China Stocks Hike As Trade War Progresses
Stock markets in China have make significant gains on Friday. The gains made by the Hang Seng have been attributed to US President Donald Trump comment that trade talks were “moving along nicely”.
The hike came after reports were made public hinting to progress being made on the U.S and China trade-war. The G20 summit later this month will see President Trump and China’s President Xi Jinping in talks. The G20 Summit event will be scrutinized heavily to see if any more progress is to be made on the trade-war.
In attempts to lower tensions surrounding the already-bitter trade-war, President Trump made a comment on the progress with China.
Trump tweeted this: “Just had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade,”.
The Chinese president, Xi Jinping, said that he was “very happy” to talk with President Trump once again, stating that he puts “great importance on good relationship with the president”, reported by Chinese state media.
Both the U.S and China have felt the impact of the trade-war, with each country imposing tariffs on billions of dollars worth of imported goods for the other country.
China Stock Market
Hong Kong’s Hang Seng Index hiked an impressive 3.9%, with the Shanghai Composite climbing 2.4% with the yuan increasing by around 0.5 percent.
This is evidence that the trade-talks with the United States are the greatest catalyst for the stock market.
U.S. stocks even hiked this week after a tough October. Analysts are citing the bounce-back as the product of a “strong economic backdrop” in the U.S. As of now, there is a four-day rally which is mainly due to tensions lowering around the China/U.S. trade war.
Alibaba co-founder warns that a full U.S. and China trade-war would severely hurt the U.S. economy.
Trade War Tariffs
President Trump has imposed tariffs on $250 billion worth of Chinese imports, he has also said that he may put duties on every product coming from China to the U.S. If Trump does put duties on all Chinese products coming in then the cost of consumer goods coming into the U.S would increase by billions of dollars. For the moment, the Trump administration has not imposed tariffs on consumer goods from China.
Washington and the Trump administration first initiated the trade-war duties as a direct response to alleged unfair practices by China. Once the U.S implemented import tariffs, Beijing soon followed.
A report from Bloomberg also stated that Trump has requested officials to start drafting a supposed trade agreement with China, no source was given for the information.
The South China Morning Post have also stated that President Trump offered to host a dinner for the Chinese president after the G20 summit event.
In conclusion, many analysts are still skeptical that the trade war will be ending any time soon.. despite alleged proposals being drafted. Trump told reporters that the United States is “close to doing something” with China to make trade between the two countries less strenuous.