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Sat, 22nd July 2017

Anirudh Sethi Report

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Archives of “hu jintao” Tag

China Small Caps Crash To Lowest Since 2015 Amid Deleveraging “Selling Panic”

Despite China reporting solid economic data on Monday, with beats across the board in everything from retail sales, fixed asset investment, industrial production and GDP printing at 6.9% and on track for its first annual increase since 2010…

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… despite the biggest net liquidity injection by the PBOC since mid June after the central bank injected a net 130 billion yuan, and despite yet another rebound in the Yuan, overnight China’s Shanghai Composite slumped by 1.4%, the most since December as a result of a plunge in the small-cap ChiNext index, which tumbled by 5.1%, and is now down 16% in 2017 to levels not seen since January 2015 following a fresh round of broad deleveraging amid concerns about tougher regulations and more IPOs following a high-level conference over the weekend attended by President Xi Jinping in which China hinted at the formation of a “super-regulator”.

Trump Calls China, Japan Leaders To Discuss North Korea, Gets A Warning From Beijing Instead

Ahead of this week’s G-20 summit in Hamburg, Germany, Donald Trump called the leaders of China and Japan to discuss the “threat posed by North Korea’, along with trade issues, the White House said on Sunday. Trump spoke with Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe, whose LDP had just suffered a devastating loss in the Tokyo Assembly elections, and according to the White House read out, “both leaders reaffirmed their commitment to a denuclearized Korean Peninsula” adding that “President Trump reiterated his determination to seek more balanced trade relations with America’s trading partners.”

The terse statement did not provide further details of the call or say if Trump managed to persuade Xi to endorse his approach of exerting maximum pressure on North Korea, including a slew of further economic and trade sanctions.

According to Reuters, the call may have been prompted by Trump increasing frustration with China’s inability to rein in North Korea, and the reference to trade was an indication the president may be ready to return to his tougher-talking ways on business with Beijing after holding back in hopes it would put more pressure on Pyongyang. Trump and Xi discussed the “peace and stability of the Korean peninsula”, China’s Foreign Ministry said, without elaborating.

 Ministry spokesman Geng Shuang later told a daily briefing that the United States was “very clear” about China’s position on North Korea. Geng did not elaborate on what Xi told Trump about North Korea.

Xi Jinping’s goal eludes him in the US

The primary goal of Chinese President Xi Jinping in the first face-to-face meeting with his U.S. counterpart, Donald Trump, was to seek a new beginning for his “major powers” initiative. But he got off to a rather rocky start; the summit was overshadowed by a series of unexpected events.

On Thursday night, Xi and his wife arrived at Trump’s Mar-a-Lago resort in an already summery Florida, where daytime temperatures reach 30 C. During the dinner, the couple enjoyed listening to Trump’s granddaughters singing Chinese folk songs and reciting poems from China’s Tang dynasty.

 As they were enjoying the entertainment, U.S. forces were bombing Syria. It was only toward the end of dinner that Trump told Xi about the operation.

Xi must have felt quite awkward. He might have felt completely taken in by Trump. Xi was right next to the commander in chief who had just ordered a bombing campaign in a politically sensitive region of the world, happily smiling and talking without knowing anything about the assault.

The timing of the missile attack was carefully calibrated. Just before meeting with Xi, Trump suggested the U.S. might engage in unilateral military action against North Korea, which had launched a ballistic missile days before the U.S.-China summit. The bombing of Syria — and the campaign’s timing — was apparently intended to pressure China, which is reluctant to cooperate with the U.S. in dissuading Pyongyang from pursuing missile and nuclear weapons programs.

Abe tries to keep Trump-Xi talks laser-focused on Pyongyang

Japanese Prime Minister Shinzo Abe on Thursday urged U.S. President Donald Trump to insist on greater Chinese cooperation in the face of threats from North Korea, which tested yet another missile the previous day.

Japan requested the call, which lasted 35 minutes, just ahead of Trump’s scheduled summit with Chinese President Xi Jinping in Florida. Trump assured Abe that the North Korean issue would feature prominently on the agenda when he meets with Xi on Thursday and Friday, U.S. time, according to a Japanese government official.

 Trump and Abe agreed that China has a key role to play in moderating Pyongyang’s behavior, and that a Beijing clampdown needs to go beyond the current suspension of coal imports from the North.

“All options” for dealing with the threat remain on the table, the U.S. president said. 

In an earlier interview with the Financial Times, Trump had declared, “If China is not going to solve North Korea, we will.”

But while Trump’s White House is taking a harder line — going so far as to hint at the possibility of military action — China is reluctant to crank up the pressure.

China Orders No Market Selloffs During President’s Davos Trip

As we observed in yesterday morning’s market wrap, while US traders took the day off for the MLK holiday, China was busy defending an accelerating selloff across its stock markets.

During Monday trading, having traded quietly lower for the past few days, Chinese stocks tumbled in early trading on the mainland and in Hong Kong’s offshore market amid weakness in Asian equities. The Shanghai Composite Index dropped as much as 2.2% to head for its fifth loss in as many days, its longest losing streak since Aug. 2015.However a sudden bout of late afternoon buying sent the loss down to just -0.3%, on speculation China’s national team was once again back in the markets.

 

10 takeaways from Xi’s Davos speech

Chinese President Xi Jinping delivered a keynote speech on Tuesday at the opening plenary of the 2017 annual meeting of the World Economic Forum in the Swiss town of Davos.

Here are 10 quick takeaways from the 50-minute address, which touched upon globalization, protectionism, world economy and China’s development among other subjects.

1. Many of the problems troubling the world are not caused by economic globalization. Just blaming economic globalization for the world’s problems is inconsistent with reality, and it will not help solve the problems.

2. Whether you like it or not, the global economy is the big ocean that you cannot escape from. Any attempt to cut off the flow of capital, technologies, products, industries and people between economies, and channel the waters in the ocean back into isolated lakes and creeks is simply not possible. Indeed, it runs counter to the historical trend.

3. At present, the most pressing task before us is to steer the global economy out of difficulty.

4. Lack of robust driving forces for global growth makes it difficult to sustain the steady growth of the global economy; inadequate global economic governance makes it difficult to adapt to new developments in the global economy; uneven global development makes it difficult to meet people’s expectations for better lives.

5. The world should develop a dynamic, innovation-driven growth model; pursue a well-coordinated and inter-connected approach to develop a model of open and win-win cooperation; develop a model of fair and equitable governance in keeping with the trend of the times; and develop a balanced, equitable and inclusive development model.

6. Pursuing protectionism is like locking oneself in a dark room. While wind and rain may be kept outside, that dark room will also block light and air. No one will emerge as a winner in a trade war.

7. The Paris Agreement is a hard-won achievement which is in keeping with the underlying trend of global development. All signatories should stick to it instead of walking away from it as this is a responsibility we must assume for future generations.

Demonetisation: Chinese state media calls currency move ‘bold’ but ‘far from enough’

Terming Prime Minister Narendra Modi’s decision to demonetise high value currency notes as “startling and bold”, Chinese official media has said it is “far from enough” and India may “look at ideas” from China’s crackdown against corruption which has shown “efficiency”. Modi in “a startling and sudden move” demonetised Rs 500 and Rs 1,000 currency notes to “demonstrate that he is truly up for a fiercer fight against black money and corruption”, an op-ed article in the state-run Global Times said.

“Modi means well and his decision was made based on the reality in India, since most illegal business in the underground economy is cash-only, and 500 and 1,000 rupee notes constitute over 80 per cent of all cash circulation in India. Nevertheless, we can hardly count on the new rule to fully root out corruption,” the article titled ‘Beijing offers clues for Modi’s new anti-corruption moves’.

Since Modi assumed office, he has carried out a number of measures to crack down on black money, corruption and tax evasion. However, many of them are believed to be “without teeth and can’t begin to scratch the surface of the problems he faces”, it said.

India’s new policy to scrap high value notes is considered a “risky, but a bold and decisive step”, it said.

Global economy in precarious state, Xi tells BRICS summit

China’s President Xi Jinping warned Sunday that the global economy remained in a precarious condition as leaders of the BRICS group of nations tried to find ways to fire up growth in the troubled bloc.

Speaking at a summit in the Indian state of Goa, Xi told his host Narendra Modi and the leaders of Russia, Brazil and South Africa that the club of emerging powers had been undermined by both domestic and international woes.

But the leader of the world’s second largest economy said the long-term forecast for BRICS members was positive as he called for more confidence-building measures.

“The global economy is still going through a treacherous recovery,” Xi said in a statement at the summit on India’s west coast.

“Because of the impact of both internal and external factors, BRICS countries have somewhat slowed down in economic growth and have faced a number of new challenges in development.”

A beleaguered Xi Jinping turns to brass for help

DF-21D ballistic missiles are shown during a military parade in Beijing on Sept. 3, 2015.

TOKYO — Chinese President Xi Jinping has conducted an unusual flurry of inspections recently at units of the People’s Liberation Army, as he struggles to weather a political storm.

Xi kicked off the inspections several days before he left Beijing on Sept. 3 for the Group of 20 Summit, held this year in Hangzhou, Zhejiang province, on Sept. 4-5. On Aug. 29, Xi visited the Strategic Support Force, one of the PLA’s new units established as part of his military reform drive. The force differs from conventional combat units and is said to be “a future force.”

 The Strategic Support Force consists of three units: cyber, space and electronic warfare, according to a number of sources, including the Global Times, a newspaper affiliated with the People’s Daily, the mouthpiece of the Chinese Communist Party.

The cyberwarfare unit is made up of computer experts responsible for offensive and defensive action. The space warfare unit oversees China’s spy satellites and the Beidou Navigation Satellite System, the Chinese equivalent of the U.S. Global Positioning System. The electronic warfare unit is responsible for jamming and disrupting enemy radar systems and communications.

Speculation grows over possible extension of Xi’s term

Speculation is rife in Chinese political circles about the results of the recent annual meeting of the Communist Party of China’s leaders, in the seaside resort of Beidaihe.

Following the unusually long meeting in the town in Hebei Province, some pundits say Chinese President Xi Jinping, like Japanese Prime Minister Shinzo Abe, wants to extend his term in office. According to party observers, there was no specific discussion of candidates to succeed Xi as the Communist Party’s general secretary, and Xi seemed to be paving the way for extending his term.

 The meeting this year was different from the one in the summer of 2006, when candidates to be China’s future leader were discussed. Li Keqiang, now China’s premier, was seen as the leading candidate for the top job at that time, while Xi was hardly mentioned — at least publicly.

The top echelons of the party will be reshuffled at its convention in the fall of 2017, and usually, party leaders exchange frank opinions about the nation’s future leadership during their summer gathering the year before. But little information was leaked about this year’s meeting, possibly because Xi suppressed discussions in a bid to avoid gradually becoming a lame duck, even if he retains his current post following next year’s convention.