China’s trade surplus with US hit new record in August

Chinese exports to the United States rose to $44.4 billion in August. (File/AFP)
Updated 08 September 2018
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China’s trade surplus with US hit new record in August

  • The world’s two biggest economies have been locked in a months-long trade dispute, with negotiations going nowhere and fears that it could damage the global economy
  • Trump has boasted that trade wars are “easy to win” and warned he would hit virtually all Chinese imports

BEIJING: China’s trade surplus with the United States ballooned to a new record $31 billion in August despite a raft of US tariffs, official data showed Saturday, adding fuel to the flames of a searing trade war.
The figures were released hours after President Donald Trump threatened to slap tariffs on the totality of Chinese goods imported into the United States, worth half a trillion dollars.
The world’s two biggest economies have been locked in a months-long trade dispute, with negotiations going nowhere and fears that it could damage the global economy.
Trump imposed customs duties of up to 25 percent on $34 billion worth of Chinese goods in July, and on another $16 billion in August, triggering swift tit-for-tat responses from Beijing.
But the tariffs do not appear to have dented the appetite for Chinese-made products in the United States.
Chinese exports to the United States rose to $44.4 billion in August, a 13.2 percent increase from the same period last year, according to customs data. Imports from the United States reached $13.3 billion, a two percent increase from the previous year.
China’s trade surplus with the United States reached $31 billion in August, an 18.7 percent increase from the same month last year and up from its previous record, $28.9 billion, in June this year, according to customs data.
While China’s trade surplus with the United States grew again, it remained stable with the rest of the world at $27.9 billion in August.
Global exports increased by 9.8 percent while its imports rose by 20 percent compared to the same month last year, according to customs data.
The figures were well below July’s performance, when exports had jumped 12.2 percent and imports grew 27 percent.
Trump has boasted that trade wars are “easy to win” and warned he would hit virtually all Chinese imports if Beijing does not back down and take steps to reduce its $335 billion surplus with the US.
He said Friday that tariffs on another $200 billion in Chinese goods are “in the hopper” and “could take place very soon.”
Beijing has warned that it would hit back with duties on $60 billion in American products — a much smaller figure that shows China will not be able to match US tariffs dollar-for-dollar.
But businesses warn there are other ways China can strike back, through regulations and other administrative means, or even through sales of its large holdings of US Treasury debt.
Trump told reporters traveling with him to Fargo, North Dakota that “behind that, there’s another $267 billion ready to go on short notice if I want.”
That would cover virtually all the goods imported from the world’s second largest economy.
“That totally changes the equation,” Trump said.
White House economic adviser Larry Kudlow just hours before said talks with Beijing were continuing to try to defuse the conflict, and that he was hopeful that a solution could be found.
The last effort at a negotiated solution came in late August with meetings between low-level officials, but nothing came of it.
In Beijing, China’s Commerce Ministry said Thursday it was ready to retaliate.
“If the US dogmatically implements any new tariff measures against China, China will have to take the necessary countermeasures,” commerce spokesman Gao Feng told reporters.


Dubai real estate market recovery to be seen as of 2022: S&P

Updated 20 February 2019
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Dubai real estate market recovery to be seen as of 2022: S&P

  • The outlook on property was part of a challenging assessment of the credit-worthiness of the emirate
  • S&P was generally comfortable with the credit ratings of the emirate’s banking system

DUBAI: S&P Global, the ratings agency, painted a grim picture for the real estate sector in Dubai, with a meaningful recovery in property prices expected only after 2022.
At a presentation to journalists in the Dubai International Financial Center, S&P analyst Sapna Jagtiani said that under the firm’s “base case scenario,” the Dubai real estate market would fall by between 5 and 10 percent this year, roughly the same as the fall in 2018, which would bring property prices to the levels seen at the bottom of the last cycle in 2010, in the aftermath of the global financial crisis.
“On the real estate side we continue to have a very grim view of the market. While we expect prices to broadly stabilize in 2020, we don’t see a meaningful recovery in 2021. Relative to the previous recovery cycle, we believe it will take longer time for prices to display a meaningful recovery,” she said.
S&P’s verdict adds to several recent pessimistic assessments of the Dubai real estate market. Jagtiani said that conditions in the other big UAE property market, in Abu Dhabi, were not as negative, because “Abu Dhabi never did ramp up as much in 2014 and 2015 as Dubai.” S&P does not rate developers in the capital.
She added that a “stress scenario” could arise if government and royal family related developers — such as Emaar Properties, Meraas, Dubai Properties and Nakheel — which have attractive land banks and economies of scale, continue to launch new developments.
“In such a scenario, we think residential real estate prices could decline by 10-15 percent in 2019 and a further 5-10 percent in 2020. In this case, we expect no upside for Dubai residential real estate prices in 2021, as we expect it will take a while for the market to absorb oversupply,” she said.
S&P recently downgraded Damac, one of the biggest Dubai-based developers, to BB- rating, on weak market prospects.
However, Jagtiani said that, despite the “significant oversupply” from existing projects, several factors should held stabilize the market: Few, if any, major product launches; improved affordability and “bargain hunting” by bulk buyers; and a resurgence of Asian, especially Chinese, investor interest in the market.
Jagtiani also said that government measures such as new ownership and visa regulations and reduction in government fees could help prevent prices falling more sharply, as well as “increased economic activity related to Dubai Expo 2020, which is expected to attract about 25 million visitors to the emirate.”
The outlook on property was part of a challenging assessment of the credit-worthiness of the emirate. “In our view, credit conditions deteriorated in Dubai in 2018, reducing the government’s ability to provide extraordinary financial support to its government related entities (GREs) if needed,” S&P said in a report. “The negative outlook on Dubai Electricity and Water
Authority (DEWA) partly reflects our concern that a real estate downturn beyond our base case could out increased pressure on government finances,” the report said.
It pointed out that about 70 percent of government revenues come from non-tax sources, including land transfer and mortgage registration fees, as well as charges for housing and municipality liabilities, as well as dividends from real estate developers it controls, like Emaar and Nakheel.
S&P was generally comfortable with the credit ratings of the emirate’s banking system, which has an estimated 20 percent exposure to real estate. “Banks in the UAE tend to generally display a good level of profitability and capitalization, giving them a good margin to absorb a moderate increase in risks,” the report said.