Post-elec­tion China bump

Daily Freeman (Kingston, NY) - - NATION + WORLD -

per­cent of the U.S. econ­omy. But many an­a­lysts dis­miss Trump’s tough talk as cam­paign rhetoric. Econ­o­mists at Bank of Amer­ica, for in­stance, think Trump won’t end up pur­su­ing poli­cies — such as im­pos­ing huge tar­iffs — “that would risk ig­nit­ing an im­me­di­ate trade war.” Chi­nese in­vestors ap­pear to agree. Still, the two coun­tries could clash over Bei­jing’s tum­bling cur­rency. The yuan has fallen to a six-year low against the dol­lar, giv­ing Chi­nese com­pa­nies a price ad­van­tage over com­peti­tors. But econ­o­mists say mar­ket forces are be­hind the drop, not cur­rency fix­ing. Seem­ing un­fazed by the elec­tion of Don­ald Trump — who has vil­i­fied China’s trade poli­cies — in­vestors have boosted the Shang­hai Com­pos­ite stock in­dex last week (week end­ing 11/11). Never mind that Trump has said he’d slap 45 per­cent taxes on Chi­nese im­ports, brand Bei­jing a “cur­rency ma­nip­u­la­tor” and pun­ish it with sanc­tions. China needs the U.S. mar­ket: Last year, it sold $483 bil­lion in goods to Amer­ica and bought just $116 bil­lion. China’s econ­omy is de­cel­er­at­ing, and ex­ports re­main a big part of its out­put: 22 per­cent, ver­sus just 13

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