Market

Bargaining chips: Taiwan’s implications of the Vance Doctrine
26Sep By TheGreenZoneNo Comments
Market, USA, World

Bargaining chips: Taiwan’s implications of the Vance Doctrine

Donald Trump’s selection of JD Vance as his 2024 running mate has disquieted America’s security partners in Europe and Asia. If America’s 45th president returns as its 47th and a Vice President Vance holds sway, the implications for Europe are clear. Vance argues that President Joe Biden’s arming of the Ukrainians has passed the point of diminishing returns and that it distracts from America’s challenge of greatest import: China’s rise. But while Vance has called for a focus on Asia, what exactly a Vance-inflected foreign policy would mean for the region is not obvious. Vance’s well-documented body of thought on American society, governance, and strategy offers some clues, however, on how he would approach China, Taiwan, and related questions. The theme that ru...
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Through negotiations on minimum EV pricing, China and the EU want to avert a trade war.
26Sep By TheGreenZoneNo Comments
Asia, China, Market

Through negotiations on minimum EV pricing, China and the EU want to avert a trade war.

BERLIN — Brussels and Beijing are engaged in intense 11th-hour negotiations on Chinese electric-vehicle subsidies, raising hopes in Germany that EU duties — and a wider trade war — can still be avoided, officials familiar with the talks said. The discussions are an attempt to solve an ongoing dispute over Beijing’s subsidies for Made-in-China EVs, which the EU says are artificially lowering prices and making it impossible for its own industry to compete. Under discussion is the idea of setting voluntary minimum prices that would offset the market-distorting Chinese subsidies, thereby rendering the planned EU duties moot. One official described the concept as a “surcharge“ that would balance out the Chinese state aid. A meeting between Chinese Commerce Minister Wang Wentao an...
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Since the epidemic, China’s central bank has unveiled the most powerful stimulus.
26Sep By TheGreenZoneNo Comments
Asia, China, Market

Since the epidemic, China’s central bank has unveiled the most powerful stimulus.

BEIJING, Sept 24 (Reuters) - China's central bank on Tuesday unveiled its biggest stimulus since the pandemic to pull the economy out of its deflationary funk and back towards the government's growth target, but analysts warned more fiscal help was vital to hit these goals. The broader-than-expected package offering more funding and interest rate cuts marks the latest attempt by policymakers to restore confidence in the world's second-largest economy after a slew of disappointing data raised concerns of a prolonged structural slowdown. But analysts questioned how productive the People's Bank of China's liquidity injections would be, given extremely weak credit demand from businesses and consumers, and noted the absence of any policies aimed at supporting real economic acti...
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25Sep By TheGreenZoneNo Comments
Asia, China, Market, World

The world economy is stabilizing, but it is still weak. These are the main economists’ predictions for the economy.

The global economic outlook is stabilizing amid continuing economic uncertainty. The World Economic Forum's September 2024 Chief Economists Outlook found that a majority of chief economists (54%) expect the condition of the global economy to remain unchanged over the next year while more than a third (37%) expect it to weaken. “There are reasons for cautious optimism such as an easing of inflation and evidence of the resilience of global commerce,” the report notes. “Yet, if the economy is stabilizing, it is doing so at the weakest level in decades.” The Chief Economists Outlook, published three times a year, surveys leading chief economists from across industries and international organizations. The latest edition explores key trends in the global economy, includi...
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How China got to be the market leader for electric vehicles and what the US can do to catch up
25Sep By TheGreenZoneNo Comments
Asia, China, Market

How China got to be the market leader for electric vehicles and what the US can do to catch up

The U.S. blinked, and China built an electric vehicle empire. "They're taking over the world, except North America," said Lei Xing, a Chinese auto industry expert. "The U.S. will be the last frontier." In the last 15 years, China has rolled out a public charging network over 10 million strong, convinced billions of drivers to go electric by dangling subsidies and other incentives, and introduced over 100 EV brands with a bevy of pricing options. The push exemplifies "China Speed," a term Xing used to describe the country's hypersonic development. The speed and scale of the shift has slingshotted China past the U.S. and every other nation in the transition to electric vehicles, while also positioning Chinese automakers near the front of the pack to dominat...
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China announces several economic stimulus plans.
25Sep By TheGreenZoneNo Comments
China, Market

China announces several economic stimulus plans.

China's central bank has unveiled a major package of measures aimed at reviving the country's flagging economy. People's Bank of China (PBOC) Governor Pan Gongsheng announced plans to lower borrowing costs and allow banks to increase their lending. The move comes after a series of disappointing data has increased expectations in recent months that the world's second largest economy will miss its own 5% growth target this year. Stock markets in Asia jumped after Mr Pan's announcement. Speaking at a rare news conference alongside officials from two other financial regulators, Mr Pan said the central bank would cut the amount of cash banks have to hold in reserve - known as reserve requirement ratios (RRR). The RRR will initially be cut by half a percentage point, in a move ex...
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24Sep By TheGreenZoneNo Comments
Asia, Market, World

Rate increases will persist even when the Bank of Japan fires in September.

What’s happened? The Bank of Japan (BOJ, the central bank) decided to keep its policy rate unchanged at 0.25% at its policy board meeting on September 20th, pausing after a 15-basis-point increase in July. On the same day, official data showed that headline consumer price inflation accelerated to a 10-month high of 3% in August, from 2.8% in July, following strong growth in prices for food and utilities. Why does it matter? The BOJ is determined to pursue monetary normalisation by raising interest rates and winding down its asset-purchase programmes. However, the pace of the policy shift and the terminal policy rate will depend on Japan’s economic fundamentals, notably the strength of private demand and inflation expectations. The pause in September was factored into EIU’s foreca...
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24Sep By TheGreenZoneNo Comments
Asia, China, Market

China boosts its struggling economy with its most aggressive intervention in years.

China’s central bank has cut interest rates in an attempt to revive flagging economic growth and prevent scores of debt-laden property owners from going bust in its boldest intervention to boost the economy since the pandemic. Adopting a suite of measures to reduce borrowing costs, the People’s Bank of China cut interest rates on existing mortgages by 0.5 percentage points and supported new lending by reducing the level of reserves banks must set aside before making loans. The bank’s governor, Pan Gongsheng, said he would also ease restrictions on borrowing to invest in stocks and shares on Chinese exchanges, boosting the Shanghai composite index by more than 4% within hours of the announcement. Oil prices rose, with Brent crude up more than 1% at nearly $75 a barrel. The central...
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24Sep By TheGreenZoneNo Comments
China, Market

To boost its economy, China unleashes a financial bazooka.

What’s happened? On September 24th a series of policies were announced by China’s three top financial officials at a press conference to backstop the stalling economy. These notably included a 20-basis-point cut to the seven-day reverse repo rate (RRR; the policy interest rate); a 50-basis-point cut to the reserve requirement ratio (RRR); a rate cut on existing mortgages; capital replenishment of large state-owned banks; and other measures to support the housing and the stock markets. Why does it matter? The rare, simultaneous rollout of so many measures highlights the urgency for policymakers to prop up the economy. We believe that real GDP growth this year will miss the government’s annual target, and may even undershoot our own conservative growth forecast of 4.7%. The cuts to...
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US Economic Projection
21Sep By TheGreenZoneNo Comments
Market, USA

US Economic Projection

The Q3 2024 forecast indicates how robust consumer spending, high business investment, and lower interest rates have kept optimism about the US economy intact. However, risks like geopolitical tensions and persistently high inflation remain. Despite persistent concerns surrounding the durability of growth and interest rate policy, the US economy remains fundamentally strong. While real gross domestic product growth slowed in the first quarter of this year, growth rebounded to a strong 3.0% in the second quarter. All available evidence suggests policymakers may have managed to bring inflation under control without causing a recession. Deloitte’s baseline scenario remains relatively positive. The boom in factory construction will continue to boost the economy’s potential in the coming...
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