In this file:


·         Hopes are dim as US and China resume high-stakes trade talks

·         Trade tensions escalate as the US and China barrel toward tariff hikes

·         China Open to Small Trade Deal If Trump Eases Tariff Threats

·         China swine fever outbreak threatens Communist party’s reputation

·         U.S. Farms face long-term losses from Trump Trade war, BCG warns




Hopes are dim as US and China resume high-stakes trade talks


By Paul Wiseman, Associated Press

via Star Tribune (MN) - October 9, 2019


WASHINGTON — President Donald Trump and China's Xi Jinping have plenty of reasons to call off their trade war.


Both face weakening economies that would likely further deteriorate if their conflict escalates.


Both are up against a formidable adversary that shows no inclination to yield.


Both are tangled in political turmoil — Trump with impeachment proceedings, Xi with angry protests in Hong Kong.


Both, in short, would welcome some good news.


Yet the 13th round of U.S.-China trade negotiations, set to begin Thursday in Washington, is unlikely to prove any more successful than the previous 12 in resolving tensions that have rattled markets, threatened global growth and paralyzed business investment in the United States.


The issues that divide the world's two biggest economies — mainly over allegations that Beijing deploys illicit tactics in a drive to acquire and develop cutting-edge technology — are likely too daunting to produce the kind of "big deal" that Trump says he wants.


At least anytime soon.


The already slim prospects for success grew dimmer Monday when the U.S. Commerce Department blacklisted a group of Chinese tech companies. The Trump administration charges that facial recognition and artificial intelligence technology developed by those companies is being used to repress China's Muslim minority. Beijing demanded that Commerce reverse the move.


"We urge the United States to immediately correct its wrong practices, withdraw the relevant decisions and stop interfering in China's internal affairs," said Foreign Ministry spokesman Geng Shuang.


The Chinese Commerce Ministry warned in a separate statement that Beijing will "take all necessary measures to resolutely safeguard Chinese interests" but gave no details of possible retaliation.


The U.S. stock market tumbled Tuesday — the Dow Jones Industrial Average dropped 314 points, or 1.2% — partly on diminishing hopes for an end to the trade war.


"Given the current level of hostility (and) distrust between the two sides, the possibility of negotiating a durable and broad deal seems quite remote," said Eswar Prasad, a Cornell University economist who formerly led the China division at the International Monetary Fund.


The Trump administration last year accused China of using predatory tactics in its drive to develop global competitors in advanced technologies such as quantum computing and electric cars. The administration alleges, and many China analysts agree, that these tactics include stealing sensitive technology and forcing foreign companies to hand over trade secrets.


Trump has imposed tariffs on more than $360 billion worth of Chinese goods and plans to tax an additional $160 billion of imports on Dec. 15. This would extend U.S. tariffs to just about everything China ships to the United States.


"The U.S. has made very clear to China what sort of changes they need to make," said Stephen Vaughn, a partner at the King & Spalding law firm and former general counsel at the Office of the U.S. Trade Representative under Trump. "Our president is prepared to make a deal. But it's got to be a deal that makes sense to us."


Instead of yielding, China so far has counterpunched by taxing $120 billion in U.S. exports, notably soybeans and other farm goods that are critically important to Trump supporters in rural America.


As the trade war has dragged on for 15 months, economic damage has been inflicted on both sides of the Pacific.


The Chinese economy this year is expected to register its slowest growth since 1990.


In the United States...





Trade tensions escalate as the US and China barrel toward tariff hikes


·         The US and China have seen trade tensions rise rapidly in recent days.

·         That has cast uncertainty on whether the world's largest economies would be able to stave off planned tariff escalations set to take place next week.

·         The scheduled escalation would lead to tariffs as high as 30% on Chinese products.


Gina Heeb, Business Insider 

Oct. 8, 2019


The US and China have seen trade tensions rise rapidly in recent days, casting uncertainty on whether the world's largest economies would be able to stave off planned tariff escalations set to take place next week.


On Thursday and Friday, the two sides are set to hold the first high-level trade discussions on US soil since they fell apart in May. But a series of escalations have unfolded ahead of the thirteenth round of negotiations, which were expected to offer a last-ditch attempt to avoid tariff rates as high as 30% after October 15.


The US added 28 technology companies in China to an export blacklist late Monday over alleged human rights abuses in the Xinjiang region. Chinese Foreign Ministry spokesman Geng Shuang was swift to push back against the action and suggest retaliation.


"We urge the US to immediately correct its mistake, withdraw the relevant decision and stop interfering in China's internal affairs," Geng said at a press conference. "China will continue to take firm and forceful measures to resolutely safeguard national sovereignty, security and development interests."


The Trump administration has also moved forward with discussions on ways to limit investment flows into China, according to a source familiar with the matter. Bloomberg first reported the plan, which was disputed by the White House and the Treasury Department but has been confirmed by several news outlets including Business Insider.


"The chances of these talks yielding any sort of deal was already amazingly small," said Scott Kennedy, a senior adviser at the Center for Strategic and International Studies who studies China. "This possible step just adds to the growing pile of reasons why the Chinese have little incentive to make substantial concessions."


President Donald Trump has publicly vacillated between the prospect of a prolonged dispute with China and optimism toward a deal...


more, including links



China Open to Small Trade Deal If Trump Eases Tariff Threats


·         Offer of agriculture purchases by China boosts stock futures

·         Tensions have risen after U.S. targeted China over Xinjiang


Bloomberg News

October 9, 2019


China is still open to reaching a partial trade deal with the U.S., an official with direct knowledge of the talks said, signaling that Beijing is focused on limiting the damage to the world’s second-largest economy.


Negotiators heading to Washington for talks starting Thursday aren’t optimistic about securing a broad agreement that would end the trade war between the two nations, said the official, who asked not to be named as the discussions are private.


But China would accept a limited deal -- like those it has sought since 2017 -- as long as no more tariffs are imposed by President Donald Trump, including two rounds of higher duties set to take effect this month and in December, the official said. In return, Beijing would offer non-core concessions like purchases of agricultural products without giving in on major sticking points, the official said, without offering further details.


In the past, China offered government purchases of American commodities and other short-term gestures aimed at appeasing Trump, only to be rebuffed and pushed with tariffs into pursuing a broader agreement. Heading into these talks, it’s unclear whether the the U.S. president is under enough domestic pressure with a weakening economy and an impeachment probe to settle for an incremental win this time around.


S&P 500 futures rose 0.8% on the news and the offshore yuan extended gains. Separately, the Financial Times reported that China is offering to increase purchases of American soybeans to 30 million tons annually from 20 million presently, citing people briefed on the talks. That would be around the level China was purchasing before the trade war started.


China’s Ministry of Commerce didn’t immediately reply to faxed questions.


The latest round of trade talks come just days after the White House announced the blacklisting of Chinese technology firms over their alleged role in oppression in the far west region of Xinjiang, as well as visa bans on officials linked to the mass detention of Muslims...


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China swine fever outbreak threatens Communist party’s reputation

Epidemic has sparked rapid rise in pork prices and pushed CPI to six-year high


Sun Yu in Yangxin County, Financial Times

Oct 8, 2019


Halfway up a rugged mountain in Yangxin County in the central Chinese province of Hubei, Shi Jianguo is trying new ways to defeat African swine fever, a disease that has wiped out more than half of his pigs.


Instead of killing and burying or burning sick animals, as the government has said farmers should do, he has been relying on a supersized mosquito coil to fend off the disease, using traditional Chinese medicine to protect his herd and selling the animals to the local slaughterhouse before their symptoms become visible — even though Beijing banned the practice for fear it could exacerbate the spread of the disease.


“In the beginning, the government would subsidise us to cull pigs once the disease breaks out,” said the 32-year-old who has been farming for a decade. “Now the government does nothing and we sell sick pigs to shore up our losses.”


Mr Shi is among tens of thousands of Chinese pig farmers adopting their own practices to deal with a swine fever epidemic that Beijing sees as a threat to economic stability and the reputation of the Communist party.


Pork accounts for more than 60 per cent of meat consumption in China and the outbreak has slashed the country’s pig population by 39 per cent. The epidemic has sent prices surging by more than two-thirds in August from a year earlier, helping to push up China’s consumer price index to a six-year high.


The problems in Yangxin are a microcosm of the challenges facing the country to contain the outbreak.


Farmers and analysts say government mis-steps have been an important contributor to the crisis, with poor policy threatening to make the disease a chronic issue despite efforts to revive the pig farming industry…





U.S. Farms face long-term losses from Trump Trade war, BCG warns


By: Mike Dorning, American Journal of Transportation

Oct 09 2019


U.S. farmers and agribusinesses face a rising threat of long-term losses in export sales as President Donald Trump’s trade war with China continues, Boston Consulting Group warned in a report.


The finding by a blue-chip management consulting firm could feed mounting fears among major U.S. agricultural players that the damage done from a tariff war that has already dragged on for more than a year will extend long after a deal is reached and a $28 billion trade aid program for farmers ends.


The hit to exports has already strained a farm sector beleaguered by a six-year slump in prices for agricultural commodities and a string of wild weather this year.


Other nations are filling the gap in China and making investments to expand their production capacity, improve transportation networks and deepen relationships with importers, eroding U.S. competitive advantages that took decades to develop, the analysis found.


It will be difficult for U.S. agriculture to find “meaningful” alternative export markets to make up losses in China because of regulatory hurdles, protectionist barriers and U.S. trade conflicts, the report added.


“The growing risk is that much of the market share abroad that U.S. agribusiness is losing to foreign competitors will be hard, if not impossible, to win back—even if current trade conflicts are resolved to the U.S. government’s satisfaction,” the study concluded.


If Chinese customers fear more trade conflicts down the road and begin to question the U.S. as stable source for farm products, importers over time may “completely unwind complex relationships with U.S. suppliers,” the authors predicted.


Tensions between the U.S. and Beijing have escalated ahead of a planned visit to Washington by senior Chinese officials later this week to resume negotiations on the trade dispute.


As recently as 2017, China purchased $19.5 billion in U.S. agricultural products, accounting for 14% of farm exports, according to the study. But after the trade dispute erupted, farm exports to China dropped 53% in 2018 and were down another 8% for the first seven months of 2019.


China has compensated by increasing purchases of wheat and soybeans from neighboring Russia, which now hopes to double agricultural exports to China over 10 years. Australia and Brazil “significantly” increased...