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Trade on agenda as China's top envoy visits US
by Staff Writers
Washington (AFP) Feb 9, 2018

China factory gate inflation slips to 14-month low
Beijing (AFP) Feb 9, 2018 - China's factory inflation eased to a 14-month low in January while consumer prices grew at their slowest rate in six months, official data showed Friday.

The producer price index (PPI) -- an important barometer of the industrial sector that measures the cost of goods at the factory gate -- came in at 4.3 percent year-on-year in January, according to China's National Bureau of Statistics (NBS).

January's PPI reading was the lowest since November 2016, though it was in line with forecasts by a Bloomberg News survey of economists.

It also dropped for the third consecutive month, with readings of 4.9 percent in December and 5.8 in November of last year.

The consumer price index (CPI) -- a main gauge of retail inflation -- rose 1.5 percent year-on-year, down from 1.8 percent in December and in line with forecasts.

NBS analyst Sheng Guoqing attributed the drop to Chinese New Year -- the country's largest holiday -- falling in January in 2017 but February this year.

"Declines in non-food inflation and producer price inflation will open the door to monetary policy easing this year," said Julian Evans-Pritchard of Capital Economics in a research note.

"The broader trend is that underlying price pressures are starting to cool on the back of weaker economic activity."

Other analysts took heart in the stable numbers from China's factories.

"The stable factory inflation suggests China's economy is steady and that's good news for the global economic recovery," Banny Lam, head of research at CEB International in Hong Kong told Bloomberg.

US Secretary of State Rex Tillerson welcomed Chinese state councillor Yang Jiechi to Washington on Thursday as the world's two most powerful diplomats talked trade, drugs and North Korea.

Yang is in Washington for two days at a time when relations between the top powers are dominated by the North Korean nuclear stand-off and President Donald Trump's concerns about their trade imbalance.

His first port of call was the State Department, where he held closed door talks and had a working lunch with Tillerson, who is keen to keep China on board with a diplomatic push to force Pyongyang to negotiate its own nuclear disarmament.

"During the meeting, both sides reaffirmed President Trump and President Xi's commitment to keep up pressure on North Korea's illegal nuclear weapons and missile programs," State Department spokeswoman Heather Nauert said.

"They discussed the need to achieve a fair and reciprocal bilateral economic relationship, and shared approaches to stemming the flow of deadly narcotics," she added.

Yang told Tillerson that the two countries could address trade disputes by further opening their markets to each other and "making a bigger cake of cooperation," the official Xinhua news service reported after the meeting.

Washington is also pushing China to support Trump's "maximum pressure" drive to force Pyongyang to abandon its quest to build nuclear-armed long-range missiles capable of hitting US cities.

"We hope that China will do more because we know that they can do more in terms of adhering to UN Security Council resolutions and sanctions that have been put in place against North Korea," Nauert said.

In the talks, however, Yang apparently stuck to China's long-standing position that the issues on the Korean peninsula "should be solved through dialogue and negotiation," Xinhua reported, implying that Washington's approach could damage peace efforts.

Nauert said some diplomatic conversations are best kept private but noted that: "We have a frank exchange of ideas and information, and our viewpoints. Our president has made it very clear his concerns about trade imbalances, that's the kind of thing that comes up."

China's long-standing trade surplus with the United States grew 10 percent last year to $276 billion, a sum Trump finds intolerable, and senior officials from both countries are in talks to try to head off a trade war.

"We're not seeking an adversarial relationship with the government of China," Nauert said.

"We are simply identifying actions that China has taken that undermine a rules-based order."

Washington is also pushing China for more cooperation on cutting off the flow of synthetic drugs and chemical precursors used in the production of narcotics to Latin America, as these are often smuggled into the United States and fuel an epidemic of opioid addiction.


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TRADE WARS
China 'worried' over US trade relations as surplus narrows
Beijing (AFP) Feb 8, 2018
China expressed concern on Thursday over the US ramping up trade investigations as official data showed its surplus with America narrowed in January after reaching record levels last year. This week China announced an investigation into imports of a US agricultural product after President Donald Trump's administration launched a spate of new trade tariffs and probes into Chinese goods. The Trump administration has shown no signs of letting up, with major decisions looming on Chinese aluminium ... read more

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