China, Southeast Asian states push trade pact

UN Secretary-General Antonio Guterres, second right, gestures with leaders of ASEAN, from left, Philippines President Rodrigo Duterte, Singapore’s Foreign Minister Vivian Balakrishnan, and Thailand’s Prime Minister Prayuth Chan-ocha, during ASEAN-UN summit in Nonthaburi, Thailand on Sunday. (AP)
Updated 03 November 2019

China, Southeast Asian states push trade pact

  • New demands from India leave officials scrambling to salvage progress

BANGKOK: Leaders from China and Southeast Asia states called for swift agreement on what could become the world’s largest trade bloc at a regional summit on Sunday, but new demands from India left officials scrambling to salvage progress.

Hopes of finalizing the Asia-wide Regional Comprehensive Economic Partnership (RCEP), which is backed by China, have been thrown into doubt at the summit of the Association of Southeast Asian Nations (ASEAN) in Bangkok, Thailand.

Summit host Thailand said late on Sunday that the deal could be signed by February 2020. Thailand had previously said it aimed to conclude negotiations by the end of the year.

New impetus to reach agreement has come from the US-China trade war, which has helped knock regional economic growth to its lowest in five years.

“The early conclusion of RCEP negotiations will lay the foundation for East Asia’s economic integration,” said a statement from China’s Foreign Ministry after Premier Li Keqiang met Southeast Asian leaders.

But Indian Prime Minister Narendra Modi did not even mention the RCEP deal in opening remarks at a meeting with Southeast Asian leaders and instead spoke only of reviewing the existing trade agreement between ASEAN and India.

HIGHLIGHTS

Summit host Thailand said late on Sunday that the deal could be signed by February 2020.

Once finalized, the trade bloc would become the world’s largest accounting for a third of global gross domestic product.

Nor did Modi mention the trade bloc, whose 16 countries would account for a third of global gross domestic product and nearly half the world’s population, in Twitter posts after meeting Thai and Indonesian leaders.

Southeast Asian countries had hoped at least a provisional agreement could be announced on Monday.

But India has been worried about a potential flood of Chinese imports. A person with knowledge of New Delhi’s negotiations said new demands were made last week “which are difficult to meet.”

 

Trade war impact 

Negotiators were meeting into the evening on Sunday to try to come to an agreement, Thai government spokeswoman Narumon Pinyosinwat told reporters on Sunday.

“We don’t have a conclusion yet. Once there is one, it would be announced,” she said. “Commerce ministers are still discussing outstanding issues. The signing is expected around February next year.”

Thai Prime Minister Prayuth Chan-ocha told the formal opening of the ASEAN summit on Sunday that the 16 nations in the potential trade bloc ought to come to agreement this year to stimulate economic growth, trade and investment.

He highlighted the risks of “trade frictions” and “geostrategic competition” in the region.

Some countries have raised the possibility of moving ahead without India on forming a bloc that also included Japan, South Korea, Australia and New Zealand.

But Thai Commerce Minister Jurin Laksanawisit told Reuters on Sunday that India had not pulled out.

The US decision to send a lower level delegation to the summits this year has raised regional concerns that it can no longer be relied on as a counterweight to China’s increasing regional might.


S&P 500 inches closer to record high

Updated 12 August 2020

S&P 500 inches closer to record high

  • US stock market index returns to levels last seen before the onset of coronavirus crisis

NEW YORK: The S&P 500 on Tuesday closed in on its February record high, returning to levels last seen before the onset of the coronavirus crisis that caused one of Wall Street’s most dramatic crashes in history.

The benchmark index was about half a percent below its peak hit on Feb. 19, when investors started dumping shares in anticipation of what proved to be the biggest slump in the US economy since the Great Depression.

Ultra-low interest rates, trillions of dollars in stimulus and, more recently, a better-than-feared second quarter earnings season have allowed all three of Wall Street’s main indexes to recover.

The tech-heavy Nasdaq has led the charge, boosted by “stay-at-home winners” Amazon.com Inc., Netflix Inc. and Apple Inc. The index was down about 0.4 percent.

The blue chip Dow surged 1.2 percent, coming within 5 percent of its February peak.

“You’ve got to admit that this is a market that wants to go up, despite tensions between US-China, despite news of the coronavirus not being particularly encouraging,” said Andrea Cicione, a strategist at TS Lombard.

“We’re facing an emergency from the health, economy and employment point of view — the outlook is a lot less rosy. There’s a disconnect between valuation and the actual outlook even though lower rates to some degree justify high valuation.”

Aiding sentiment, President Vladimir Putin claimed Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine. But the approval’s speed has concerned some experts as the vaccine still must complete final trials.

Investors are now hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans, as the battle with the virus outbreak was far from over with US cases surpassing 5 million last week.

Also in focus are Sino-US tensions ahead of high-stakes trade talks in the coming weekend.

“Certainly the rhetoric from Washington has been negative with regards to China ... there’s plenty of things to worry about, but markets are really focused more on the very easy fiscal and monetary policies at this point,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Financials, energy and industrial sectors, that have lagged the benchmark index this year, provided the biggest boost to the S&P 500 on Tuesday.

The S&P 500 was set to rise for the eighth straight session, its longest streak of gains since April 2019.

The S&P 500 was up 15.39 points, or 0.46 percent, at 3,375.86, about 18 points shy of its high of 3,393.52. The Dow Jones Industrial Average was up 341.41 points, or 1.23 percent, at 28,132.85, and the Nasdaq Composite was down 48.37 points, or 0.44 percent, at 10,919.99.

Royal Caribbean Group jumped 4.6 percent after it hinted at new safety measures aimed at getting sailing going again after months of cancellations. Peers Norwegian Cruise Line Holdings Ltd. and Carnival Corp. also rose.

US mall owner Simon Property Group Inc. gained 4.1 percent despite posting a disappointing second quarter profit, as its CEO expressed some hope over a recovery in retail as lockdown measures in some regions eased.

Advancing issues outnumbered decliners 3.44-to-1 on the NYSE and 1.44-to-1 on the Nasdaq.

The S&P index recorded 35 new 52-week highs and no new low, while the Nasdaq recorded 50 new highs and four new lows.