Joseph Wang’s Post

In a speech last week Treasury Secretary Janet Yellen made it clear the Biden administration is not expecting any end to disagreements in the U.S.-China relationship, despite the relative warmth of the Xi-Biden meeting. While the U.S. “does not seek to decouple” from China, “we know that this relationship will face continued challenges. There are many areas on which the U.S. and China strongly disagree. There is also always the risk of shocks that impact both of our countries,” Yellen said in a speech at the U.S.-China Business Council’s 50th anniversary dinner. “We seek not to resolve all our disagreements nor avoid all shocks. This is in no way realistic. But we aim to make our communication resilient so that when we disagree, when shocks occur, we prevent misunderstanding from leading to escalation and causing harm.” Yellen also took aim at the Trump administration and specifically its China policy in her remarks. The Trump administration “failed to make investments at home in critical areas like infrastructure and advanced technology, while also neglecting relationships with our partners and allies that had been forged and strengthened over decades.” Trump policies on China “left America more vulnerable and more isolated in a competitive global economy that demands that nations take exactly the opposite approach.” “It damaged our global standing and meant significant missed economic opportunities for American firms and workers,” Yellen said. For a link to Yellen's full speech and more analysis of the US-China relationship, check out the latest edition of "Trade War":

It seems to be smiles all around in this weeks market update with China taking centre stage. But, what was the build up to this positive change and can the same be said for the rest of the world? Our Chief Economist, Rupert Thompson, explores these positive market shifts in this weeks update. #financialservices #wealthplanning #markets #equity #investmentmanagement #RupertsWeeklyUpdate https://lnkd.in/eVdDnR7P

Kamala And Trump Will Continue China De-Risking. Does That Make China A Turn-Off To Wall Street? https://ift.tt/rEvuyV9 Whether it’s Kamala Harris or Donald Trump at the helm of U.S. foreign policy in January 2025, one thing is likely: the continuation of a strategic decoupling from mainland China. That means Chinese companies outsourcing to or investing in factories in Southeast Asia and maybe even Mexico to keep their market share in the U.S. read more via Benzinga - Stock Market Quotes, Business News, Financial News, Trading Ideas, and Stock Research by Professionals https://ift.tt/u7hjfms August 08, 2024 at 12:16PM

Todays’s Financial Times article on China’s consumer challenges is worth reading (Why Xi Jinping is afraid to unleash China’s consumers). It also echoes a piece I wrote earlier this year - attached below. I have been focusing on the need for China to rethink policies to support growth, but also the challenges Xi faces in making those changes. (https://lnkd.in/e2gSpTqs).

◻️ Stock Take Since it was opened up and reformed in the late 1970s, China’s economy has grown at an average rate of 9% a year. Not this year. Facing strong disinflationary pressures, a severe property downturn and frail consumer confidence, China risks missing its own annual growth target of around 5%. So, as the week began, markets reacted enthusiastically to the People’s Bank of China unveiling a major package of aggressive measures designed to stimulate the economy. ◻️ Wealth Check With the UK Labour government’s first Budget scheduled for 30 October, speculation is rife about what it might include. What any changes will mean for everyone is yet to be fully understood and unless there are significant leaks in advance, we won’t know the detail until the day. ◻️ Last Words "I am a mountain climber, but the bag that I have been given is not light." Austrian far-right leader Herbert Kickl hails last week’s election, which saw his Freedom Party win 29% of the vote, more than any other political group. To read more about this week's finance updates click here: https://lnkd.in/edZ9Z3UT #finance #news #insights #weekwatch

Earlier this week, Xi fired #China’s top #markets #regulator at the China Securities Regulatory Commission, replacing him with the “Broker Butcher,” Wu Qing, known “for cracking down on traders in the mid-2000s,” Bloomberg reported. “Xi's involvement predictably produced a personnel change, showing that the impulse at the political level is to tighten administrative controls rather than address core challenges. The lack of clarity on policy direction and the bias toward control and security-oriented policy will continue to weigh on confidence and disappoint expectations, entrenching a sense of economic malaise,” analysts at the Eurasia Group said. Outdated playbook If only the loss of a high-profile position in China’s top-heavy financial system was the worst that could befall a comrade. CNN last week reported Tian Huiyu, ex-president of China Merchants Bank and former right-hand to Wang Qishan, China’s former vice president, was given a suspended death sentence on charges of bribery and insider trading. Wang, a reformer, has long-standing ties to the biggest #WallStreet #bankers, like #GoldmanSachs, and, according to The Wire China, was “one of Xi Jinping's closest deputies” until he was pushed aside in 2022. In his Rhodium Group post, Logan Wright gave a laundry list of economic issues in need of “some form of policy clarity from Beijing." None of them included a prescription to continue “killing the chicken to scare the monkey.” And in China Path Finder, a Rhodium Group - Atlantic Council publication, Daniel H. Rosen and Rachel Lietzow reminded that “Beijing also simultaneously threatened #economists with consequences for even talking about bearish signals and discontinued unflattering economic data, severely aggravating credibility concerns.” “Policymakers did next to nothing to tackle the real structural problems. Though we expect the severity of 2022–23 declines to set China up for a modest cyclical rebound in 2024, long-term growth potential will disappoint until fundamentals are addressed,” they said. #news #business #geopolitics  **** ➡️ For a weekly recap of China news, sign up for the China Boss newsletter here: https://lnkd.in/epPpY4f 😏 Have a great weekend. 🥞

With the unprecedented uncertainties the global economy faces in 2024, China's financial sector stands at a critical point. At the 2024 China and Global Economic Forum, experts gathered to discuss the complex challenges, from stock market reforms to sustainable economic growth. As digital technology and AI create new opportunities, fostering transparency, rule of law, and trust within financial systems is essential for China to strengthen its role in the global economy and build towards a financial powerhouse by 2035. Full article: https://lnkd.in/eW-dv89f

Although Beijing's stimulus measures aim to boost market performance, experts caution that sustained economic growth driven by demand is essential, and that issues like a weakened property market and lack of consumer demand are unlikely to be resolved through short-term stock gains. Critics also argue that #China's leaders lack the WILL and POWER for meaningful reform and rely on market interventions rather than addressing structural issues. Meanwhile, China’s overleveraged local governments are grappling with the new challenge of rapidly increasing OUTBOUND #investment, prompting calls to counter the hollowing out of Chinese industries. My top story is free to read. If you like it, please share. 🙂 Have a great weekend. ⛪🤵👰♀️ #news #business #investors

https://lnkd.in/dVn8Vu22 Why is China mixing its economic messages when business confidence is so low? Regulator reversals and empty government rhetoric will make it even harder to restore near-term business confidence, analysts say Beijing’s ‘twists and turns’ raise questions about government alignment as pressure mounts to shore up economy Jane Cai Sylvie Zhuang 30 Jan, 2024

Latest Deutsche Bundesbank’s Monthly Report on risks facing Germany as a result of its economic ties with China by colleagues and myself. Key messages: ▪️Economic crisis in China manageable, however abrupt decoupling likely to dwarf the costs of the far-reaching separation from Russia. ▪️There are also potentially considerable risks for the German financial financial system. Especially large, significantly important banks exhibit large exposures to companies with close economic ties to China. https://lnkd.in/eyYSZH_q