China says tariff threat ‘justified’

This photo taken on August 2, 2018 shows workers at a swimwear factory in Yinglin town in Jinjiang, in China's eastern Fujian Province. China's garments industry is expected to be affected with the escalating US-China trade war. (AFP photo)
Updated 05 August 2018
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China says tariff threat ‘justified’

  • China and the US have been embroiled for months in a trade conflict that has threatened to hurt consumers in both countries
  • Washington claims that China’s export economy benefits from unfair policies and subsidies, as well as theft of US technological know-how

SINGAPORE: China’s foreign minister said on Saturday that his country’s threat to impose retaliatory tariffs on $60 billion of US goods in an escalating trade dispute was “fully justified.”

Beijing threatened on Friday to bring in the levies on products ranging from beef to condoms, after US President Donald Trump’s administration upped the ante in its plans for additional tariffs on Chinese goods worth $200 billion.

Washington suggested the rate on the proposed extra tariffs could be increased from 10 to 25 percent.

China and the US have been embroiled for months in a trade conflict that has threatened to hurt consumers in both countries.

Washington claims that China’s export economy benefits from unfair policies and subsidies, as well as theft of US technological know-how.

Speaking on the sidelines of a security forum in Singapore, Foreign Minister Wang Yi said China’s threat of retaliatory tariffs was “fully justified and necessary.”

“These are measures taken out of the consideration for upholding the interests of the Chinese people,” he said, speaking through a translator.

He said the move was also aimed at upholding the “global free trade regime.” 

Wang also hit back at comments by top White House economic adviser Larry Kudlow, who ridiculed China’s tariff threat as “weak” and said the world’s second-largest economy was in significant “trouble.”

“As to whether China’s economy is doing well or not, I think it is all too clear to the whole international community,” Wang said.

In early July, the US imposed 25 percent tariffs on $34 billion of Chinese goods, with another $16 billion to be targeted in coming weeks, sparking retaliatory measures from China. Days later, Washington unveiled a list of another $200 billion in Chinese goods.

But Trump raised the stakes this week with a threat to lift the tariff rate.

China has said that new duties will be applied only if Washington pulls the trigger on its new tariffs.

Decoder

China-US Trade War

In early July, the US imposed 25 percent tariffs on $34 billion of Chinese goods, with another $16 billion to be targeted in coming weeks, sparking retaliatory measures from China. Days later, Washington unveiled a list of another $200 billion in Chinese goods that would be hit with 10 percent import duties.


India names Modi demonetization backer as cenbank head

Visitors are seen standing next to a logo of the Reserve Bank of India (RBI) at the bank's head office in Mumbai on December 5, 2018. (AFP)
Updated 12 December 2018
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India names Modi demonetization backer as cenbank head

  • Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization

MUMBAI: Ex-finance ministry official Shaktikanta Das took charge of the Reserve Bank of India on Tuesday, in a swift appointment expected to ease a dispute with the government as it pushes for looser credit rules ahead of a general election.
The announcement by Prime Minister Narendra Modi’s administration came just a day after Urjit Patel resigned from the post, following months of clashes between the two institutions over lending curbs and how to deploy the central bank’s surplus reserves.
Pressure on the RBI to take immediate steps to boost the economy, including a transfer of the excess reserves to the government, could well rise after Modi’s ruling Bharatiya Janata Party (BJP) suffered likely election losses in three key states on Tuesday.
Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization — will serve a three-year term as governor, effective immediately.
RBI watchers said they expected the 61-year-old, who retired last year as secretary of the department of economic affairs having previously served on the RBI’s board, to put relations between the Mumbai-based bank and the finance ministry in New Delhi on a stabler footing.
Investors will also look closely at his ability to hold up against outside influences after recent efforts by the Modi government to gain greater control over the central bank’s regulatory powers.
“The incoming governor will have to work hard to prove that he has his own independent mind,” said Deepak Jasani, head of retail research at Hdfc Securities.
Investors said any openly political appointee with little macro-economic experience, would not sit well with financial markets that already sold off following the BJP’s election setbacks.
But Ashish Vaidya, executive director and head of trading at DBS Bank in Mumbai, said he expected India’s debt and currency markets to react positively.
“He is a bureaucrat...We expect the RBI to take a pragmatic approach under him, be pro-growth and change its stance going ahead given that inflation has come off sharply,” he said.
Finance Minister Arun Jaitley told Reuters partner ANI that the government acknowledged the bank’s independence.
“Government will fully support the RBI and coordinate with it in areas where consultations of government are required to make sure India’s economy benefits from both government policy decisions and areas which fall within domain of the RBI,” ANI tweeted, quoting Jaitley.

SWIFT APPOINTMENT
Pronab Sen, India’s former chief statistician, said he was surprised by the speed of Das’s appointment.
“If you have a situation where a position as important as the governor of the RBI is filled within 24 hours of the resignation of the incumbent, that will raise eyebrows,” Sen told Reuters.
“People are going to say, clearly this guy had already been identified. And, the situation was created where Urjit Patel had to quit.”
Das — widely seen as a contender for the top RBI job after Raghuram Rajan’s term ended in 2016 — did not answer calls from Reuters to his mobile phone.
RBI officials who have worked with him closely said Das was likely to be more inclusive in the decision-making process than Patel.
“He has a balanced approach and is good at consensus building,” said a former deputy governor. .”..We have had our fair share of differences. But he has always been solution-centric rather than festering on those differences.”
Das worked in the finance ministry under both Modi’s government and the previous coalition led by the main opposition Congress party and was also involved in drafting the Insolvency and Bankruptcy code aimed at protecting small investors.
He came under fire for his pro-demonetization stance and was the most vocal bureaucrat at the time Modi withdrew the high-value bank notes to fight tax evasion.
Das last year criticized the methodology of global rating agencies and sought a sovereign rating upgrade for India.