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Why consumers should expect higher prices for a lot of things this summer

Geopolitical tensions around the world are converging and could soon create pain for consumers in the forms higher prices on stores shelves and at the gasoline pump. Barely a week after the Trump administration slapped higher tariffs on $200 billion of Chinese goods, both sides dug in their heels. The prospect of a prolonged trade war, and competing bilateral tariffs, has created alarm among economy watchers and big companies. This week, Walmart warned that higher prices would translate into higher costs for its customers. The largest U.S. retailer echoed the ...

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China has a willing partner in India on the belt and road, but only on fair and open terms

China’s multibillion-dollar infrastructure development plan, the Belt and Road Initiative, straddles three continents, with over 80 countries expressing an interest in the projects. It is estimated that China has already pumped US$200 billion into the initiative. In spite of US misgivings, many of its own allies, including the UK and Italy, have shown a willingness to be part of the initiative. There are indications that more members of the European Union will join. Many Asian nations are part of the initiative. India, however, in spite of repeated overtures from China, ...

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Brexit must not hold back financial sector – UK City minister

Parliament’s impasse over Brexit must not be allowed to hold back Britain’s financial services, City minister John Glen said on Monday. The financial sector’s traditional strengths were in good health, but the “slow and frustrating” process of seeking a deal on Britain’s departure from the European Union remained a shadow, Glen said. “The City wants and frankly deserves certainty,” Glen said, “We can’t allow the impasse of this parliament to hold the City back.” Source: Reuters (Reporting by Huw Jones and Andrew MacAskill)

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European financial system remains fragile, fragmented – ECB’s De Cos

The European financial system remains fragile and fragmented due to the close relationship between sovereigns and banks, European Central Bank policymaker and Governor of the Bank of Spain Pablo Hernandez de Cos said on Monday. “Investment portfolios are not well diversified and investment opportunities are lost as these may not always be matched with savers’ funds. The financial system remains fragile and fragmented because of the doom-loop between sovereigns and banks,” de Cos said during a conference in London. The EU still lacks the necessary fiscal tools to cushion against ...

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Bundesbank Expects German Economy to Stagnate in 2Q

Germany’s economy is likely to stagnate in the current quarter as the nation’s large manufacturing sector wrestles with a downdraft in global demand, the German central bank said. The downbeat assessment of Europe’s largest economy contrasts with relatively solid first-quarter growth data published last week, which showed a 0.4% expansion in the three months through March, driven by vibrant private consumption and a booming construction sector. The Bundesbank warned Monday, however, that the first-quarter rebound was due mainly to one-off factors that are likely to lapse or even reverse. They ...

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Weak spending overshadows Japan’s surprise first quarter economic expansion

Japan’s economic growth unexpectedly accelerated in January- March, driven by net contributions from exports and defying forecasts for a contraction in the world’s third-largest economy. However, the surprise expansion was mostly caused by imports declining faster than exports, likely reflecting weak domestic demand, a point of concern for policymakers with a planned sales tax hike scheduled to take effect in October. Underscoring this challenge were private consumption and capital expenditure readings, which both fell in the first quarter, while exports suffered the biggest fall since 2015. Japan’s economy grew at ...

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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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London office building at post Brexit referendum high – Deloitte

New office building in central London is at a three-year high, with 13.2 million square feet of space under construction, up 12% on the figure six months ago, Deloitte Real Estate’s London Office Crane Survey said on Monday. “London’s office market remains resilient in the face of uncertainty as we witness an encouraging increase in new construction starts,” said Mike Cracknell, director at Deloitte Real Estate. “This is testament to developers’ continued confidence in London’s office leasing market long-term.” Some 55% of the office space under construction was already let ...

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‘Not on my watch’: China won’t be number one in the world, says Donald Trump

US President Donald Trump has vowed that China will not become the world’s top superpower under his watch. In an interview with Fox News Trump said he was “very happy” with the trade war. “We’re taking in billions of dollars,” he said, when asked about the endgame in the trade conflict. “China is obviously not doing well like us.” Trump’s comments signal he is in no rush to get back to negotiating with Beijing after talks to end the trade conflict fell apart earlier this month. He has since raised ...

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Trade war catastrophic for U.S. jobs, consumers

As an ancient Chinese saying goes, “The tree desires peace but the wind keeps blowing.” On May 10, the Chinese delegation visiting Washington brought sincerity for reaching a trade deal, along with a constructive attitude to resolving trade friction between China and the U.S. What is disappointing, yet somewhat customary, is that U.S. President Donald Trump seemed to have entered yet another psychotic episode, and decided to up the ante on protectionist measures. He made it clear by imposing a 25-percent tariff on the remaining 320 billion U.S. dollars’ worth ...

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Big Companies Tightened Spending as Trade Fears Intensified

Spending on factories, equipment and other capital goods slowed in the first quarter among a broad cross-section of large, U.S.-listed firms, highlighting investor concerns that a key driver of economic growth is fading. Capital spending rose 3% from a year earlier in the first quarter at 356 S&P 500 companies that had disclosed figures in quarterly regulatory filings through midday May 8, according to an analysis by The Wall Street Journal of data supplied by Calcbench, a provider in New York and Cambridge, Mass. That is down from a 20% ...

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Here Is How China Is Really ‘Paying’ For Tariffs

As the trade war escalates, China will absolutely be paying a higher price. President Trump says China tariffs have given the U.S. government billions of dollars in new revenue. He’s half right. Of course, higher tariffs on Chinese imports are a new revenue stream for the government. But China is not paying for it, U.S. companies are. Everyone knows that. American consumers might be next to pay the price, as Walmart executive said recently. But in a roundabout way, China is “paying” for tariffs. They are not paying the port ...

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China’s capital market to stay healthy in the long run

China’s solid economic fundamentals, increased appeal to foreign investors and strengthened market regulation will ensure a healthy capital market in the long term despite short-term fluctuations. As of May 16, China’s benchmark Shanghai Composite Index has plunged 8.96 percent from the peak level this year. Meanwhile, net capital outflow under the northbound trading of the “Stock Connect” programs between the Shanghai and Hong Kong exchanges and the Shenzhen and Hong Kong exchanges totaled 30.71 billion yuan (about 4.46 billion U.S. dollars) and 18.08 billion yuan respectively since April, under the ...

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U.S. recession risk rises as U.S.-China trade tensions heat up – Reuters poll

Over the last month the U.S.-China trade war has boosted the risk of a U.S. recession, say a strong majority of economists polled by Reuters, who now put the chances of that happening in the next two years at 40%. That is up from a median 35% in last month’s poll, the first time it had dipped slightly from where it held since December last year, before a crushing sell-off on Wall Street as 2018 came to a close, in part because of those worries. U.S. President Donald Trump has ...

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China faces possible hit to credit rating if the trade war isn’t resolved

Escalations in its trade dispute with the U.S. not only could dent China’s economy but also impact its credit standing, according to ratings agencies. China’s credit remains strong despite a weakening economy and a high-stakes tariff battle it is engaged in with the U.S. However, should the impasse linger on, the damages could become greater and start having some deeper impacts. “The tariff war is negative for China especially at a time when its policy makers are battling problems of rising debt and increasing leverage in its economy,” analysts at ...

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