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Tag Archives: China

Watch out for China’s currency in case of no-deal scenario

The U.S. and China’s negotiations on a phase-one deal seem to have stalled again. The market was already aware of the limited nature of the likely deal, but was still hoping for it. Against this backdrop, the investors have reacted negatively to the increased likelihood of not reaching a deal on December 15. If this is the case, the U.S. will apply additional tariffs on Chinese imports. The obvious question to address, thus, is, what can happen to China under such a scenario?We first need to...

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The European Union-Russia-China energy triangle

Concern is growing in the European Union that a rapprochement between Russia and China could have negative implications for the EU.This Policy Contribution is a version of a paper prepared for the seminar ‘Trade relations between the EU, China and Russia’, co-organised by the Delegation of the European Union to Russia and Bruegel with the support of the EU Russia Expert Network on Foreign Policy (EUREN). The seminar was funded by the European Union. The content of this paper is the sole...

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Manufacturing employment, international trade, and China

The decline in manufacturing employment is often seen as a major reason for rising inequality, social tensions, and the slump of entire communities. With the rise of national populists and protectionists in recent years, the issue has become even more prominent.The objective of this paper is to better understand the evolution of manufacturing employment across the world. Manufacturing value added has grown rapidly since 2000, at least matching world GDP growth, even after the global financial...

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How does China fare on the Russian market? Implications for the European Union

China’s economic ties with Russia are deepening. Meanwhile, Europe remains Russia’s largest trading partner, lender and investor. An analysis of China’s ties with Russia, indicate that China seems to have become more of a competitor to the European Union on Russia’s market. Competition over investment and lending is more limited, but the situation could change rapidly with China and Russia giving clear signs of a stronger than ever strategic partnership.This paper was prepared for the seminar...

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Why sentiment in Greater Bay Area is deteriorating, especially in Hong Kong

Lack of concrete plans affects sentiment after brief surge on announcement of Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay AreaThe slowing Chinese economy and US-China trade war are part of the reason Hong Kong’s economy is decelerating rapidly, and the recent social unrest has only aggravated the situation. Among all the uncertainties, an important announcement for Hong Kong and Guangdong province was made in February 2019, namely the Outline Development Plan for...

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Upbeat outlook from Chinese banks’ profits masks growing problems for small banks

The performance of Chinese banks has been resilient so far, despite decelerating growth. While the performance of large banks remained steady, the rebound came from small banks. Why have small banks rebounded and is the rebound sustainable?Although growth is decelerating, the performance of Chinese banks has been resilient so far. Net profits of listed banks grew robustly in Q3 2019, higher than the same period in 2018. Such general improvement was also backed by a reduction in provisioning...

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Why investors should temper optimism over a China trade rally

The economy is in worse shape than in 2015 and policies to boost growth are not as effective as they once wereTuesday’s rally in the renminbi was triggered by positive noises coming from the White House, raising hopes that the US may open the door to a trade deal with China, perhaps within weeks. The market moves saw the Chinese currency at one point strengthening past the seven-per-dollar mark.But investor optimism should be tempered. The world’s second-biggest economy remains in a tight...

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China’s growing presence on the Russian market and what it means for the European Union

The European Union’s relationship with Russia is strained, but the two economies are nevertheless highly intertwined. A huge share of Russia’s exports go to the EU, while in the early 2000s, EU countries supplied more than half of Russia’s imports. The EU is also a major investor in, and lender to, Russia.Russia doesn’t just look West, it looks East – and increasingly so. China’s economy has developed very rapidly over the past two decades, becoming the world’s largest exporter from a low...

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Bolsonaro’s pilgrimage to Beijing

A strategic alliance between Brazil and China could be music to the ears for both leaders, but Bolsonaro does not want to look like one more vassal. Xi Jinping might need to think of a more exclusive offer to the President of the largest economy in Latin America.In his first official visit to China, Brazil’s President Bolsonaro will need to change his aggressive tone on China during his election campaign last year. In fact, from the mantra he kept them that “China wants to buy Brazil”,...

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The US-China trade war: Risks and opportunities for the EU and the United Kingdom

The trade war between the United States and China has already had an impact on European economies. And as Robert Basedow explains, with the conflict centred on global economic and political leadership, it is unlikely to be resolved in the foreseeable future. This will create important challenges and opportunities for both the EU and the UK in the coming years, as geopolitical considerations and power politics come to play a greater role in the world economy. The world’s two biggest economies...

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