to be at risk. Dow Jones lost all gains made in the last 12 months. Your major allies and neighbors are retaliating against you. Is that what confidence look like in US?

Whatever helps you sleep at night I guess.

 

[oprih]

Most likely the americans themselves are confident that they won't survive this trade war.

 

[Viva_Viet]

CN admit that chaos is coming .....everyone is running out of CN like jumping out of sinking ship.........hundred million Cnese lossing jobs

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China's state media says markets are being 'irrational,' calls for calm amid trade frictions

• The recent sell-off in Chinese stock markets is an "irrational overreaction," according to the country's state newspapers such as Securities Daily and Economic Daily.
• Shares in the world's second-largest economy have entered bear territory on escalating trade tensions between China and the U.S.

Published 1 Hour AgoReuters


Shanghai composite falls in June, on track for worst year since 2011 19 Hours Ago | 02:24
Chinese state media on Tuesday called a recent sell-off in mainland stock markets an "irrational overreaction" and urged investors not to panic over growing trade frictions between Beijing and Washington.

The comments, made in newspapers such as the Securities Daily and Economic Daily, come as China's Shanghai bourse dove to more than a two-year low on Monday as the brewing trade war threatens to knock the world's second-largest economy.

"Intensifying trade frictions between China and the United States is a test that the Chinese economy inevitably had to experience during its rise," the Economic Daily said.


"We have long anticipated and prepared for this... The impact on the Chinese economy is within a controllable range."

The Securities Daily newspaper called the slump in the A-share marketan overreaction, saying that investors should have confidence in China's domestic market and that the current macroeconomic situation was stable.

Investors are jittery ahead of a July 6 deadline when the United States is set to impose tariffs on $34 billion worth of goods from China, the epicenter of a heated trade dispute between Washington and major economies that has convulsed financial markets.

Beijing is expected to respond with tariffs of its own on U.S. goods as the trade fight between the world two biggest economies threatens to damage global trade and investment.

Li Yang, director-general of government think-tank National Institution for Finance & Development (NIFD), told the Global Times newspaper that he did not think the financial panic would evolve into a wider financial scare and that authorities had proven effective in the past to pacify market sentiment.

A NIFD report which said that China should be wary of any financial panic stemming from uncertainties appeared briefly online last week before being removed. Li said that report was for internal discussion.

https://www.cnbc.com/2018/07/03/china-state-media-on-stock-markets-trade-frictions-with-the-us.html

 

[Viva_Viet]

China reportedly aims to tackle 'uncertainties' in employment with incentives to boost job creation

• China will offer incentives aimed at encouraging firms to create and maintain jobs as it tries to head off "uncertainties" in employment, the official China Daily said on Thursday.
• It said the priority would be to find work for college graduates, veterans and laid off workers, and provide more vocational training.

Published 5 Hours AgoReuters

VCG | Getty Images
Applicants at a labour market in Xi'an, China on February 27, 2016.

China will offer incentives aimed at encouraging firms to create and maintain jobs as it tries to head off "uncertainties" in employment, the official China Daily said on Thursday.

"No jobs means no wealth creation and possibly less social stability," the newspaper quoted Premier Li Keqiang as saying during a meeting of the State Council on Wednesday.

It said the priority would be to find work for college graduates, veterans and laid off workers, and provide more vocational training.


New measures would be introduced to reduce labor costs, ease the burden on corporations and support more flexible types of employment, the newspaper said.

Citing figures from China's human resources ministry, the report said the country created a record 6.13 million new jobs in the first five months of the year, up 140,000 compared to a year earlier.

https://www.cnbc.com/2018/07/05/chi...tives-to-tackle-employment-uncertainties.html

hundred million CNese losing job. Chaos coming so close
99% Cnese on DPF are jobless or no stable job due to Trump's sanction, so bad for them while keep bragging like idiot on internet

 

[powastick]

China reportedly aims to tackle 'uncertainties' in employment with incentives to boost job creation

• China will offer incentives aimed at encouraging firms to create and maintain jobs as it tries to head off "uncertainties" in employment, the official China Daily said on Thursday.
• It said the priority would be to find work for college graduates, veterans and laid off workers, and provide more vocational training.

Published 5 Hours AgoReuters

VCG | Getty Images
Applicants at a labour market in Xi'an, China on February 27, 2016.

China will offer incentives aimed at encouraging firms to create and maintain jobs as it tries to head off "uncertainties" in employment, the official China Daily said on Thursday.

"No jobs means no wealth creation and possibly less social stability," the newspaper quoted Premier Li Keqiang as saying during a meeting of the State Council on Wednesday.

It said the priority would be to find work for college graduates, veterans and laid off workers, and provide more vocational training.


New measures would be introduced to reduce labor costs, ease the burden on corporations and support more flexible types of employment, the newspaper said.

Citing figures from China's human resources ministry, the report said the country created a record 6.13 million new jobs in the first five months of the year, up 140,000 compared to a year earlier.

https://www.cnbc.com/2018/07/05/chi...tives-to-tackle-employment-uncertainties.html

hundred million CNese losing job. Chaos coming so close
99% Cnese on DPF are jobless or no stable job due to Trump's sanction, so bad for them while keep bragging like idiot on internet

China care about their people, US doesn't care at all.

 

[Viva_Viet]

China care about their people, US doesn't care at all.

US's main bussiness is making and selling weapons. Chaos in CN will help US sell billion of billion USD weapon and have enough money to "care" abt her ppl after that

 

[Viet]

Yes, but unfortunately they spend more then they earn. US consumer have no money. They buy all the Chinese made stuff using credit cards. Credit that probably comes from China.
On the other hand in China buying on credit is not that popular. They use Union pay card or Alipay which are debit card which means they spend what they earn.
Which consumer is stronger....Go figure.

US consumers have no money? They buy made in CN stuffs using CN loans? Can you stop spewing nonsense. I am in the US now, traveling from one city to another. The only thing I see everywhere on the roads is Japanese cars. Expensive items. No wonder the Japanese are rich. Made in CN items are found indeed everywhere in cheap shops.

Garment, shoes, plastic toys, household goods.

VN could easily replace those items should America shut the doors for CN goods.

 

[Hamartia Antidote]

That's because unlike us (Indians and Chineese} Americans don't believe in savings...

I think it is more because there is no fear of starvation or not having a roof over your head. Paying that $500 is just an inconvenience.

The original article said most people would simply eat out less at restaurants for a bit to make up for the quick shortfall. It didn’t mean people have no money.

 

[AViet]

US consumers have no money? They buy made in CN stuffs using CN loans? Can you stop spewing nonsense. I am in the US now, traveling from one city to another. The only thing I see everywhere on the roads is Japanese cars. Expensive items. No wonder the Japanese are rich. Made in CN items are found indeed everywhere in cheap shops.

Garment, shoes, plastic toys, household goods.

VN could easily replace those items should America shut the doors for CN goods.

The main export from China to the US are not plastic toys or shoes, but machinery and equipment, which you cannot see on the streets.

Check data on US-China import-export before spreading such nonsense.

 

[Politico]

Fck China and US. The victims of this trade war are 3rd world developing countries. Just recently landed in South Africa. The mood here is so pessimistic. Gas prices at an all time high at nearly a £ for a liter of gas ! Unemployment at an all time high. American and Brit companies pulling out on a daily basis.

 

[El Sidd]

Fck China and US. The victims of this trade war are 3rd world developing countries. Just recently landed in South Africa. The mood here is so pessimistic. Gas prices at an all time high at nearly a £ for a liter of gas ! Unemployment at an all time high. American and Brit companies pulling out on a daily basis.

Enjoy your honeymoon

 

[Viet]

The main export from China to the US are not plastic toys or shoes, but machinery and equipment, which you cannot see on the streets.

Check data on US-China import-export before spreading such nonsense.

What nonsense? Ok from all Chinese imports only 1 percent is consumer goods, the rest 99 percent are capital and intermediate goods. And not surprisingly that wil be the main line of attack. The US plans imposing tariffs on $450 billion on Chinese imports if implemented that will force mass factory shutdown and layoffs in China.

Of course that will hurt the US both consumers and companies but we can assume it is calculated “who gets hurt more” in the strategic consideration in the trade war.

That will be an interesting showdown. every student at business school is curious to see who will win at the end.