Stocks rise on Us-china op­ti­mism

Marlborough Express - - FRONT PAGE -

Three days of Us-chi­nese talks aimed at end­ing a costly tar­iff bat­tle wrapped up yes­ter­day in an op­ti­mistic at­mos­phere af­ter Pres­i­dent Don­ald Trump said they were ‘‘go­ing very well!’’

No de­tails were im­me­di­ately an­nounced, but stocks rose af­ter talks planned for two days were ex­tended to three. Hong Kong’s main mar­ket in­dex closed up 2.1 per cent and Tokyo’s rose 1.1 per cent.

The talks that started on Tues­day were the first face-to-face meet­ings since Trump and his Chi­nese coun­ter­part, Xi Jin­ping, agreed on De­cem­ber 1 to sus­pend fur­ther ac­tion against each other’s im­ports for 90 days while they ne­go­ti­ate over US com­plaints that Bei­jing steals or pres­sures com­pa­nies to hand over tech­nol­ogy.

‘‘Talks with China are go­ing very well!’’ Trump said on Twit­ter.

Wash­ing­ton wants Bei­jing to change plans for gov­ern­ment-led cre­ation of Chi­nese lead­ers in ro­bot­ics and other ad­vanced tech­nolo­gies.

Chi­nese of­fi­cials have suggested Bei­jing might al­ter its in­dus­trial plans but re­ject pres­sure to aban­don what they con­sider a path to pros­per­ity and global in­flu­ence.

Nei­ther side has given any in­di­ca­tion its ba­sic po­si­tion has changed. Econ­o­mists say the 90-day win­dow is too short to re­solve all the con­flicts be­tween the big­gest and sec­ond-big­gest global economies.

Chi­nese ex­ports to the US have held up de­spite tar­iff in­creases of up to 25 per cent on US$250 bil­lion (NZ$369B) of Chi­nese im­ports, partly due to ex­porters rush­ing to fill orders be­fore more in­creases hit. Fore­cast­ers ex­pect Amer­i­can orders to slump this year.

China has im­posed penal­ties on US$110B of Amer­i­can goods, slow­ing cus­toms clear­ance for US com­pa­nies and sus­pend­ing is­su­ing li­cences in fi­nance and other busi­nesses.

Bei­jing has tried to defuse pres­sure from its trad­ing part­ners for more sweep­ing changes by of­fer­ing con­ces­sions on in­vest­ment reg­u­la­tions and step­ping up pur­chases of Amer­i­can soy­beans, nat­u­ral gas and other ex­ports.

How­ever, the of­fi­cial Trump put in charge of the talks, US Trade Rep­re­sen­ta­tive Robert Lighthizer, has fo­cused on press­ing Bei­jing to scrap or change rules Wash­ing­ton says block mar­ket ac­cess or im­prop­erly help Chi­nese com­pa­nies.

US com­pa­nies also want ac­tion on Chi­nese poli­cies they com­plain im­prop­erly favour lo­cal com­pa­nies. Those in­clude sub­si­dies and other favours for high-tech and state-owned in­dus­try, rules on tech­nol­ogy li­cens­ing and pref­er­en­tial treat­ment of do­mes­tic sup­pli­ers in gov­ern­ment pro­cure­ment.

The US de­mands strike at the heart of a state-led de­vel­op­ment model the rul­ing Com­mu­nist Party sees as a great suc­cess over the past three decades and is re­luc­tant to give up.

AP

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