- China is preparing to retaliate in the escalating trade war with tariffs on about $60 billion worth of U.S. goods.
- The import taxes would range in rates from 5 percent to 25 percent, the Chinese government said.
- “Any unilateral threat or blackmail will only lead to intensification of conflicts and damage to the interests of all parties,” China’s statement said.
(CNN)Hundreds of thousands of vaccines provided for Chinese children have been found to be faulty, inciting widespread fury and prompting the country’s President, Xi Jinping, to describe the incident as “vile and shocking.”China’s Food and Drug Administration (CFDA) has launched an investigation into vaccine manufacturer Changchun Changsheng Biotechnology, revoking its license for human rabies vaccines and beginning a recall of all unused vaccines produced by the company.
The president’s green light came after a meeting Thursday with top economic officials, including Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer.
The move represents a serious escalation of trade tensions between the world’s two largest economies — just as Trump has also picked fights with allies Canada, Mexico and the European Union over steel and aluminum.
Amazon Echo speakers and Kindle e-readers are produced by Chinese laborers who work long hours for low pay without proper safety training, finds a new report by China Labor Watch, a U.S.-based humanitarian group.
China Labor Watch launched a nine-month investigation into the Hengyang Foxconn factory, which produces some of Amazon’s most sought after products. Amongst a number of labor violations, the group discovered that laborers were required to work at least 100 hours of overtime per month– Chinese law caps overtime at 36 hours per month.
The U.S. debuted its new IBM supercomputer Friday, which it says is the fastest in the world – taking the title away from China.
The supercomputer, named Summit, is located at the Oak Ridge National Laboratory in Tennessee and can perform 200,000 trillion calculations per second, according to IBM. That’s eight times more powerful than Cray’s Titan supercomputer and nearly twice as fast as the peak speed for Chinese supercomputer Sunway TaihuLight.
Liu Chuanjian, hailed a hero on social media after having to land the Airbus A319 manually, told the Chengdu Economic Daily his aircraft had just reached a cruising altitude of 32,000 feet when a deafening sound tore through the cockpit.
The cockpit experienced a sudden loss of pressure and drop in temperature and when he looked over, the cockpit’s right windshield was gone.
“There was no warning sign. Suddenly, the windshield just cracked and made a loud bang. The next thing I know, my co-pilot had been sucked halfway out of the window,” he was quoted as saying.
“Everything in the cockpit was floating in the air. Most of the equipment malfunctioned … and I couldn’t hear the radio. The plane was shaking so hard I could not read the gauges.”
The co-pilot, who was wearing a seatbelt, was pulled back in. He suffered scratches and a sprained wrist, the Civil Aviation Administration of China said, adding that one other cabin crew member was also injured in the descent. None of the plane’s 119 passengers was injured.
(Reuters) – A senior U.S. Treasury official said on Friday that China has been intervening to keep its yuan currency from falling more than it otherwise would and that the sooner Beijing lets the market work, the better for China.
The official, who spoke to a group of reporters but asked not to be named, urged Beijing to allow the currency to rise and fall freely.
The comments preceded a state visit to Washington by Chinese President Xi Jinping on Sept. 25, in which Xi and President Barack Obama will discuss economic ties between the two countries as well as their increasingly testy relationship over security matters.
Washington has long urged Beijing to let the yuan appreciate, arguing that China was using a weak currency to make its goods cheaper in America.
But China these days is facing doubts in financial markets over the strength of its economy. The Treasury official said China’s decision to loosen restrictions on currency trading last month, which prompted a sharp fall in the yuan’s value, appeared to be perceived in markets as having the intention to prop up China’s economy, sowing further doubts among investors.
The official said China should not feel like it needs to step in and stop declines in financial markets every time investors send it signals about the economy.
He said China’s commitment to letting market forces play a bigger role in the value of the yuanwill earn more credibility when it allows market forces to push its value up. (Reporting byJason Lange; Editing by James Dalgleish, Andrew Hay and Leslie Adler)
New York (CNN Money) — It’s no secret that China is the largest holder of U.S. debt.
So should Americans be concerned that China has started dumping some of its Treasury holdings?
After all, it raises serious questions about whether China will keep lending Washington money to help finance the federal deficit in the future.
But right now, China is selling because it’s in dire need of cash. Recently, it unleashed multiple moves to support its markets and prevent its currency from a freefall, while at the same time trying to stimulate the economy.
China yanks record sum from war chest
China owned $1.3 trillion of U.S. Treasuries as of June, making it the biggest holder of U.S. debt.
But China’s foreign-exchange reserves plunged by a record $94 billion in August, according to the country’s central bank, leaving it with a war chest of $3.6 trillion. Analysts say it’s very safe to believe a big chunk of that decline occurred due to a reduction in U.S. Treasury holdings.
The selling and the potential that China will not be buying U.S. debt in the near future raises questions on its potential to increase America’s borrowing costs.
Some of this might already be happening, at least at a small scale. When stock markets are turbulent, investors usually rush to the safety of U.S. Treasurys and yields fall. However, despite August’s extreme stock volatility, rates on Treasurys actually rose slightly in late August.
Part of that move is likely due to Wall Street betting the Federal Reserve may raise interest rates next week. But market participants also suspect the unusual action in the bond market was driven by China dumping Treasuries.
China is raising lots of cash
This time, Beijing is cutting its Treasury holdings out of a weakened position as it tries to stave off more declines in its currency. China is also propping up its stock market, which lost half its value in the span of just a few months this summer.
“Capital outflows have skyrocketed in China and the yuan is under intense selling pressure. The only thing they could do is sell Treasuries to buy their own currency,” said Walter Zimmerman, chief technical analyst at United-ICAP.
China isn’t trying to sink the U.S. economy
There have long been concerns that China could sink the American economy by unloading its gigantic holdings of Treasuries, sending borrowing costs skyrocketing.
Thankfully, those doomsday fears don’t appear to be at play here yet.
“If China’s U.S. Treasury stock is a nuclear bomb, moderate sales to offset selling pressure on the yuan are unlikely to set off an explosion,” Michael McDonough, chief economist at Bloomberg Intelligence, wrote in a recent report.
But moves could raise borrowing costs here
Still, China’s sales could make Treasury yields higher than they would normally be. That’s of concern because Treasury rates are used as a benchmark that set the cost of borrowing for items like credit cards and mortgages.
While it’s “not the end of the world,” SkyBridge Capital senior portfolio manager Troy Gayeski said higher yields could lead to a “slowdown in the housing recovery.”
What’s key is how much cash China ultimately needs to raise to defend its currency and stock market. No one, not even China, knows that figure.
China may go on a U.S. debt diet
So far, the American bond market seems to be taking the China move in stride.
The yield on the 10-year Treasury note is currently sitting at 2.22%, about unchanged from a month ago.
Demand for U.S. debt is healthy now especially when compared to the ultra-low, or even negative rates in other economic powerhouses like Germany and Japan.
Policymakers in Washington should hope that trend continues. Now that China’s economy is in disarray, America might not be able to count on its No. 1 lender to gobble up U.S. debt like in the past.
“China’s surplus is slowing. That gives them less firepower to accumulate Treasuries,” said Thomas Urano, managing director at Sage Advisory.