China welcomes US trade talks
Economy speeding up: AMRO
THE economy seems to be expanding at a faster pace this year, with the Kingdom’s projected growth rate sitting slightly above last year’s seven per cent, a new assessment by the As e a n+ 3 Macroeconomic Research Office (AMRO) said.
This year’s strong momentum has been supported by robust construction activity, a steady garment sector and solid growth in tourism services.
AMRO’s assessment comes after an annual consultation visit by its specialists to Cambodia over a week this month.
It’s lead specialist Seung Hyun Hong said inflation remains relatively low and stable despite the expectations of faster economic growth.
“To maintain this strong momentum, the authorities need to strengthen their policy efforts to accelerate structural reforms, safeguard financial stability and reprioritise fiscal resources towards spending that enhances growth,” he said.
In its assessment, AMRO said the higher government spending was because of rising public investment while public sector wages will provide additional support for growth this year.
Inflation is projected to increase slightly to 3.1 per cent this year amid rising energy prices.
However, despite strong revenue growth, the budget deficit is expected to widen further. Given the rapid increase in public sector wages in recent years, pressure on rebalancing government expenditures will continue.
The report notes that the infrastructure gap remains large and spending on health and education is still relatively low.
CHINA welcomed on Thursday a US offer to hold fresh trade talks, adding that the two are discussing the details, providing some hope the world’s top two economies could step back from the brink of an all-out trade war.
The countries have been engaged in an escalating tit-for-tat trade fight for months but on Wednesday it emerged that US Treasury Secretary Steven Mnuchin had invited top Chinese officials to discuss the issue.
“The Chinese side believes that the escalation of the trade conflict is not in the interest of either party,” commerce ministry spokesman Gao Feng told reporters at a regular news briefing.
Beijing “has indeed received an invitation from the US and holds a welcoming attitude to it”, said Gao, noting the “two sides are still communicating on the specific details”.
News of the possible high-level talks comes as a new business survey released Thursday showed that the ma- jority of US firms in China are beginning to feel the pinch of the tit-for-tat trade battle.
The fight had looked like it would spiral further after US President Donald Trump last week threatened to impose tariffs on all $500 billion worth of imports from China.
Hopes for the resumption of negotiations sent Asian markets rallying with Hong Kong surging 2.5 per cent – having fallen for six straight days and into a bear market – and Shanghai more than one percent higher.
But analysts cautioned the two sides may still be far from coming to an agreement.
The Trump administration may not be fully aligned on the matter, with the US Trade Representative still seeming to want to apply pressure, while Beijing may not be ready to budge on its positions, economist Andrew Polk wrote in the Trivium China newsletter.
“We don’t think China has much more to offer than they already have, and the US doesn’t seem like it’s inclined to accept what is currently on the table,” Polk told AFP.
“We may be in for another round of disappointment,” Polk forecast of the “umpteenth round” of trade negotiations.
Trump imposed the first phase of tariffs this summer on $50 billion of Chinese exports, including high-end technology parts and manufactured goods, while Beijing fired back dollarfor-dollar at US soybeans, autos and other farm goods.