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Ministry of Commerce: China’s Trade Surplus with the U.S. Reached Record High in June

The Chinese Ministry of Commerce recently posted a notice on its official site regarding the news that, according to data from the General Administration of Customs, China’s June trade surplus with the U.S. reached US$28.97 billion, which is the highest level since the year 1999. The total exports to the U.S. in June amounted to US$42.62 billion, which is a new record. Overall Chinese June exports saw an 11.3 percent increase, while imports increased by 14.1 percent – both were lower than the same numbers in May. China’s overall June trade surplus was at US$41.61 billion. Experts expressed their belief that the record-setting numbers with the U.S. showed a healthy U.S. economy with strong growth as well as a slightly weakening Chinese economy. Some also thought China’s domestic spending was weak due to its lack of investments. Also, in June, China had a trade surplus of US$16.25 billion with the European Union, a trade deficit of US$2.89 billion with Japan, and a trade surplus of US$4.22 billion with Russia. In the first half of 2018, China had an overall global trade surplus of US$135.4 billion.

Source: The Chinese Ministry of Commerce Official Site, July 13, 2018
http://www.mofcom.gov.cn/article/i/jyjl/e/201807/20180702766046.shtml

LTN: China’s Soybean “Punishment” against the U.S. Brought Uncle Sam More Business

Major Taiwanese news network Liberty Times Network (LTN) recently reported that the primary “weapon” China deployed in the trade war with the U.S. was China’s soybean tariff. China is the largest U.S. soybean buyer and the “punishment” was designed to have a negative effect on U.S. farmers, who mostly supported Trump in the last election. However, the significantly lowered price of U.S. soybean futures triggered a wave of non-Chinese buyers who even hoarded in volume. According to the U.S. Department of Agriculture, major U.S. soybean importers generated a year-over-year purchase increase of 27 percent for July-to-September U.S. soybean futures. These buyers include Mexico, Pakistan, and Thailand. Even Brazil, the  world’s largest exporter of soybeans, is planning to buy more U.S. soybeans for domestic use and export Brazilian soybeans to China at a much higher price. Argentina, as the third largest soybean exporter, increased its purchase of U.S. soybeans due to domestic weather conditions.

Source: LTN, July 12, 2018
http://ec.ltn.com.tw/article/breakingnews/2486656

Chinese Scholar: Fundamental Change in the Sino-U.S. Relationship

{Editor’s Note: In April, Yuan Peng, the Deputy President of the China Institute of Contemporary International Relations, published an article commenting on the Sino-U.S. relationship. In his view, what is happening right now between China and the U.S. is the first serious clash between the two countries in the past one hundred years. Continue reading

Duowei News: Central Administration is Extremely Dissatisfied with Municipal Government’s Slow Reform Progress

An article that Duowei News published disclosed that the Central Administration is extremely dissatisfied with the slow reform progress that local governments are making. The article quoted a former Deputy Director from the Finance Office who spoke at the recent Lujiazui Forum in Shanghai (http://chinascope.org/wp-admin/edit.phpai). He claimed that in the past two years, the Central Administration has shifted its focus and made progress on financial crisis prevention. However, the efforts that the local governments and State Owned Enterprises (SOEs) are making are sorely lacking. Examples he listed included some municipal entities that resist the deleveraging measures that the Central Administration has launched; some can’t even pay back the interest on their debt, where the total debt at the municipal level is 40 trillion yuan (US$6 trillion). Meanwhile the SOEs are slow in reducing their excess capacity.

Source: Duowei News, July 10, 2018
http://news.dwnews.com/china/news/2018-07-10/60069825.html

Chinese Foreign Exchange Administration Warned about Illegal Activities

Well-known Chinese news site Netease recently republished a report from Xiamen Daily News that the State Administration of Foreign Exchange, Xiamen Branch, issued a public risk warning on illegal foreign exchange activities. The warning said that, without approval and authorization from the Administration, no organization is allowed to conduct the business of exchanging Chinese currency for any foreign currencies. Any organization without a permit will have to face law enforcement. The warning listed the authorized local commercial banks as well as companies that have a permit. Some companies may require a prior appointment for doing an exchange transaction. {Editor’s note: before the great Reform that Deng Xiaoping started, China used to have a large foreign exchange black market. In the past few decades, since the government authorized organizations have had an ample supply of foreign currency, especially the U.S. dollar, the black market nearly disappeared from everyday life. However, recently, the Chinese government has been tightening up the supply of U.S. dollars.}

Source: Netease, July 2, 2018
http://xiamen.news.163.com/18/0702/16/DLNKIL2504418D23.html

Global Times: The U.S. Asked the World not to Buy Iranian Oil. How should China Respond?

Global Times recently published a commentary offering some strategic suggestions on how to respond to the U.S. position of asking the world to ban Iranian oil. The commentary started with the fact that most EU companies decided to stop doing business with Iran. However, China and India are the largest buyers of Iranian oil. The U.S. exit from the Iranian Nuclear Deal was in itself a betrayal to the promise the U.S. made as a government – or should people call it bullying. However just like other nations, China faces the choice of losing the profitable business with Iran or losing more business with the U.S. Global Times suggested: First, the U.S. position has no basis in international law – and China should not just agree. Second, China should not stick its head out to lead the opposition against the U.S. since China does not have the power to lead in such a case. Third, China should strengthen coordination with other large Iranian oil buyers to negotiate with the U.S. jointly. In a case of not touching China’s core strategic interests, China should avoid being recognized as “the leader of the united front-line against the United States.”

Source: Global Times, June 28, 2018
http://opinion.huanqiu.com/editorial/2018-06/12370186.html

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