China's Xi Warns 'No Winners' in Trade War with US

A man rides a bicycle past a giant screen showing news footages of Chinese President Xi Jinping attending a Chinese Communist Party politburo meeting, in Beijing, China December 9, 2024. REUTERS/Tingshu Wang
A man rides a bicycle past a giant screen showing news footages of Chinese President Xi Jinping attending a Chinese Communist Party politburo meeting, in Beijing, China December 9, 2024. REUTERS/Tingshu Wang
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China's Xi Warns 'No Winners' in Trade War with US

A man rides a bicycle past a giant screen showing news footages of Chinese President Xi Jinping attending a Chinese Communist Party politburo meeting, in Beijing, China December 9, 2024. REUTERS/Tingshu Wang
A man rides a bicycle past a giant screen showing news footages of Chinese President Xi Jinping attending a Chinese Communist Party politburo meeting, in Beijing, China December 9, 2024. REUTERS/Tingshu Wang

Chinese President Xi Jinping warned Tuesday that there would be "no winners" in a trade war with the United States and vowed the country would hit its growth goals for the year.

Former US president Donald Trump -- who returns to the White House next month -- unleashed a grueling trade war with China during his first term in office, lambasting alleged intellectual property theft and other "unfair" practices.

He has pledged to impose even higher tariffs on China after taking office on January 20, as Beijing is grappling with a shaky post-pandemic economic recovery.

"Tariff wars, trade wars, and technology wars go against historical trends and economic rules, and there will be no winners," Xi said of China-US relations while meeting several heads of multilateral financial institutions in Beijing, according to state broadcaster CCTV.

"China is willing to maintain dialogue with the US government, expand cooperation, manage differences and promote the development of China-US relations in a stable, healthy and sustainable direction," AFP quoted Xi as saying.

Beijing is targeting annual growth this year of around five percent, despite sluggish domestic consumption, high unemployment and a prolonged crisis in the vast property sector.

Xi also said during Tuesday's meeting that China had "full confidence" in achieving its 2024 growth goal, state media reported.

His remarks came as official data showed the country's exports rose last month at a slower rate than expected while imports shrunk further, underscoring the challenges China is still facing.

The latest reading reinforced the need for more support a day after top officials pledged to bolster stuttering growth.

Overseas shipments this year have represented a rare bright spot in the Chinese economy, with domestic spending mired in a slump and persistent woes in the property sector spooking investors.

Exports jumped 6.7 percent on-year to $312.3 billion last month, China's General Administration of Customs said.

But the figure was much slower than the 8.7 percent anticipated by economists in a Bloomberg survey and well down from the 12.7 percent leap in October, which was the strongest in more than two years.

The data showed exports grew 5.4 percent on-year in January-November.

"China's exports were perhaps the biggest upside surprise for the economy in 2024," wrote Lynn Song, chief economist for Greater China at ING.

This is "one of the main reasons China is set to achieve its 'around five percent' growth target" for this year, he added.

Analysts have suggested the recent surge in shipments is because foreign buyers fearing another trade standoff were racing to beat any possible tariffs on Chinese goods by Trump.

"We could see some frontloading of exports in the coming few months but momentum is likely to soften after this is done, unless the outcome of tariff negotiations is surprisingly positive," wrote Song.

The 3.9 percent drop in imports last month extended a slide in the previous month -- and was much worse than the 0.9 percent rise forecast -- as domestic demand continues to be dampened by lacklustre consumer spending.

The readings come as investors closely watch signals from Chinese leaders, who are convening this week in Beijing for a series of key meetings on economic planning for the coming year.

The Politburo, China's top decision-making body, on Monday urged "vigorous" support for consumption and a loosening of monetary policy in 2025.

But observers are still waiting for the announcement of specific policies, particularly any measures to significantly bolster consumption.

Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, said in a note that another key meeting on economic policy -- expected to take place in the coming days -- could "shed more light, particularly on the fiscal policy front.”



Dollar Hits 2-week Low as Traders Ponder Trump Tariff Plans

A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
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Dollar Hits 2-week Low as Traders Ponder Trump Tariff Plans

A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo

The dollar touched a fresh two-week low on Wednesday, as a lack of clarity on President Donald Trump's plans for tariffs kept financial markets guessing and left the greenback struggling to regain ground against major currencies. Trump said late on Tuesday that his administration was discussing imposing a 10% tariff on goods imported from China on Feb. 1, the same day that he previously said Mexico and Canada could face levies of around 25%.

He also vowed duties on European imports, without providing further details.

Despite those threats, a lack of specific plans from Trump's first day in office saw the dollar start the week with a 1.2% slide against a basket of major peers. It stabilized on Tuesday, ending flat after an attempted rebound fizzled, with US officials saying any new taxes would be imposed in a measured way. The dollar index, which tracks the currency against six top rivals, touched its lowest since Jan. 6 at 107.75 on Wednesday, paring an earlier rise in the index. It was last down 0.15% at 107.97.

"Tariffs have again grabbed the headlines overnight as Trump commented in the evening that his threat of a new 10% tariff on China was still on the table...," said Deutsche Bank's Jim Reid.

"Trump's comments leave plenty of near-term uncertainty even though the trade investigations from his day 1 executive orders will take some time to play out."

Trump on Monday signed a broad trade memorandum, ordering federal agencies to complete comprehensive reviews of a range of trade issues by April 1. The greenback rose 0.3% to 156 yen, edging up from the one-month low it touched the day before.

INFLATION RISKS The euro fell 0.3% in early trading, before it changed course and rose to $1.0457, its highest since Dec. 30. It was last up 0.07% at $1.0434. Sterling hit a two-week high against the greenback, but was last trading down at $1.2351.

Analysts have said that Trump's policies on immigration, tax and tariffs will likely boost growth but also be inflationary, but the more cautious tariff approach has fuelled some hopes that inflation risks could be more limited, Reuters reported.

Traders expect a quarter-point Fed interest rate cut by July, while another reduction by year-end is considered a coin toss. The Canadian dollar was slightly weaker at 1.4346 per US dollar, following a volatile week that saw it tumble as low as 1.4520 overnight for the first time since March 2020, feeling additional pressure from cooling inflation last month. The Mexican peso gained about 0.3% to 20.547 per dollar. China's yuan held steady at 7.272 per dollar in offshore trading, after pushing to the strongest level since Dec. 11 on Tuesday at 7.2530.

"A 10% tariff on China imports would be far below the 60% rate he mentioned in his campaign," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

"On top of this is the general sense that Trump is not pursuing maximalist trade protectionism in his early actions, but appears to be positioning for trade negotiations," Tan said.

"Altogether these suggest that the US dollar could drop further."