February 24, 2020

China’s Xi Praises Free Trade. Striking Deals Is Another Matter.

Mr. Xi did not mention on Tuesday when, where or even whether an agreement might be signed.

In what could be a good-will gesture by Beijing in connection with efforts to settle the trade war, China’s central bank allowed the country’s currency, the renminbi, to strengthen slightly in trading on Tuesday. The renminbi breached the symbolically important level of 7 to the dollar for the first time since early August.

A marginally stronger renminbi may make Chinese exports a little less competitive in foreign markets, and makes goods from overseas a little cheaper in Chinese markets. Mr. Trump has long accused China of systematically undervaluing its currency to obtain an unfair advantage in trade.

But most economists say that while China may have done that a decade ago, it has not done so lately. If anything, China has been preventing its currency from sliding further as its economy weakens, by putting ever more stringent limits on the ability of Chinese companies and families to move money out of the country.

The import expo opened a day after seven years of trade talks, strongly backed by Beijing to produce a free-trade agreement that would span much of Asia, produced a mixed outcome.

Senior officials from 10 Southeast Asian nations plus China, Japan, South Korea, Australia and New Zealand mostly resolved their differences in talks ending in Bangkok on Monday, and hope to sign an agreement next year, the Thai government announced after hosting the talks.

China had high hopes for the agreement, known as the Regional Comprehensive Economic Partnership. Whatever way the trade war with Washington ends, the prospect of more tensions between the two countries has put pressure on Beijing to open more markets for its companies and factories.

But in a setback for trade negotiators, India announced on Monday that it would not join the new free-trade area. India had participated in the negotiations from the beginning.

Article source: https://www.nytimes.com/2019/11/04/business/china-xi-trade.html?emc=rss&partner=rss

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