China-US trade talks ‘making a final sprint’ — state media

U.S. Treasury Secretary Steven Mnuchin shakes hands with Chinese President Xi Jinping as U.S. Trade Representative Robert Lighthizer, left, and Chinese Vice Premier Liu He, right, look on before proceeding to their meeting at the Great Hall of the People in Beijing, China February 15, 2019. (REUTERS)
Updated 16 February 2019
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China-US trade talks ‘making a final sprint’ — state media

  • US duties on $200 billion in imports from China are set to rise to 25 percent from 10 percent if there is no deal by March 1 to address US demands

SHANGHAI: Chinese state media on Saturday expressed cautious optimism over trade talks between the United States and China, a day after President Xi Jinping said a week of discussions had produced “step-by-step” progress.
Xi made the comments at a meeting on Friday with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Beijing, after a week of senior- and deputy-level talks.
The People’s Daily, the official paper of the ruling Communist Party, said in a commentary that Xi’s meeting with US negotiators had affirmed progress made in previous talks and “injected new impetus into the next stage of the development of Sino-US trade relations.”
The talks “have made important progress” for the next round of negotiations in Washington next week, the paper said in its domestic edition.
“It is hoped that the two sides will maintain the good momentum of the current consultations and strive to reach an agreement within the set time limit,” it said.
US duties on $200 billion in imports from China are set to rise to 25 percent from 10 percent if there is no deal by March 1 to address US demands that China curb forced technology transfers and better enforce intellectual property rights.
In its overseas edition, the People’s Daily said “zero-sum thinking and games where you lose and I win can only create losses for both. Only on a basis of mutual respect and equal treatment, through dialogue and consultation, can we find a solution acceptable to both sides.”
An English-language editorial in the Global Times, which is published by the People’s Daily, said news that China had consulted on the text of a memorandum of understanding “shows the two sides have made unprecedented progress.”
“The MOU and next week’s talks both show that the seemingly endless China-US trade negotiations, like a marathon, are making a final sprint,” it said.
The newspapers cautioned that any agreement would have to be in the interests of both the United States and China.
“There are still obstacles to be overcome, and no one should underestimate how daunting a task the two sides face trying to resolve all the differences that have long existed between them in one clean sweep,” the official English-language China Daily said in an editorial.


Pakistan receives $2.2 bn loan from China to stabilize economy

Updated 4 min 11 sec ago
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Pakistan receives $2.2 bn loan from China to stabilize economy

  • Chinese loan boosts foreign exchange reserves to around $11 billion
  • Currency reserves remain under constant pressure due to increasing foreign debt obligations

KARACHI: Pakistan on Monday received a $2.2 billion loan from staunch ally China to stabilize high fiscal and current account deficits, raising the country’s foreign exchange reserves to around $11 billion.
The move comes as Pakistan, which has opened talks with the International Monetary Fund about a possible bailout, faces a struggle to avoid a balance of payments crisis that has left it with growing debts and dwindling foreign exchange reserves.
“Yes we have received $2.2 billion from the China today,” Abid Qamar, a spokesman for the State Bank of Pakistan (SBP) told Arab News.
In November last year, China promised to support Pakistan’s economy following a meeting in Beijing between Chinese Premier Li Keqiang and Pakistani Prime Minister Imran Khan but the exact amount of the loan package was not announced.
“The inflow of Chinese financial assistance will improve foreign exchange reserves and ensure balance of payment stability,” Dr. Khaqan Hassan Najeeb, a spokesperson for the finance ministry, said.
Central bank data for up until March 15, 2019 shows that with the injection of the Chinese loan, foreign exchange reserves will increase to around $11 billion and total liquid reserves to around $17.9 billion.
Pakistan has been searching for investment from friendly countries since the government of Prime Minister Imran Khan took office in August. Last year, both Saudi Arabia and the United Arab Emirates also offered Islamabad loan packages of $3 billion. Saudi Arabia offered an additional $3 billion for import of oil on differed payments.  
But despite the foreign inflows, currency reserves remain under constant pressure due to increasing foreign payment obligations. The rupee traded at 140.40 against the US dollar in the interbank market on Monday as compared to 140.36 on Friday.
“There was no impact of the Chinese inflows today on the exchange rate but it could be on Tuesday,” Zafar Paracha, General Secretary of Exchange Companies Association of Pakistan, told Arab News. “Uncertainty about IMF is one of the reasons. Despite foreign inflows, currency reserves are continuously falling.”
Pakistan’s net international reserves also continue to deteriorate on the back of high debt repayments. Over the next twelve months, Pakistan has to pay $14.6 billion in debt servicing including $12.8 billion as principal repayment and $1.8 billion as interest, according to Arif Habib Limited research.