world growth

world growth

Saturday, June 17, 2017

China deal set to boost US dairy exports, result of Xi-Trump summit

More beef and milk products are coming to China from US.


China is already the world's largest dairy importer, with 1.4 billion population (world's largest, India is 2nd with 1.3 billion) and growing.
The agreement will benefit more than 200 US dairy exporters while paving the way for new opportunities in China, the US Dairy Export Council said
China and the US signed a memorandum of understanding on Thursday that will increase American dairy exports to China, a major US dairy industry association said, in a deal that shows new progress in the two sides’ ongoing negotiations towards a larger upcoming trade agreement.
The memorandum will benefit thousands of US dairy exporters in the short term and pave the way for additional US entrants in the future, according to a statement released by the US Dairy Export Council, an industry group representing more than 120 American dairy companies.
The statement added that this action creates new, good opportunities for dairy farmers (in Midwest states such as Wisconsin) and processors and the milk, cheese, infant formula and ingredients they produce.
"This deal marks a significant opportunity for the US dairy industry," said Tom Vilsack, president and CEO of USDEC.
Deal on US beef exports to China could be in place by early June, says US Agriculture Department. The US and China have been engaging in direct trade talks in what they have called a 100-day plan to reduce a bilateral trade deficit and expand market access in each other's economies since US President Donald Trump met his Chinese counterpart President Xi Jinping in early April at Mar-a-Largo.Under initial results announced on May 12, US beef, natural gas and certain financial services will be allowed into China by July 16 when the two nations are expected to finalise a deal during high-level talks in Washington. The discussions will be co-chaired from the US side by US Treasury Secretary Mnuchin (a Goldman Sachs banker) and Commerce Secretary Wilbur Ross.
Beijing, US reach trade deal to boost American imports to China in wake of Xi-Trump summitAfter the 100-day plan, the two sides intend to enter another "one-year cycle" of negotiations, Mnuchin said during a US-China Business Council meeting in early June, indicating there are more specific trade disputes to solve.

Saturday, May 27, 2017

Moody's downgrades China's Credit Rating to AAA-

It is a major economic news.

China's credit rating has been downgraded for the first time in almost three decades (first time since 1989) by Moody's, as the rating agency warned the country's government debt would go up despite upcoming ambitious reforms.

Moody's said the world's second largest economy was likely to see a significant rise in debt in the coming years as China's leaders stimulate the economy to prevent a sudden slowdown.

It downgraded China's rating by one level to A1, from Aa3 , keeping it within investment grade territory.

Market reaction to the downgrade was very delayed, and came as China's finance ministry said Moody's assessment of the Chinese economy underestimated its ability to enact reforms.

In a statement, Moody's said it expected the country's financial strength to "erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows".

It said: "While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt", as well as potential new costs.

Moody's said China's ageing population, a slowdown in productivity growth and state-led investment were likely to weigh on output in the medium term, which was likely to slow to close to 5 percent over the next five years, from 6.7 percent in 2016.

It said maintaining healthy levels of growth would require more fiscal stimulus as the economy attempts to shift towards growth led by consumer spending and service spending.

It warned that a series of reforms designed to guide China's transition "would not fully offset the rise in economic and financial risk".