Japan, China agree trade war will harm global economy

Top officials from the world’s third- and second-largest economies attended a high-level economic dialogue in Tokyo on Monday, April 16, and discussed the growing trade two between the US and China. (Reuters)
Updated 16 April 2018
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Japan, China agree trade war will harm global economy

TOKYO: Japan and China agree that a trade war will have serious consequences for the world economy, Japanese Foreign Minister Taro Kono said on Monday after a high-level economic dialogue between the world’s third- and second-largest economies.
Concern is growing about a trade row between China and the US in which the two nations have threatened each other with tariffs. Japan has been criticized by US President Donald Trump on trade and been hit with tariffs on steel and aluminum, but it has not yet threatened counter-tariffs.
“We have shared understanding that a trade war, no matter which country has brought it about, would have a very large impact on the prosperity of the international economy,” Kono told reporters after the first such dialogue in more than seven years.
Kono and the Chinese government’s top diplomat, State Councillor Wang Yi, co-chaired the Tokyo meeting. Wang is also foreign minister.
Financial markets have been roiled recently over fears that a full-blown US-China trade war could shatter global trade and economic growth.
Trade issues will likely be at the forefront of a summit between Japan’s Prime Minister Shinzo Abe and President Trump later this week. Tokyo is eager to avoid being pushed into talks on a two-way free trade agreement aimed not only at market access but at monetary and currency policies.
Kono also said it was possible that Japan works with China on Beijing’s Belt and Road projects.
“It is quite possible that Japan cooperates with China on various (Belt and Road) projects on a case by case basis where international standards are met,” Kono said.
Chinese President Xi Jinping’s Belt and Road Initiative, unveiled in 2013, aims at building a modern-day Silk Road connecting China by land and sea to Southeast Asia, Central Asia, the Middle East, Europe and Africa.
Abe and Xi pledged last year to reset the sometimes-touchy relationship between Asia’s two largest economic powers.
Wang, who spent eight years in Japan as a diplomat including three as ambassador, said the changing economic climate presented fresh opportunities.
“After reopening these talks, we’re both standing at new starting points to discuss future cooperation that will, I hope, lead to fresh economic growth for both nations,” Wang said at the start of the economic dialogue.
Wang is the first Chinese foreign minister to visit Japan in a bilateral context in nine years. He and Kono discussed a broad range of issues, including North Korea, on Sunday night.


Lebanon president: negative rumors about the economy harm country

Updated 19 September 2018
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Lebanon president: negative rumors about the economy harm country

  • Lebanon has been without a government for four months since a national election
  • “The Lebanese pound is not in danger and Lebanon is not on the road to bankruptcy," Aoun said

BEIRUT: Lebanon’s currency is not in danger and rumors about the economy are causing harm, President Michel Aoun said on Wednesday, amid concern that a political deadlock has blocked urgent reforms and left the heavily indebted country vulnerable.
Lebanon has been without a government for four months since a national election. The central bank has issued repeated assurances about the soundness of the Lebanese pound’s peg to the dollar and the size of its foreign currency reserves, in response to speculation over the currency’s future.
“The Lebanese pound is not in danger and Lebanon is not on the road to bankruptcy. The economic situation is difficult but the things being spread as rumors are harming Lebanon,” Aoun said, in comments published by his office.
“We do not deny that there is a crisis,” Aoun said, but added that the country was working to address it.
Lebanon had the world’s third highest debt-to-GDP ratio, at over 150 percent, at the end of 2017. The International Monetary Fund wants to see immediate and substantial fiscal adjustment to improve debt sustainability.
The failure of politicians to form a government needed to undertake the necessary reforms following the parliamentary election in May has added to concern for the economy.
Leaders from across the political spectrum have in recent months said the political stalemate is harming the economy and a government needs to be formed. Parliament Speaker Nabih Berri this month said the country was in “intensive care” and the economic situation was “very dangerous.”
While politicians have stopped short of saying the peg is in danger, some economic analysts abroad have been considering the possibility of a devaluation.
“Lebanon’s ongoing political stalemate has renewed market concerns over the country’s frail balance sheets which could propel the government to devalue the Lebanese Pound ... Under this scenario, the authorities would find it increasingly challenging to service their large foreign currency debts,” Japan’s MUFG Bank said in a report on Wednesday.