https://www.cnn.com/2019/09/23/investing/asian-market-latest/index.html
China and the US have been trading partners since the early 1970s and now the leaders of the respective nations, Donald Trump and Xi Jinping, are having a trading dispute. It started with President Trump increasing tariffs and other trade barriers in order to force China to make changes to its apparently “unfair” trade practices.
The CNN Business post “Chinese Stocks Decline After US Trade Talks Show Signs OF Faltering” by Laura He, states “… Chinese delegation reportedly canceled a scheduled visit to US farms, fueling pessimism about the prospect of a trade truce between the world’s two largest economies”. These talks of a “trade truce” have been going on for months now but with no results, a cancelation on China’s part just may have been the last straw for the American government.
There was a reported loss of around 13% in stocks just over the last 3 weeks. It can be broken down like this:
- Hong Kong Exchange & Clearing (HKXCY) reported a loss of 1.9% in shares
- Fosun International (FOSUF) went down in shares by 1.5% while its subsidiary Fosun Tourism declined by 4.7%
- The UTour Group, based in Beijing, went down by 4.9% after a horrible bus crash in Utah killed four Chinese tourists
Morgan Stanley is a multinational investment bank and financial services company based out of America. An analyst at Morgan Stanley, Chetan Ahya said that progression has continuously been stalled the talks of a trade truce but there has been no action in order to actually achieve a truce between the two nations. Many representatives have called the multiple meetings “productive” and “constructive” but no elaboration has been made on either side.
How “productive” and “constructive” was the meeting if no one in the government is telling us what actually happens behind closed doors. Are they being unproductive or productive? What are they hiding from the public? But to relieve the ongoing trade tensions, both countries must come to an agreement. Even though the stocks in China have gone done by 13% there are signs of the ongoing trade war stopping.