Trade War: Offshore Yuan Tumbles To 1Mo Lows Ahead Of Trade War / PetroYuan

[goldenequity]

Ides of March..... we needed this thread


Offshore Yuan Tumbles To 1Mo Lows Ahead Of Trade War

Futures
https://www.finviz.com/futures.ashx

[goldenequity]

[goldenequity]

LIVE ya missed it

[goldenequity]

►Exclusive: China taking first steps to pay for oil in yuan this year - sources
https://www.reuters.com/article/us-c...-idUSKBN1H51FA

►In Unprecedented Move, China Plans To Pay For Oil Imports With Yuan Instead Of Dollars
https://www.zerohedge.com/news/2018-...nstead-dollars

►Russia's Independent SWIFT System and Internet Are Ready to Launch if Necessary
https://russia-insider.com/en/russia...essary/ri22912

A Russian equivalent of SWIFT was tested by Rosneft in December, Gazprombank Vice-President Andrey Korolyov told TASS news agency.
It is the first time that the Russian SWIFT analogue has been used by a huge corporation since its introduction in 2014.






JUST IN: China formally notifies World Trade Organization it is suspending trade concessions to the United States
on products including ethanol in response to U.S. duties on aluminium and steel - WTO document, Reuters

BREAKING: US proposes tariffs on $50 billion in Chinese imports to protest alleged technology theft.

U.S. LIST OF CHINA GOODS VIOLATES INT'L TRADING RULES: XINHUA

Trade War Round 2: US Releases Tariff List Targeting 1,300 Chinese Products
it plans to hit with a 25% Tariff; China vows to retaliate.

zerohedge
As they said they would:
CHINA PLANS RECIPROCAL MEASURES ON U.S. PRODUCTS: XINHUA
$50BN tariffs on US exports any moment

the first one was in response to the aluminium/metals tariffs,
this one is in response to intellectual property theft tariffs


►US-China trade: Beijing condemns US tariffs list
http://www.bbc.com/news/business-43632315

[Danke]

Ides of March..... we needed this thread


Offshore Yuan Tumbles To 1Mo Lows Ahead Of Trade War

Futures
https://www.finviz.com/futures.ashx

"Low?" The Yuan is strengthening.

[oyarde]

We do not use Yaun here but I do accept silver and gold Pandas .

[Danke]

We do not use Yaun here but I do accept silver and gold Pandas .

You shouldn't turn your back on your ancestors over there.

[oyarde]

You shouldn't turn your back on your ancestors over there.

I generally try and avoid buying things made in china , north korea . Low quality .

[goldenequity]

"Low?" The Yuan is strengthening.

Yeah... the Yuan was weakening as we approached the showdown...
chart quote was 3/22... 10 days ago it hit a bottom then jumped/rose ever since.

[goldenequity]

he's always delivering non-sequiturs. always. so entertaining. luv it.
people listening left scratching their heads saying: What da fuuk did he just say??? hahaha






(pssst... yes. It IS a trade war.)

[goldenequity]

THE DIE HAS BEAN CAST!

(China's inclusion of US Soy Bean exports ENSURES that the Trade War has gone nuclear.)




Why China's Soybean Tariff Changed Everything
https://www.zerohedge.com/news/2018-...ged-everything



Soybean Exports Were Responsible For One-Third Of American Growth In Q3
https://www.zerohedge.com/news/2016-...-q3-gdp-growth


in simple terms...
American soy farmers lose. (they're horrified)
a 25% 'tax' on their export = their profits.
There really is no 'other' market... China buys the VAST amount of the world's soy.

[goldenequity]

Round 3
Trump threatens China with $100bn more in tariffs as response to Beijing’s ‘unfair retaliation’
https://www.rt.com/business/423337-t...s-retaliation/

Trump’s call for new measures against China comes a day after White House economic adviser Larry Kudlow
said that he expected that the United States and China would work out their trade differences.
“I believe that the Chinese will back down and will play ball,” Kudlow commented.


I really don't think so Larry.
This isn't about what's 'fair' (in $$$)
This is about the 'world' finding a 'vehicle' with which to stand up (finally) to a hated murderer and bully.
There has been no contrition on our part for the last 30 years of sorrows and death.
Not a bit. Nikki Haley/Heather Nuart speak volumes.
Our 'partner' the UK is exposed and on display like never before.

They would rather eat dirt if they know they can exact pain and revenge. They will partner together to do so.
I think it's where we are headed.

[Swordsmyth]

Round 3
Trump threatens China with $100bn more in tariffs as response to Beijing’s ‘unfair retaliation’
https://www.rt.com/business/423337-t...s-retaliation/

Trump’s call for new measures against China comes a day after White House economic adviser Larry Kudlow
said that he expected that the United States and China would work out their trade differences.
“I believe that the Chinese will back down and will play ball,” Kudlow commented.


I really don't think so Larry.
This isn't about what's 'fair' (in $$$)
This is about the 'world' finding a 'vehicle' with which to stand up (finally) to a hated murderer and bully.
There has been no contrition on our part. Not a bit. Nikki Haley/Heather Nuart speak volumes.
Our 'partner' the UK is exposed and on display like never before.

They would rather eat dirt if they know they can exact pain and revenge. They will partner together to do so.
I think it's where we are headed.

China is making plenty of enemies as well, this isn't going to go the way they think, I predict they will destroy themselves.

[goldenequity]

China is making plenty of enemies as well, this isn't going to go the way they think, I predict they will destroy themselves.

The pain and suffering will come to both (if we're making predictions about where this is headed)
it then becomes a question of whose social fabric is the strongest.
aka When there is 'no bread'... WHO will the 'public' blame? and how will the social construct behave?

[Swordsmyth]

The pain and suffering will come to both (if we're making predictions about where this is headed)
it then becomes a question of whose social fabric is the strongest.
aka When there is 'no bread'... WHO will the 'public' blame? and how will the social construct behave?

It is also a question of who's economic house of cards is shakier, I believe China's is in worse shape than ours, I think we will survive and and grow stronger but I think they will collapse.

I also think that China's hold on it's people is more fragile since it is based on fear.

The biggest question is how will their elite's react, I predict they will divide and fight over the shrinking pie, Xi is afraid of that and that is why he has been consolidating power.

Our people can vent their anger at the ballot box and our elite's can compete at it as well, the Chinese don't have that option and will be more likely to resort to arms.

[goldenequity]

It is also a question of who's economic house of cards is shakier, I believe China's is in worse shape than ours, I think we will survive and and grow stronger but I think they will collapse.

I also think that China's hold on it's people is more fragile since it is based on fear.

The biggest question is how will their elite's react, I predict they will divide and fight over the shrinking pie, Xi is afraid of that and that is why he has been consolidating power.

Our people can vent their anger at the ballot box and our elite's can compete at it as well, the Chinese don't have that option and will be more likely to resort to arms.

You mean internally/domestically?

[Swordsmyth]

You mean internally/domestically?

Yes, but they might lash out at India or someone else now that you bring up the external option.
But there would have to be some case made that the target was responsible for their woes and/or that attacking them would relieve them.
War with the US isn't in the cards, they aren't ready for it.

[goldenequity]

I find it interesting as we watch what Turkey does
upon the occupation of the vanquished...
they start disassembling their 'means of production'...
bakeries, tooling, industries, manufacturing, equipment, motors, conveyors... etc. etc.
They load em up and haul them off.

During the Gulf War...
remember the Iraqis running off through the desert
with trucks & cars laden with Kuwaiti TVs and Stereo equipment?

Krazee world.

[Swordsmyth]

I find it interesting as we watch what Turkey does
upon the occupation of the vanquished...
they start disassembling their 'means of production'...
bakeries, tooling, industries, manufacturing, equipment, motors, conveyors... etc. etc.
They load em up and haul them off.

During the Gulf War...
remember the Iraqis running off through the desert
with trucks & cars laden with Kuwaiti TVs and Stereo equipment?

Krazee world.

The gloves are going to come of and the Marquess of Queensberry Rules will be observed less and less as this age progresses, wars will look a lot more like they did centuries ago.

[Swordsmyth]

China is less stable and less powerful than it appears on the surface. Its apparent stability is more of a mask concealing internal divisions. And it is afraid that its hold on power is weaker than many in the West suspect.
Remember Tiananmen Square?
Rather than showing the power and unity of the Chinese government, Beijing took a different lesson from Tiananmen Square.
As my colleague Kevin Massengill has pointed out, it revealed China’s political fragility.
We all know about the massacre. But what is not widely known is that several army officers refused orders to crush protests throughout China.
Seven retired generals, including a former defense minister, signed a letter opposing the use of force against the people of Beijing:
“Due to the exigent circumstances, we as old soldiers, make the following request: Since the People’s Army belongs to the people, it cannot stand against the people, much less kill the people, and must not be permitted to fire on the people and cause bloodshed; to prevent the situation from escalating, the Army must not enter the city.”

“I’d rather be beheaded than be a criminal in the eyes of history,” said one general commanding forces in the Beijing military district.
They were not the only one who felt that way. As Kevin has noted, armored divisions of 10,000 soldiers allowed themselves to be stopped for days by crowds of students and ordinary citizens who brought them food and water while explaining why their cause was just.

An estimated 3,500 PLA officers disobeyed orders to crush protests. Many Chinese army officers were reportedly executed. Others were demoted, or faced court martial and imprisonment.
The Tiananmen Square Massacre, Kevin says, is an example of why and proves that the position of the Chinese Communist Party is more precarious than is widely understood, even now, almost 30 years later.
Here’s something else not widely known about the protests…
The Tiananmen Square protests and massacre of 1989 did not start out as a liberty movement, although that’s how they are remembered in the West. It started out as an anti-inflation protest, and that’s how the Communists remember it.
And given China’s current economic problem, Beijing’s challenge is becoming more difficult every day. Consider what’s happening in China right now…
Growth in GDP is conventionally defined as the sum of consumer spending, investment, government spending (excluding transfer payments) and net exports.
Most large economies other than oil-producing nations get most of their growth from consumption, followed by investment, with relatively small contributions from government spending and net exports.
A typical composition would show a 65% contribution from consumption plus a 15% contribution from investment. China is nearly the opposite, with about 35% from consumption and 45% from investment.
That might be fine in a fast-growing emerging-market economy like China if the investment component were carefully designed to produce growth in the future as well as short-term jobs and inputs.
But that’s not the case.
Up to half of China’s investment is a complete waste. It does produce jobs and utilize inputs like cement, steel, copper and glass. But the finished product, whether a city, train station or sports arena, is often a white elephant that will remain unused.
What’s worse is that these white elephants are being financed with debt that can never be repaid. And no allowance has been made for the maintenance that will be needed to keep these white elephants in usable form if demand does rise in the future, which is doubtful.
Chinese growth has been reported in recent years as 6.5–10% but is actually closer to 5% or lower once an adjustment is made for the waste. The Chinese landscape is littered with “ghost cities” that have resulted from China’s wasted investment and flawed development model.
This wasted infrastructure spending is the beginning of the debt disaster that is coming soon. China is on the horns of a dilemma with no good way out.
On the one hand, China has driven growth for the past eight years with excessive credit, wasted infrastructure investment and Ponzi schemes. The Chinese leadership knows this, but they had to keep the growth machine in high gear to create jobs for millions of migrants coming from the countryside to the city and to maintain jobs for the millions more already in the cities.
The Communist Chinese leadership knew that a day of reckoning would come. The two ways to get rid of debt are deflation (which results in write-offs, bankruptcies and unemployment) or inflation (which results in theft of purchasing power, similar to a tax increase).
Both alternatives are unacceptable to the Communists because they lack the political legitimacy to endure either unemployment or inflation. Either policy would cause social unrest and unleash revolutionary potential.
Instead of these unpalatable extremes, the Chinese leadership is trying to steer a middle course with gradual financial reform and gradual limits on shadow banking. I’ve previously predicted that this gradual policy would not work because the credit situation is so extreme that even modest reform would slow the economy too fast for comfort.
That’s exactly what has happened. China has already flip-flopped and is easing up on financial reform. That works in the short run but just makes the credit bubble worse in the long run. China may soon resort to a combination of a debt cleanup and a maxi-devaluation of their currency to export the resulting deflation to the rest of the world.

It is probably the best way to avoid the social unrest that terrifies China.
When that happens, possibly later this year in response to Trump’s trade war, the effects will not be confined to China. A shock yuan maxi-devaluation will be the shot heard round the world as it was in August and December 2015 (both times, U.S. stocks fell over 10% in a matter of weeks).

More at: https://www.zerohedge.com/news/2018-...survival-china

[goldenequity]

Op-Ed in China's Xinhua news (unofficial mouthpiece of the Party)
China won't submit to US trade intimidation
http://www.globaltimes.cn/content/1096751.shtml

US President Donald Trump's latest threat to impose tariffs on an additional $100 billion in imports from China
was quickly rebuked by China's Ministry of Commerce and Ministry of Foreign Affairs in a more resolute way.
The two ministries said China will listen and observe what Washington will do next, while showing contempt to the unreasonable US.
They said China will fight to the end at any cost, which is an unusual response.

We Chinese do disdain that Washington, which is in no position to initiate a trade war with China, persists in wielding the tariff baton.
We are fully able to inflict as same losses on the US as those on China.
The US will have to repay whatever loss and harm it has caused on China with huge economic and political cost.

The White House's latest proposal will hit Chinese exports to the US, and in response China will make a sweeping counter attack at US exports to China.
China can retaliate at a wide range of areas including US goods exports to China, service exports and the US' highly profitable investment in China.

It takes both strength and willpower to engage in a large-scale China-US trade war.
While the two countries are about evenly matched in trade power, the future is on China's side.
The trade war will cause pain for China, but in the meantime it can force China to speed up its economic transformation.
What the US is losing in this process is its future.
Many leading US companies will lose the Chinese market and thereby lose their edge.
The US' modern agriculture industry will be dealt a heavy blow.

China won't back off.
The Chinese society will unite around the Party and the government to weather through the hardships, which is unparalleled for the US.
More importantly, in the trade war launched by the US, China is on the righteous side safeguarding multilateral trade rules and our own rights on this basis.

Chinese are aware that the only option now is to hit the US hard enough so that it will remember the pain.
Otherwise Washington will go more recklessly and cause more losses.

When Zhu Guangyao, China's vice finance minister, and Wang Shouwen, vice commerce minister,
announced proportionate tariffs on $50 billion US goods exported to China at a press conference on April 4,
the short video got more than 2 million likes in two days.
That is how Chinese people feel.

It is not only the Chinese government's decision, but the choice of society
to firmly strike back against the US pressuring moves at any cost.
Chinese society has been mad at repeated threats from the US in these years.
Even if the Trump administration wants to take the trade war to the direction that bilateral trade and investment is suppressed to zero,
China will meet all the challenges.

Based on information we have received, Chinese authorities have made detailed response plan with many specific measures.
Relevant Chinese government departments are fully confident in our ability to hit back at Washington, safeguard China's interest and defend the multilateral system.

Most Americans have their life linked with China-US trade.

As the tensions escalate, we want to expand the trade war to all Americans so that they have to choose
whether to support Trump's unscrupulous move or to hold the president accountable.

=======

China says it will `counterattack with great strength' if Trump acts on new tariff threat, says negotiations impossible.

CHINESE BUSINESSES TO `FIRMLY' SUPPORT COUNTER-U.S. MEASURES

U.S. USING SANCTIONS TO GAIN COMPETITIVE ADVANTAGES ON GLOBAL MARKETS, RUSSIA TO RESPOND PROPORTIONALLY - SLUTSKY

[phill4paul]

We Chinese do disdain that Washington, which is in no position to initiate a trade war with China, persists in wielding the tariff baton.

[goldenequity]

I have no worries. We should be fine here.

[Swordsmyth]

According to filings made with the World Trade Organization (WTO) on April 3 and 4, respectively, Japan and the European Union have each asked to join the United States in its request for WTO consultations related to the protection of certain intellectual property rights and the transfer of technologies to Chinese joint venture companies.

More at: https://worldview.stratfor.com/situa...ons-over-china

[Swordsmyth]

Pakistan has delayed the signing of the second phase of a revised free trade agreement with China over reservations regarding the final list of concessions that Beijing shared, The Express Tribune reported April 6. Pakistan gave concessions on 35 percent of tariff lines in the first phase of the agreement, resulting in an influx of Chinese goods that local industries couldn't compete with. Under the second phase, China was seeking concessions that Pakistan was unable to provide.

More at: https://worldview.stratfor.com/situa...eement-beijing

[Swordsmyth]

But in spite of signs of renewed economic activity in March, the country’s debt build-up has provoked increasing concern amongst Beijing’s policy makers, as it points to an underlying long-term financial fragility, particularly if trade war pressures intensify. Just last October during the Communist Party Plenary, Zhou Xiaochuan, then head of the country’s central bank, warned of a “Minsky moment“:

“When there are too many pro-cyclical factors in an economy, cyclical fluctuations will be amplified. If we are too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a ‘Minsky Moment’. That’s what we should particularly defend against.”

To elaborate on Zhou’s statement, the economist Hyman Minsky described how once the debt “disease” goes metastatic, there will come a “Minsky moment” (a term originally coined by economist Paul McCulley) when euphoria gives way to concern and then to panic liquidation and credit revulsion. When that dynamic is in full flower, policy makers are powerless to avert it, no matter how much they want to bring the punchbowl back. Governor Zhou’s public warning was no doubt in response to recent rapid increase of debt which, according to Professor L. Randall Wray, “increased from 162 percent to 260 percent of GDP between 2008 and 2016,” and remains “a topic of discussion, if not deep concern.”
It may seem odd to warn of a Chinese slowdown, given the recent renewed surge in exports and the corresponding rise in both the manufacturing and non-manufacturing purchasing managing indices (both the manufacturing and service gauges remain above 50, and therefore indicative of robust economic activity). But these gains ought to be viewed against the backdrop of a more hostile external environment for Chinese manufactured goods. Discussing the recently imposed tariffs on steel and aluminum, the New York Times reported that Trump has already provided brief exemptions to “Canada, Mexico, the European Union, Australia, Argentina, Brazil and South Korea” (countries that “account for more than half of the $29 billion in steel sold to the United States in 2017”), which reinforces the idea that it is largely China that remains the major target of Trump’s economic nationalists.
In that context, China’s ramped-up production in March could well be interpreted as an effort to evade the tariffs by exporting products into the U.S. under the wire, suggested economist Raymond Yeung of the ANZ group. If so, that could provoke further aggressive responses from Trump’s trade hawks, especially if it results in an expansion of the bilateral trade surplus with the U.S. Adding to the pressures, Reuters reports that “Top Trump administration officials are asking China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms and buy more U.S.-made semiconductors in negotiations to avoid plans to slap tariffs on a host of Chinese goods and a potential trade war.”
But how serious are these threats? Are they simply a case of “smoke and mirrors,” as the economist Dani Rodrik has suggested? China itself appears to be taking the risk of a trade war seriously, imposing retaliatory tariffs of up to 25 percent on 128 food imports from the U.S., an understandable negotiating posture given its position as a major creditor nation. But the very fact of its creditor status might presage problems for Beijing. If anything, history has shown that it is trade surplus nations, not debtors, that tend to be the biggest casualties of trade wars, as this account of America’s ill-fated Smoot-Hawley tariff imposition illustrates:

“World War I… made America the world’s creditor. The center of the financial world moved from London to New York, and billions of dollars were owed to large U.S. banks. The Smoot-Hawley Tariff threw inter-allied war-debt repayment relations into limbo by shutting down world trade. An international moratorium on debtor repayments to the United States froze billions in foreign assets, thus weakening the financial solvency of the American banks. Specifically, over $2 billion worth of German loans were obstructed by Germany’s inability to acquire dollars through trade to repay its debts. This same scenario played out in many other countries as well.”

China today occupies a creditor position comparable to the U.S. in the 1930s. Trump was certainly exaggerating when he suggested that “trade wars are good and easy to win.” But the U.S. is a largely self-sufficient economy; China is not—which is what Trump was implicitly highlighting when he made his comments (albeit, typically oversimplified and ignoring the fact that the U.S. itself still has quasi-bubbleized assets and very high levels of indebtedness).
Even if the trade war threat turns out to be more talk than action, there are other ways in which Beijing might risk a Minsky-style deflation. There is a very old idea from business cycle theory prior to the Second World War that private sector over-investment can become so unsustainably high that even without a fiscal/monetary shock, there could be a fall in autonomous investment. Once that begins, accelerator multiplier dynamics can lead to a cumulative economic contraction even if interest rates plummet and monetary conditions ease.
There are grounds for thinking this is an idea whose time has come again. Though fixed investment is very low in the U.S., it is not so globally, especially in China, which has a condition of over-investment that is historically unprecedented. A decline in global autonomous investment that threatens accelerator and multiplier dynamics should follow.
Some would argue that the global capex overinvestment problem is purely a product of low interest rates, but in China’s case, it is also a product of their economic model. Although the reforms undertaken over the past few decades have given China the appearance of a market economy, it is not in many important aspects, notably in regards to the allocation of capital, which is not market-determined.

More at: https://www.zerohedge.com/news/2018-...s-domestically

[Swordsmyth]

Chinese President Xi Jinping on Tuesday promised to open the country's economy further and lower import tariffs on products including cars, in a speech that comes amid rising trade tensions between China and the United States.Xi also said China would raise the foreign ownership limit in the automobile sector "as soon as possible" and push previously announced measures to open the financial sector.
"This year, we will considerably reduce auto import tariffs, and at the same time reduce import tariffs on some other products," Xi said at the Chinese Boao Forum for Asia in Hainan province.

The comments sent U.S. stock futures, the dollar and Asian shares higher.

More at: https://finance.yahoo.com/news/china...4--sector.html

[goldenequity]

Chinese President Xi Jinping on Tuesday promised to open the country's economy further and lower import tariffs on products including cars, in a speech that comes amid rising trade tensions between China and the United States.Xi also said China would raise the foreign ownership limit in the automobile sector "as soon as possible" and push previously announced measures to open the financial sector.
"This year, we will considerably reduce auto import tariffs, and at the same time reduce import tariffs on some other products," Xi said at the Chinese Boao Forum for Asia in Hainan province.

The comments sent U.S. stock futures, the dollar and Asian shares higher.

More at: https://finance.yahoo.com/news/china...4--sector.html

Did China just blink?

[Swordsmyth]

Did China just blink?

I hope so.