Global stocks mixed after US, China impose new tariff hikes

Investors sit on chairs as they watch stock market movements displayed on screens at a securities company in Beijing in this file photo taken on Aug. 26. (AFP)
Updated 02 September 2019

Global stocks mixed after US, China impose new tariff hikes

  • Surveys of Chinese factory activity show weak demand amid mounting tariff war with Washington

BEIJING: European stock markets opened higher while Asia was mixed Monday after Washington and Beijing escalated their war over trade and technology with new tariff hikes.

Benchmarks in London, Paris and Shanghai advanced. Tokyo and Hong Kong declined.

Markets reacted less strongly to the weekend tariff hikes on billions of dollars of goods than to previous increases. Investors are hoping for progress in talks this month, but analysts warn the fight over trade and technology is unlikely to be quickly resolved.

“The short-lived truce will probably provide limited relief,” said Zhu Huani of Mizuho Bank in a report. “Businesses have become increasingly uncertain about future prospects, evidenced by the pullback in business investment amidst growing concerns on growth.”

In early trading, London’s FTSE 100 rose 0.9 percent to 7,274.50 and France’s CAC 40 added 0.1 percent to 5,487.74. Germany’s DAX was 10 points higher at 11,949.88.

US markets were closed for a holiday.

In Asia, the Shanghai Composite Index gained 1.3 percent to 2,924.11 while Tokyo’s Nikkei 225 shed 0.4 percent to 20,620.19. Hong Kong’s Hang Seng lost 0.4 percent to 25,626.55.

Seoul’s Kospi ended 1 point higher at 1,969.19 and Sydney’s S&P-ASX 200 retreated 0.4 percent to 6,579.40. New Zealand and Taiwan gained while Southeast Asia markets retreated.

On Sunday, the US started charging 15 percent tax on about $112 billion of Chinese imports. China responded by charging taxes of 10 percent and 5 percent on a list of American goods.

Negotiators are due to meet this month in Washington but neither side has given any sign it might offer concessions.

The United States is pressing China to narrow its trade surplus and roll back plans for government-led creation of global competitors in robotics and other industries. Its trading partners say those violate its free-trade obligations and are based on stealing or pressuring companies to hand over technology.

The two governments have imposed higher taxes on about two-thirds of the goods they import from each other.

“We’ll see what happens,” President Donald Trump told reporters. “But we can’t allow China to rip us off anymore as a country.”

On Wall Street, stocks ended little changed Friday after a listless day of trading ahead of a holiday weekend.

The market closed out August with its second monthly decline this year, after May.

Financial, industrial and health care stocks were among the big winners. Those sectors outweighed losses in consumer goods makers and communication services stocks. Shares in companies that rely on consumer spending also fell.

The S&P 500 index rose 0.1% to 2,926.46. The Dow Jones Industrial Average gained 0.2% to 26,403.28. The Nasdaq slid 0.1% to 7,962.88.

Two surveys of Chinese factory activity showed demand is weak amid the mounting tariff war with Washington.

The business magazine Caixin said its monthly purchasing managers’ index showed activity edging up but a gauge of new orders fell to its lowest level this year. A separate survey by an industry group, the China Federation of Logistics & Purchasing, showed activity declining. It said demand was “relatively weak.”


Saudi imports from China up 17.8 percent in 2020 to $28.1 billion

Updated 24 January 2021

Saudi imports from China up 17.8 percent in 2020 to $28.1 billion

  • Bilateral trade between the two countries remains steady amid the ongoing global health crisis

RIYADH:  Saudi imports from China rose 17.8 percent year-on- year in 2020 to $28.1 billion, according to a report from Mubasher, citing figures from China Customs.

Despite this increase, the Kingdom’s overall trade surplus with China was down 63.9 percent last year to $6.2 billion, the report said.

Trading between the two nations has remained steady.
On Wednesday, Reuters news agency reported that Chinese govern- ment data showed the Kingdom was still the world’s biggest oil exporter, as well as beating Russia to keep its ranking as China’s top crude supplier in 2020.

Oil demand in China, the world’s top oil importer, remained strong last year despite the challenges brought on by the coronavirus disease (COVID-19) pandemic. Chinese imports rose 7.3 percent to a record 542.4 million tons, or 10.85 million barrels per day (bpd).

HIGHLIGHTS

  • Saudi shipments to China in 2020 rose 1.9 percent from a year earlier to 84.92 million tons.
  • The Kingdom’s overall trade surplus with China was down 63.9 percent last year to $6.2 billion.
  • In 2020, China became the GCC’s top trading partner, replacing the EU for the first time

Saudi shipments to China in 2020 rose 1.9 percent from a year earlier to 84.92 million tons, or about 1.69 million bpd, data from the General Administration of Chinese Customs showed.

Political commentator Zaid M. Belbagi wrote in an Arab News opinion piece that, with the increased importance of land and sea routes connecting Asia with Europe and Africa, China increasingly saw relations with the Arab world as “central” to its geostrategic ambitions.

“There is, however, a disconnect between the expansion of Chinese involvement in the region across the political and economic realms and the cultural and diplomatic connectivity required to deepen ties that will not only ensure Chinese interests, but also encourage Arab states to partake in the new world China is building in its own image,” he said.

Saudi-China relations have strengthened over the years. During the COVID-19 pandemic, ties were further strengthened with the two countries offering each other assistance and staunch support.

The past three years have marked a rapid increase in Saudi- China links. King Salman visited the country as part of a six-country Asian tour early in 2017, setting the seal on a “comprehensive strategic partnership” between the two
countries when he met Chinese President Xi Jinping.

A joint high-level committee was established to guide future economic development strategy.

That was followed by a later visit by Crown Prince Mohammed Bin Salman, adding greater depth to the relationship and further aligning the two countries’ main economic development plans — the Belt and Road Initiative by which China seeks to play a leading role in regional development, and the Vision 2030 strategy aimed at diversifying Saudi Arabia away from oil dependency.

China has also become the top export destination of Gulf Cooperation Council (GCC) petrochemicals and chemicals, accounting for about 25 percent of GCC exports.


At $180 billion, the GCC (GCC) trade with China accounts for over 11 percent of the bloc’s overall trade. In 2020, China became the GCC’s top trading partner, replacing the EU for the first time.

Related