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China rebuffs Trump claim U.S. tariffs are making firms leave

Foreign investors remained enthusiastic about China, the foreign ministry said on Tuesday, following U.S. President Donald Trump’s claim that his tariffs are causing companies to move production away from the world’s second largest economy. Trump said in an interview aired on Sunday that his tariffs on Chinese goods are causing companies to move manufacturing out of China to Vietnam and other Asian countries, and added that any agreement to end a trade war with China cannot be a “50-50” deal. No further trade talks between top Chinese and U.S. trade ...

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ECB Plumbs Secret Data to Show Lending Boost From Negative Rates

European Central Bank researchers weighed into the debate over negative interest rates, arguing that driving rates below zero almost five years ago led to higher lending and boosted the economy. Citing confidential banking data, ECB economists said in a paper that lending to companies and households increased “significantly” among banks that were reliant on retail deposits for funding and held excess cash. The researchers also said subzero rates worked as an “empowerment” for the central bank’s bond-buying program, the other key pillar of its post-financial crisis policy. That program created ...

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UK firms likely to scrap planned investment on a no-deal Brexit – BoE’s Broadbent

British companies are likely to cancel projects that they have put on hold because of Brexit uncertainty if the country leaves the European Union without a deal to smooth the shock, Bank of England Deputy Governor Ben Broadbent said on Monday. Business investment fell throughout 2018 as companies waited for clarity on the terms of Brexit and grew only slightly early this year, a situation Broadbent described as “remarkable” given the economy was still growing and company profits were high. With just days to go before Britain was due to ...

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BOJ’s Kuroda issues fresh warning of broad fallout from trade war

Bank of Japan Governor Haruhiko Kuroda on Tuesday warned that escalating U.S.-China trade tensions could hurt business sentiment and inflict widespread damage on the economy. Worries that the United States and China were digging in for a longer, costlier trade war weighed on markets, adding to headaches for policymakers in Tokyo fretting about the impact on Japan’s export-reliant economy. “If trade tensions persist, they would have a widespread impact on global and Japanese economies via business sentiment and market developments,” Kuroda told parliament. “We hope the United States and China ...

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‘Still bullish’: Beijing hits back at Trump claim that US tariffs are forcing manufacturers out of China

Overseas investors are still enthusiastic about China, the foreign ministry said on Tuesday, following Donald Trump’s claim that US tariffs were forcing companies to move production out of the world’s second largest economy. On Sunday, Trump claimed that tariffs on Chinese goods were pushing manufacturers out of China and towards Vietnam and other Asian countries, and that any agreement to end his trade war with China cannot be a “50-50” deal. No trade talks between senior Chinese and US trade negotiators have been scheduled since the last round ended on ...

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China’s supply-side structural reform fosters new growth engines

In the face of complex domestic and international situations, China has been deepening supply-side structural reform resolutely since the beginning of this year. The country’s new progress in reform and opening up and structural adjustment is further consolidating its economic and social stability and promoting the ongoing shift of China’s economy toward high-quality development. PRECISE MEASURES PAY OFF To crack the problems of unbalanced and insufficient development, China has increased investment in the supply end to leverage the strong domestic market as a reform approach to stabilize demand. China in ...

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US-China Trade Talks Will End With a Deal, Former Negotiator Says

A former top US trade negotiator said talks with China for a trade deal had made significant progress despite recent setbacks and an agreement would eventually be reached. Clete Willems, deputy director of the White House’s National Economic Council until April, said China’s leadership includes figures that the US hopes will steer the country to more market-oriented policies to underpin a trade pact. “The president will maintain a strong sense of resolve because of the way the economy will look like in 10 years if these problems aren’t resolved.” Clete ...

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Brexit stockpiling boom ends for UK factories – CBI

British factories suffered the biggest fall in orders this month since late 2016, gearing down from their rush to stockpile before the original Brexit deadline in March and boding badly for the economy in the second quarter, a survey showed. The Confederation of British Industry said on Tuesday its monthly order book balance fell to -10 from -5 in April, below all forecasts in a Reuters poll of economists and its lowest level since October 2016. The CBI’s orders gauge, which is not seasonally adjusted, usually rises in May. Overall, ...

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China is plugging pension hole by tapping into US$25 trillion in equity in state-owned enterprises

Every month, Liu Yuan sets aside around 900 yuan (US$131), or 8 per cent, of his salary to be paid into the public pension fund, while his employer contributes about 2,000 yuan. These payments will guarantee the 33-year-old accountant of a construction company in eastern Shandong province a basic monthly pension payment of around 4,000 yuan a month when he retires in 25 years, all other things being equal. But starting this May, his employer can cut the mandatory contribution to his account by about 200 yuan each month, as ...

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Fed’s Williams Says It’s ‘Good’ Economy Can Have Strong Job Market Without Inflation

New York Fed leader John Williams said Monday the central bank’s views on how low the unemployment rate can go without sparking inflation have evolved. The fact the economy can operate with historically low unemployment levels without sparking inflation is “good,” Mr. Williams said at the end of a “Fed Listens” event held at his bank. The gathering was part of a series of events the central bank has been holding to solicit community views on central bank policy. Mr. Williams didn’t comment on the interest rate outlook. The current ...

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Hammond – Backing a ‘no deal’ Brexit means deliberately harming economy

British finance minister Philip Hammond will on Tuesday warn that those pushing for Britain to leave the European Union without a deal would be doing deliberate damage to the British economy. Nearly three years after the United Kingdom voted 52% to 48% in a referendum to leave the EU, it remains unclear how, when or even if it will leave the European club it joined in 1973. It is currently due to leave on Oct. 31, with or without a deal. In a speech to business leaders and politicians, Hammond ...

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Fed Chairman Powell Warns of Economic Risks From Rising Business Debt

Federal Reserve Chairman Jerome Powell said financial regulators must take seriously potential dangers that rising levels of business debt pose to the U.S. economy but said some comparisons to last decade’s subprime mortgage bubble overstate the risks. “Fifteen years ago, everyone was talking about whether households were borrowing too much,” Mr. Powell said in remarks prepared for delivery in Fernandina Beach, Fla., at a conference on financial markets. “Today everyone is talking about whether businesses are borrowing too much.” Views about the risks from rising corporate borrowing “range from ‘This ...

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Some euro zone banks need extra buffers amid slowdown – ECB

With euro zone growth slowing, several countries should force their banks to build extra capital buffers to mitigate the risk of unexpected shocks, European Central Bank Vice President Luis de Guindos said on Tuesday. “The slower growth momentum we are seeing increases the risk of tail events, in other words, shocks that are unlikely to occur, but would have a significant impact on the financial system and the economy if they did,” de Guindos told a conference in London. “The continued build-up of buffers could therefore be justified, especially in ...

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China calls out big state firms, others on pollution violations amid slowing economy fears

China has publicly accused dozens of firms, including some of its biggest state enterprises, of exceeding pollution limits and breaching monitoring standards, as concerns rise that the slowing economy is undermining a five-year war on pollution. In lists published by the Ministry of Ecology and Environment over the past week, subsidiaries of state giants such as China Baowu Steel Group and the Aluminum Corporation of China were cited and fined for breaching emissions standards among other violations. China has been stepping up its supervision capabilities and has plugged thousands of ...

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QE May Be Over, But the Fed’s U.S. Debt Hoard Is About to Soar

If you thought the Federal Reserve was done with quantitative easing, you might only be half right. As soon as next year, analysts say the Fed will resume large-scale buying of debt securities — this time just U.S. Treasuries — in amounts that may ultimately exceed its crisis-era purchases. According to an estimate by Wells Fargo & Co., the central bank’s balance sheet will rise past its historic peak as it adds over $2 trillion to its Treasury debt holdings in the next decade. Of course, it won’t be called ...

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