China Market touches two-and-half-year low

The Mainland China equity market declined to two-and-half-year low on Friday, 17 August 2018, as risk aversion selloff continued amid worries about an economic showdown. Investors were hardly impressed by the news on Thursday that a Chinese delegation led by Vice Minister of Commerce Wang Shouwen will meet U.S. representatives as such lower-level talks alone are unlikely to resolve the ongoing trade dispute. At closing bell, the benchmark Shanghai Composite Index declined 1.34%, or 36.23 points, to 2,668.97, meanwhile the Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 1.7%, or 24.73 points, to 1,442.38. The blue-chip CSI300 index slipped 1.44%, or 47.11 points, to 3,229.62.

A Chinese delegation, led by Vice Minister of Commerce Wang Shouwen, will visit the United States late this month for talks on bilateral economic and trade issues, the Ministry of Commerce announced yesterday. Wang is also the deputy China international trade representative. The American delegation will be led by David Malpass, under secretary for international affairs at the US Department of the Treasury.

China has reaffirmed its stance of opposing unilateralism and trade protectionism, and not accepting any forms of unilateral restrictive trade measures, according the China commerce ministry. China welcomes dialogue and communication on the basis of reciprocity, equality and integrity, according to the statement.

The last official round of talks was held in early June when Chinese Vice Premier Liu He met US Commerce Secretary Wilbur Ross in Beijing. Liu had met with US Treasury Secretary Steven Mnuchin in Washington a month earlier. The upcoming meeting in the US will be held at a lower-level compared with four earlier rounds of talks.

The US Treasury Department, led by Mnuchin, has been viewed as most opposed to tariffs among key Trump administration agencies, espousing a more moderate approach to China than trade hardliners such as the USTR's Robert Lighthizer. After negotiations in Washington in May, Beijing believed it had assurances from the US that tariffs were off the table, with Mnuchin saying the trade war and tariffs were on hold. But less than 10 days later, the White House said it would push forward on planned tariffs on US$50 billion of Chinese imports and press ahead with restrictions on investments by Chinese companies in the US.

NEWS FROM THE PRESS: Foreign direct investment into the Chinese mainland rose 2.3% year on year to 496.7 billion yuan (US$72.2 billion) in the first seven months of 2018, according to the Ministry of Commerce data showed on Thursday. In dollar terms, FDI inflow grew 5.5% to US$76 billion in the period. In July alone, FDI inflow rose 14.9% year on year to 50.4 billion yuan.

CURRENCY NEWS: China's yuan firmed against the dollar on Friday, inline with firm mid-point fixing by central bank and as news of renewed U.S.-China trade talks. The People's Bank of China (PBOC) strengthened 52 basis points to 6.8894 against the U.S. dollar Friday

Powered by Capital Market - Live News