TALKS ‘GOING VERY WELL’

U.S. President Donald Trump on Friday sounded an optimistic note about trade negotiations with China as

THE WEAKER YUAN

Economists say one factor helping keep up Chinese exports this year is that the yuan has weakened more than 5 % against the dollar, helping to make Chinese products more competitive abroad.

Jonas Short, head of the Beijing office of brokerage Everbright Sun Hung Kai, said the weaker yuan “should boost industrial exports over the coming months. Typically there is a six-month lag between the value of industrial export orders and currency movements.”

Economists in recent months have penciled in a deterioration in China’s export outlook in 2019, factoring in higher U.S. tariffs on a wider range of Chinese goods.

Chinese policy makers are expected to offer more policy support and deliver more support measures if domestic and external conditions continue to deteriorate.

China’s central bank has cut the amount of cash that banks must hold as reserves four times this year, as policy makers seek to steady the slowing economy amid the trade war with the United States.

The government aims for growth of around 6.5 % this year, compared with 2017’s 6.9 % pace.

Yang Yewei, an analyst at Southwest Securities in Beijing, said that as global demand cools, “domestic growth-boosting measures should be more effective”. —