China praises positive steps in US trade row

During an initial round of talks this month in Beijing, the US demanded that China reduce its trade surplus by $200 billion. (Reuters)
Updated 21 May 2018
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China praises positive steps in US trade row

  • “Despite all the pressure, China didn’t ‘fold,’ as US President Donald Trump observed. Instead, it stood firm and continually expressed its willingness to talk,”
  • “The Chinese are in a state of quiet glee knowing that Trump’s trade team backed off on sanctions without getting any real and meaningful concessions out of Beijing,”

BEIJING: Chinese state media on Monday praised a significant dialing back of trade tension with the US, saying China had stood its ground and the two countries had huge potential for win-win business cooperation.
A trade war was “on hold” after the world’s largest economies agreed to drop their tariff threats while they work on a wider trade agreement, US Treasury Secretary Steven Mnuchin said on Sunday.
The previous day, Beijing and Washington said they would keep talking about measures under which China would import more energy and agricultural commodities from the US to narrow the $335 billion annual US goods and services trade deficit with China.
The official China Daily said everyone could heave a sigh of relief at the ratcheting down of the rhetoric, and cited China’s chief negotiator, Vice Premier Liu He, as saying the talks had proved to be “positive, pragmatic, constructive and productive.”
“Despite all the pressure, China didn’t ‘fold,’ as US President Donald Trump observed. Instead, it stood firm and continually expressed its willingness to talk,” the English-language newspaper said in an editorial.
“That the US finally shared this willingness, means the two sides have successfully averted the head-on confrontation that at one point seemed inevitable,” it said.
During an initial round of talks this month in Beijing, the US demanded that China reduce its trade surplus by $200 billion. No dollar figure was cited in the countries’ joint statement on Saturday.
But some analysts in Beijing warned that trade tension would persist, and that China should prepare for more action on trade from the Trump administration.
“We should not be blindly optimistic,” Shi Yinhong, an expert on China-US relations at Renmin University in Beijing said at a forum on Sunday after the trade agreement was announced.
“Blind optimism (could lead to) China losing at this crossroads.”
Shi said China could accept a lower trade surplus and reduce its market entry barriers, but would not compromise on its industrial policy.
The ruling Communist Party’s People’s Daily said that in the energy and agriculture sectors the two countries had obvious synergies, with the US having the capacity to satisfy the massive Chinese market.
“The ballast stone of Sino-US ties are an equal and mutually beneficial trade and business relationship. Its essence is win-win cooperation,” it said.
But China was not being forced to increase imports as a way to ward off the trade tensions or because the country had submitted to outside pressure, the newspaper said in a commentary.
China will naturally need to import more to satisfy demand from its increasingly affluent consumers, the newspaper wrote.
“Trade wars have no winners,” it added in the commentary, published under the pen name “Zhong Sheng,” meaning “Voice of China,” used to give the paper’s view on foreign policy issues.
However, some people in US business groups, who had been pushing for tougher US policies to pressure China to reform market barriers, expressed frustration and disappointment, saying it would be hard for the administration to rebuild momentum to take on Chinese industrial policies.
James Zimmerman, a Beijing-based lawyer and a former chairman of the American Chamber of Commerce in China, said the Trump administration’s move to walk back its threatened trade actions was premature, and a “lost opportunity” for American companies, workers and consumers.
“The Chinese are in a state of quiet glee knowing that Trump’s trade team backed off on sanctions without getting any real and meaningful concessions out of Beijing,” Zimmerman said.


Dubai regulators move against Abraaj Capital

Updated 17 August 2018
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Dubai regulators move against Abraaj Capital

  • Dubai regulators have implemented a winding up order against Abraaj Capital stopping it from doing any new business in the emirate’s financial center
  • The DFSA said it has also stopped Abraaj Capital from moving funds to other parts of the group

DUBAI: Dubai regulators have moved against Abraaj Capital, the UAE arm of the beleaguered private equity group, implementing a winding up order against it and stopping it doing any new business in the emirate’s financial center.

The Dubai Financial Services Authority, the regulatory arm of the Dubai International Financial Center (DIFC), announced the moves after the DIFC Courts earlier this month received a petition to wind up the troubled firm under UAE insolvency laws.

The court has appointed two liquidators from the accounting firm Deloitte to oversee the winding up order.

“The DFSA will continue to take all necessary actions within its remit to protect the interests of investors and the DIFC,” the regulator said in a statement.

 

The DFSA also said it has stopped Abraaj Capital from moving funds to other parts of the group.


The DFSA has been monitoring events at the company since the scandal at Abraaj broke in February, involving redirection of investment funds to purposes for which they were not intended.

Only a relatively small part of Abraaj’s operations fall under the remit of the DFSA. Most of its business and assets are located in the Cayman Islands, the domicile for its ultimate holding company Abraaj Holdings Limited (AHL) and its main operation business Abraaj Investment Management. The Cayman entities are also going through liquidation procedures.

The DFSA said: “Given the onset of financial difficulties of the wider Abraaj Group, the DFSA has been closely monitoring the activities of its regulated entity ACL. The DFSA has taken regulatory actions over the past few months in order to safeguard the interests of investors and the DIFC.

“Given such actions and the current matters surrounding the Abraaj Group, the DFSA continues to monitor the limited financial services activities currently being undertaken by ACL,” it added.

ACL was authorized to conduct various financial services from DIFC, including managing assets and fund administration, but restricted to funds established by the firm or members of its group.

It could also advise on financial products, arranging deals in investments, and arranging and advising on credit.

It is unprecedented for the DFSA to comment on a case while it is still under investigation, but the application in the DIFC Courts on Aug. 1 presented an opportunity to address investors and DIFC members who were concerned about the scandal, which some observers believe has been damaging for Dubai’s reputation as a regional financial hub.

FACTOID

The Dubai Financial Services Authority has been monitoring events at Abraaj since a scandal emerged involving redirection of investment funds to purposes for which they were not intended.