Latest news with #USChinaTradeWar
South China Morning Post
27-06-2025
- Business
- South China Morning Post
Is China's massive trade-in programme running out of steam?
For months, consumers across China buying everything from iPhones to cars and washing machines have enjoyed steep discounts – courtesy of the government. Advertisement This vast subsidy programme has played a key role in boosting China's consumer spending this year, helping the economy remain relatively robust even amid an unprecedented trade war with the United States. But in June, some of those offers suddenly disappeared . In the eastern Jiangsu province, local authorities stopped issuing vouchers for online purchases of home appliances. Around the same time, several other provinces suspended their trade-in programmes for cars and appliances, citing depleted funds. The cancellations were the first sign that a reckoning may be approaching over China's consumption-boosting policies, which have succeeded in their main goals – but come with a hefty price tag. Last week, Beijing reaffirmed its support for the national trade-in scheme for durable goods, pledging that the rest of the 300 billion yuan (US$41.8 billion) funding would be allocated to local governments before the end of the year, with the next two rounds of funding set to be issued in July and October. Advertisement On Thursday, Li Chao, deputy director of the National Development and Reform Commission's Policy Research Office, said the government would formulate monthly and weekly plans to monitor the utilisation of those funds. 'This will ensure the orderly implementation of the consumer goods trade-in policy throughout the year,' she added.
South China Morning Post
20-06-2025
- Business
- South China Morning Post
Will markets wake up from the Taco bubble before it's too late?
Stock markets have roared back to levels seen before 'Liberation Day' , seemingly on the mere belief that US President Donald Trump always chickens out – otherwise known as Taco – so no harm will be done in the end. However, the Taco trade is based on a bubble. Collective self-deception can work for a while but only when there is enough money behind it. Despite recent talks to de-escalate, the US-China trade war is still pushing the global economy to the brink. A looming recession and higher inflation will mean there is a lot less money available for speculation, especially for the Taco bubble. The Taco trade has worked because three major fund management firms – BlackRock, Vanguard and State Street – control large swathes of the market. These firms have a vested interest in supporting their assets. A lot of money is in circulation due to the US$8 trillion in quantitative easing undertaken by the US Federal Reserve between 2008 and 2022. Moreover, quantitative easing policies are still taking place around the world, which means there is enough money to keep the bubble going. Taco is just another psychological fix to bring back speculative courage. Trump would like to sell the recently concluded US-China trade negotiations in London as a victory for Washington. He talks about a 55 per cent tariff on China versus 10 per cent the other way round, and that rare earth minerals will soon flow to the US again.
Bloomberg
17-06-2025
- Business
- Bloomberg
Morgan Stanley's Top Asia Banker Targets $10 Billion in Revenue
Last month, as the US-China trade war heated up, Morgan Stanley 's co-President Dan Simkowitz made a discreet visit to Beijing. It was the first time a senior US executive from the bank had stepped foot in China in five years, and came days after a rare board meeting in Tokyo near the Imperial Palace. The low-key events underscore the focus the Wall Street giant is putting on Asia under recently installed Chief Executive Officer Ted Pick. After several tough years sparked by a slump in China that hammered global banks, Morgan Stanley is regaining traction in the region.
South China Morning Post
15-06-2025
- Business
- South China Morning Post
Why US market is no longer top priority for Chinese companies building foreign factories
This year's escalation of the US-China trade war has led many Chinese companies to rethink their overseas expansion strategies, with accessing the American market no longer their top priority when considering building factories in foreign countries, industry insiders said. There had been a 'drastic downshift' in inquiries from Chinese companies seeking land to rent or purchase in Mexico, one of their hottest overseas investment destinations in the past, said Jack Lee, an industrial property agent based in the United States whose clients are mostly Chinese firms. Mexico had become a popular choice since US President Donald Trump's first term, when he began to increase tariffs on made-in-China products, thanks to its proximity to the US and its participation in the United States-Mexico-Canada Agreement (USMCA). The free trade agreement guaranteed that as long as a certain percentage of content was made in North America, products could enter the US market free of taxes. But amid the escalated trade tensions between the US and China since Trump returned to the White House in January, doubts have been rising about whether products made by Chinese companies in Mexico will continue to enjoy the preferential treatment. USMCA is up for review next year and has already been breached by Trump with tariff increases on items including imported steel and aluminium. 'Nobody was there [in Mexico] to make a decision in the last couple of months because there has been lots of uncertainty,' Lee said. 'For those who already have their investment in Mexico … they are not expanding either; they are just barely making a minimum right now.' The vacancy rate for industrial property in Monterrey – a major industrial city in northern Mexico that has attracted the most Chinese companies so far – had grown to 5.6 per cent, up from below 1 per cent in the past four years, Lee said.
South China Morning Post
12-06-2025
- Business
- South China Morning Post
Bursting of US exceptionalism bubble a boon to Chinese stocks
The facts speak for themselves. On June 9, the Hang Seng China Enterprises Index (HSCEI), a gauge of mainland Chinese stocks listed in Hong Kong, entered a bull market after having risen 22 per cent since its recent low on April 7. The HSCEI and the MSCI China Index, which tracks Chinese companies listed at home and abroad, have largely outperformed all other major equity markets this year. That the sharp rally in Chinese shares occurred against the backdrop of deflationary pressures that show no sign of easing, low consumer confidence , a festering crisis in the property sector and a dramatic escalation in the US-China trade war makes the gains all the more remarkable. Several factors are at work. One of them, as Morgan Stanley noted in a report on May 20, is global investors' 'deeply underweight' position in Chinese equities following years of extremely bearish sentiment. This has created a 'sizeable allocation upside potential in moving from [an underweight to a neutral position]', Morgan Stanley said. A more important factor – and the most unexpected one – is the strong conviction on the part of many investors that the long period of US exceptionalism in markets has come to an end. US President Donald Trump's ruinous trade policies , blatant disregard for the rule of law and planned reckless tax cuts that add to America's ballooning public debt have cast doubt over the perceived safe haven status of US assets, especially the US dollar. The mantra of 'Tina' – There Is No Alternative – to US equities has given way to diversification as investors seek to rebalance their portfolios away from the United States. While there is intense debate about the pace and consequences of diversification, the waning appeal of US assets is a boon to Chinese stocks. Morgan Stanley says there is a 'higher willingness to add more positions in Chinese equities, fuelled by global diversification demand'. Nomura says 'the fading of the 'US exceptionalism' theme could help Asian equities', with China, India and Japan best placed to capture 'reallocation flows' given the depth and breadth of their stock markets. Goldman Sachs, meanwhile, notes that Chinese stocks tend to perform well when the yuan strengthens versus the US dollar.
