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China’s slowdown is ‘self-inflicted,’ not caused by Trump’s tariffs: Yale’s Stephen Roach

U.S. President Donald Trump may like to think that his tariffs are hurting the Chinese economy, but one leading economist said the slowdown in China is actually mostly “self-inflicted.” “There’s downward pressure on the Chinese economy. A lot of it is self-inflicted due to the so-called deleveraging campaign and the tariffs imposed by the U.S. are re-enforcing that downside but by no means the major source of downward pressure,” Stephen Roach, a senior fellow at Yale University, told CNBC’s Sri Jegarajah on Friday. The U.S. and China — the two ...

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In foreboding sign for U.S. economy, factory sector softens

U.S. manufacturing activity unexpectedly cooled in March, a troubling sign for the economy although the housing market showed signs lower interest rates were giving it a boost. Financial data firm Markit’s purchasing managers index for U.S. manufacturing fell to 52.5 in March, its lowest level since June 2017. Both new orders and output softened. Analysts polled by Reuters had expected the gauge to strengthen to 53.6 from 53.0 in February. Readings above 50 point to growth in the sector. The slowdown in U.S. manufacturing is part of a global trend ...

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As China’s economic growth engine slows, is its war on pollution losing steam?

This winter, 39 cities across northern China, including the Beijing-Tianjin-Hebei megalopolis and the Fenwei Plain, experienced alarming surges in air pollution. The uptick in smog means these heavily polluted areas are now unlikely to meet their annual air quality targets. Beijing’s gambit to relax anti-pollution curbs in the face of economic pressures, particularly trade tensions with the US, has not helped. In February, average levels of PM2.5 – hazardous ultra-fine airborne particles, known to cause cancer and respiratory disease – in the region increased by 40 per cent to a ...

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Beneath Fed’s positive spin, an embrace of a tepid future

Federal Reserve policymakers see a U.S. economy that is rapidly losing momentum. They predict inflation will miss their 2 percent target for yet another year, despite rising wages, and they expect unemployment to increase. Fed Chairman Jerome Powell’s view of it all? He calls these fundamentals “very strong,” says the economy is in a “good place and sees the outlook as “favorable.” Welcome to the new normal. Powell’s upbeat assessment of a deteriorating economy shows how completely the Fed has embraced a world of stubbornly weak inflation, permanently slower growth ...

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Fitch cuts India GDP growth forecast for FY20 to 6.8%

Fitch Ratings cut India’s economic growth forecast for the next financial year starting April 1, to 6.8% from its previous estimate of 7%, on weaker than expected momentum in the economy. “While we have cut our growth forecasts for the next fiscal year (FY20, ending in March 2020) on weaker-than-expected momentum, we still see Indian GDP growth to hold up reasonably well, at 6.8%, followed by 7.1% in FY21,” Fitch said in its Global Economic Outlook. Fitch Ratings cut India’s FY19 GDP growth forecast to 7.2% from 7.8% on December ...

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UK economy dodges no-deal Brexit hit, for now

Britain’s economy has struggled beneath the weight of Brexit uncertainty for nearly three years, but many business leaders would probably be relieved just to have more of the same for the next few months. The risk of a damaging no-deal exit by the world’s fifth-biggest economy from the European Union on March 29 has been averted by the reprieve granted to Prime Minister Theresa May by other EU leaders on Thursday. But the possibility could return as soon as April 12. Or the delay could stretch into May or beyond, ...

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Hong Kong or Singapore: who to trust on China’s belt and road disputes?

China’s multibillion-dollar Belt and Road Initiative includes some of the world’s most complex infrastructure projects – ports, pipelines and railways stretching from Beijing to Berlin. As the initiative intensifies, so too have the legal disputes between investors, foreign governments and Chinese players, making the rules about how disputes are decided more important than ever. Hong Kong and Singapore, two of the world’s most trusted centres for resolving international legal disputes, are competing to be the location of choice for settling belt and road disputes. Hong Kong’s major international arbitral institutions, ...

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China and EU seek common ground on environmentally friendly green bonds

Even as disputes in their bilateral relationship pile up, officials from China and the European Union hope to find common ground on one key global issue: issuance standards for “green” bonds dedicated to financing environmentally friendly projects. Officials from China and the EU – the second and third-biggest issuers of green bonds after the United States – are due to start talks in Brussels on Thursday to decide on standards for the increasingly popular investment vehicle. An agreement would boost the credibility and the appeal of the bonds for increasingly ...

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China may miss out on $5.5 trillion in growth if it doesn’t take data privacy more seriously

If China doesn’t step up its efforts on issues such as data privacy and intellectual property protection, the country could lose out on a 37 trillion yuan ($5.5 trillion) growth opportunity in the decade ahead, according to new analysis. Based on research from economics consulting firm AlphaBeta, the report published Thursday by the nonprofit Hinrich Foundation found that China’s 2017 flows of digital data contributed 3.2 trillion yuan of value to the domestic economy, and 1.6 trillion overseas. By 2030, the analysts expect growth in such digital trade, especially in ...

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EU wants better, reciprocal access to Chinese market

The European Union, China’s biggest trading partner, wants better access to Chinese markets and for European companies there to be treated in the same way as Chinese firms in Europe, EU leaders said on Friday. “Our aim is to focus on achieving a balanced relationship, which ensures fair competition and equal market access,” the chairman of EU leaders Donald Tusk told a news conference. “We hope to persuade China to include industrial subsidies as a crucial element of WTO reform,” he said. EU leaders will hold a summit with China ...

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How Brexit could impact economies around the world

With a Brexit deadline currently set for March 29, the global economy is becoming anxious about the outcome. The UK might leave the EU next week, or it might be a couple of years down the line. It is also possible that Brexit may not happen at all. Of course, the UK and EU countries care most about the ultimate outcome, but the rest of the world has an interest too. There are some important reasons why countries and corporations around the globe hope that Brexit never happens. The existing ...

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Fueled by Strong Economy, U.S. Labor Force Defies Projected Declines

The U.S. labor-force participation rate has defied predictions of demographic-driven declines thanks to a strong economy that is pulling in and retaining more workers. The rate’s trajectory from here will have big implications for a range of issues, including how fast the economy can grow, how much inflation it generates in the process and whether the Federal Reserve will continue to feel comfortable keeping interest rates so low. Since bottoming out in September 2015, the share of the population aged 16 and over working or looking for work has stabilized ...

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Fed may raise rates, or cut them, Bostic says

The Federal Reserve’s patient approach to monetary policy does not mean the U.S. central bank will not increase interest rates, or cut them, should the need arise, the president of the Atlanta Federal Reserve Bank, Raphael Bostic, said. “We may move up; we may move down,” Bostic said in remarks prepared for delivery to a monetary policy conference at the San Francisco Fed. The comments were Bostic’s first since the Fed made an unexpectedly dovish shift on Wednesday. Eleven of its 17 policymakers forecast no rate hikes this year, and ...

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Inflation Weakness Pushes Central Bankers Closer to Reversal

Central banks from the U.S. to Asia are turning dovish as they increasingly fret about getting inflation to pick up in a bruised global economy. Fed Chairman Jerome Powell effectively extended the U.S. central bank’s pause on interest-rate increases on Wednesday, even opening the possibility that the next move could be a cut. On Thursday, central banks in Indonesia and the Philippines — among the most aggressive rate hikers last year — kept policy on hold, as did the Swiss National Bank. Global growth is under pressure after a sharp ...

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How A Chaotic Brexit Has Been Great For Britain’s Economy

Wow! The U.K. parliament has been unproductive since the Brexit referendum in June 2016. But judging by the economic results perhaps we should want more of the same. Here’s what you need to know. By most economic measures Britain’s economy is performing far better than comparable economies across the channel in mainland Europe. It may be no coincidence that the country’s outperformance comes precisely while Britain’s government has been bogged down in endless no progress negotiations with the European Union about leaving the bloc. Despite a colossal focus by the ...

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