Starbucks shuts shops, suspends delivery in China’s Hubei amid virus outbreak By Reuters



BEIJING (Reuters) – Starbucks (NASDAQ:) has closed all shops and suspended delivery services in China’s Hubei province for the week-long Lunar New Year holiday, where a coronavirus outbreak originated from its capital Wuhan has caused 41 deaths in China.

Starbucks said on Saturday that the move is out of “health concerns” for its customers and employees, according to a post on China’s twitter-like Weibo. The central province of Hubei is home to nearly 60 million people.

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Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Starbucks shuts shops, suspends delivery in China’s Hubei amid virus outbreak


FILE PHOTO: visitor drinks coffee at a Starbucks outlet inside the Forbidden City in Beijing January 18, 2007. REUTERS/Claro Cortes IV

BEIJING (Reuters) – Starbucks has closed all shops and suspended delivery services in China’s Hubei province for the week-long Lunar New Year holiday, where a coronavirus outbreak originated from its capital Wuhan has caused 41 deaths in China.

Starbucks said on Saturday that the move is out of “health concerns” for its customers and employees, according to a post on China’s twitter-like Weibo. The central province of Hubei is home to nearly 60 million people.

Reporting by Sophie Yu and Brenda Goh; Writing by Yawen Chen; Editing by Michael Perry



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China’s Economy Grew 6% in Fourth Quarter as Demand Stabilized By Bloomberg



(Bloomberg) — China’s economy stabilized last quarter after slowing to the weakest pace in almost three decades, as rising demand and easing trade tensions supported sentiment.

  • Gross domestic product rose 6% in the final quarter of 2019 from a year earlier, the same as in the previous three-month period and the median estimate

Key Insights

  • The world’s second-largest economy expanded by 6.1% in 2019, slower than 6.6% the previous year
  • Industrial output rose 6.9% in December from the same period the previous year, versus the median forecast of 5.9%
  • Retail sales rose 8% versus an estimate of 7.9%
  • Fixed-asset investment rose 5.4% in the year, versus an estimate of 5.2%
  • The signing of the phase-one trade deal this week combined with recovering global demand have improved the outlook for Chinese factories and exporters in 2020. However, it remains to be seen whether that carries over into a sustained recovery, with increased investment and consumption domestically
  • Policy makers have signaled they are prioritizing economic stability in 2020, with stimulus to be kept basically unchanged
  • “The pace of slowdown should moderate, supported by a cyclical bottoming in the first half of 2020,” JPMorgan Chase (NYSE:) & Co. economists including Zhu Haibin wrote in a note. Yet the growth momentum will likely soften in the second half, because the implementation of the phase-one deal could be “bumpy” and the chances for further agreement are slim, he said.

Get More

  • The surveyed jobless rate stood at 5.2% at the end of 2019
  • China had 14.65 million newborns in the year, compared with 15.23 million in 2018
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



China’s state planner says approved projects in 2019 worth $195 billion By Reuters


China’s state planner says approved projects in 2019 worth $195 billion

BEIJING (Reuters) – China’s state planner said on Sunday that it had approved 157 fixed-asset investment projects in 2019, worth a total 1.33 trillion yuan ($195 billion).

National Development and Reform Commission spokeswoman Meng Wei told a news conference that China’s economy has the foundations to continue to operate stably in 2020.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Drugmakers slash prices to be eligible for China’s bulk-buy program By Reuters



BEIJING (Reuters) – Global pharmaceutical majors and generic drugmakers chopped by 53% on average prices of some of their off-patent products in the latest bidding round under China’s national bulk-buy program, government officials said late on Friday.

Beijing has been pushing forward the program where drugmakers have to go through a bidding process and cut prices low enough to be considered over generic copies and be allowed to sell their products at public hospitals via large-volume government procurement.

Some global firms such as AstraZeneca (L:) and Merck (N:) have already cautioned about intensifying price pressures on their mature brands in the world’s second largest drug market, as China expands the usage of the program.

In the latest bidding on Friday that involved 33 drugs and 122 companies, Bayer (DE:) slashed the price of its popular diabetes treatment Acarbose to 0.18 yuan ($0.0262) per pill, 78.5% lower than the price ceiling set by the government in December last year, elbowing some Chinese generic providers out of the tender, according to a Reuters calculation based on the preliminary results released by the authority overseeing the program.

Bayer was not immediately available for a comment.

“Products that won bids in this round of centralized procurement saw a huge price drop, which squeezes out unreasonable overpricing that has existed in drug distribution for a long time,” the authority said in a statement published alongside the preliminary result on Friday.

Sale prices of over 100 types of commonly used drugs are on average about 17 to 18 times of their manufacturing costs, the statement said.

Chinese copycats won bids for most of the 33 drugs, including generic versions for drugs ranging from Johnson & Johnson’s (N:) prostate cancer treatment Zytiga to Eli Lilly’s (N:) erectile dysfunction treatment Cialis, the results showed.

In Friday’s bidding, for products with two bid winners, 60% of the government procurement volume can be shared among the winners, according to official document detailing the tender rules released in December. For products with four winners and more, as much as 80% of the volume can be shared among the companies.

In the first round of the nationwide implementation of the bulk-buy program in September, global drugmakers including Sanofi (PA:) and Eli Lilly managed to cut some prices low enough to levels close to those offered by local generic makers.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



A $50 Billion Hole Adds Intrigue to China’s U.S. Export Binge By Bloomberg


© Reuters. A $50 Billion Hole Adds Intrigue to China’s U.S. Export Binge

(Bloomberg) — China’s $200 billion, two-year spending spree negotiated with the Trump administration appears increasingly difficult to deliver, with more than $50 billion of U.S. exports annually left out and many American businesses still uncertain about just what the expectations are.

While U.S. officials have stressed the reforms aimed at curbing intellectual-property theft and currency manipulation that China has agreed to in the “phase one” trade deal signed Wednesday, the Chinese pledge to buy more American exports has become an emblem of the deal to critics and supporters alike.

The administration has said those new exports in manufactured goods, energy, farm shipments and services will come over two years on top of the $130 billion in goods and $57.6 billion in services that the U.S. sent to China in 2017 — the year before the trade war started and exports were hit by Beijing’s retaliatory measures to President Donald Trump’s tariffs.But the list of goods categories in the agreement covers a narrower group of exports to China that added up to $78.8 billion in 2017, or $51.6 billion less than the overall goods exports to the Asian nation that year, according to a Bloomberg Economics analysis of the data. The goods trade commitment makes up $162.1 billion of the $200 billion total, with $37.9 billion to come from a boost in services trade such as travel and insurance.The target for the first year that the deal takes effect is to add $63.9 billion in manufactured goods, agriculture and energy exports. According to Bloomberg economist Maeva Cousin’s analysis, that would be an increase of 81% over the 2017 baseline. In year two, the agreement calls for $98.2 billion surge in Chinese imports, which would require a 125% increase over 2017.

Importantly for China, the accord requires those purchases to be “made at market prices based on commercial considerations,” a caveat commodities markets in particular have seized on.

The office of U.S. Trade Representative Robert Lighthizer, Trump’s chief negotiator, did not respond to questions about the purchase commitments on Thursday. The administration has, however, insisted that the buying, along with the rest of the deal, is subject to an enforcement mechanism.

Trump and his backers view the purchases as a well-deserved bounty for American farmers and manufacturers after decades of Chinese-made goods flooding the U.S., portraying Beijing’s promises almost as reparations. “Together, we are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers, and families,” the president declared on signing day.Critics argue that such pre-ordained demand amounts to a slide into the sort of government-managed trade that U.S. presidents abandoned decades ago and the very sort of act of central planning U.S. officials have spent years trying to convince China to walk away from.The purchase plan is based on what the administration insists is a specific — though classified — annex of Chinese commitments. The 20-page public version of that annex lists hundreds of products and services from nuclear reactors to aircraft, printed circuits, pig iron, soybeans, and computer services but no figures for purchases.

Testing Targets for Increase in Chinese Imports

Business groups have stopped short of calling those targets unachievable. But they have made clear they may never be met.“This is ambitious and it will create some stresses within the supply system,” said Craig Allen, the president of the U.S.-China Business Council.Among the questions remaining, Allen said, was whether China would lift its retaliatory duties on American products because U.S. tariffs will remain on some $360 billion in imports from China as Trump seeks to maintain leverage for a second phase of negotiations.Allen also made clear the overall purchase schedule left many U.S. companies uncomfortable even as they saw benefits in other parts of the deal. “The vast majority of our members are looking for no more than a level playing field in China,” Allen said. “We are not looking for quotas or special treatment.”The deal details commitments to lift non-tariff barriers on many agriculture imports such as chicken and beef and ease the way for the approval of genetically modified crop strains that have taken years in the past. It also will open up the market to credit card companies, ratings agencies and insurers. All those things should encourage trade.But for many manufacturers, what is changing remains less clear.Major exporters such as Boeing (NYSE:) Co., whose CEO Dave Calhoun attended Wednesday’s signing ceremony, have largely stayed mum about what exactly the deal will mean for their business with China.Trump has tweeted that the deal includes a Chinese commitment to buy $16 billion to $20 billion in Boeing planes.

But in a statement welcoming the deal, Boeing would only say that it was “proud that Boeing airplanes will continue to be a part of this valued relationship” with China, which is its largest international market, accounting for $13.8 billion in sales in 2018.While the People’s Republic hasn’t ordered Boeing aircraft since 2017, Chinese airlines have continued to take new aircraft from Boeing and U.S. lessors. But deliveries to China tumbled to just 45 aircraft last year from 192 jetliners in 2018 amid the trade war and after Boeing was barred from shipping the 737 Max due to a global grounding imposed after two fatal accidents.German carmaker BMW is one of the most likely candidates to benefit from a Chinese commitment to buy U.S.-made vehicles. It exported 81,000 vehicles to China from its plant in South Carolina in 2017 and saw that number fall to just over 46,000 last year, with much of that decline coming because it started production of its X3 in China.

But the carmaker declined to comment on how the new deal may change its export volumes to China. In the past it has put the cost of the trade wars at 300 million euros in 2018 alone.

The text specifically includes “nuclear reactors” on the list of products to be bought by China, which is building more nuclear capacity than any other country according to the World Nuclear Association data. China’s plans include at least four reactors using the AP1000 design from Westinghouse Electric Co.

‘Remain Skeptical’

However, China said last year that it was starting to favor a homegrown reactor design for new power plants. And Westinghouse, which went bankrupt in 2017 and was later bought, has said it is now more focused on supplying components and taking apart decommissioned reactors than on selling reactors.

“I remain skeptical of any significant U.S. exports of nuclear technology to China except for possibly fuel for the AP1000 reactors,” Chris Gadomski, BloombergNEF nuclear analyst, said by email. A Westinghouse spokeswoman said Thursday she wasn’t even aware that the deal included nuclear reactors.

Intriguingly, Trump’s new China pact includes plans for exports of American iron and steel, a potential gain for an industry close to the president that has benefited from his tariffs and complained about Chinese production and overcapacity for years.

The text of the agreement lists iron and steel products ranging from pig iron to stainless steel wire and railway tracks, but steel industry sources said they had been caught by surprise and not been given any additional details on China’s purchase commitments.U.S. Steel Corp. and Cleveland-Cliffs Inc. — the biggest U.S. iron-ore producer — declined to comment. China produces more than 50% of the world’s steel, and has drawn criticism from around the world for flooding global markets with cheap steel.



China’s economy expanded by 6.1% in 2019 By Investing.com


© Reuters.

By Cornelia Zou

Investing.com- China’s economy grew 6.1% in 2019, the lowest rate of growth since 1990, according to gross domestic product (GDP) growth data released by the National Bureau of Statistics Friday morning.

The rate is lower than the expected 6.2% but still within the 6% to 6.5% target the central government had set in early 2019. The world’s second-largest economy grew 6.6% in 2018.

Growth in the fourth quarter of 2019 came in at 6%, unchanged from the previous quarter.

Industrial output rose 6.9% in December year on year versus the median forecast of 5.9%; and retail sales rose 8%, also higher than the estimated 7.9%

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



China’s yuan gains after U.S. drops China FX manipulator label By Reuters



By Yoruk Bahceli

LONDON (Reuters) – China’s yuan climbed to its highest level since July on Tuesday and the Japanese yen plumbed eight-month lows as the U.S. Treasury Department reversed its decision in August to designate China as a currency manipulator.

The Treasury Department’s new report on currency manipulators could help explain the reason for the Swiss franc surging to a 33-month high against the euro, some analysts said. [L8N29J36G] Washington included Switzerland on a watchlist, although other market participants said it had been expected and broader safe-haven flows were behind the franc’s move.

The announcement on the yuan came as Chinese Vice Premier Liu He arrived in Washington ahead of Wednesday’s signing with U.S. President Donald Trump of a preliminary trade agreement aimed at easing tensions between the two countries.

“Washington’s decision to lift its designation of currency manipulator on China has added to the positive mood that has been already in place ahead of the signing of the trade deal,” said Minori Uchida, chief currency strategist at MUFG Bank.

People familiar with the negotiations said its removal was an important symbol of goodwill for Chinese officials.

China has also pledged to buy almost $80 billion of additional manufactured goods from the United States over the next two years as part of a trade war truce, according to a Reuters source.

The dollar rose as much as 0.3% against the Japanese yen to 110.22 yen , its highest since late May versus a currency that tends to weaken when investors are buoyant. It last stood at 109.97 yen.

In onshore trade, the yuan strengthened to as high as 6.8731 per dollar , its strongest since late July. China’s central bank set the midpoint of the yuan’s daily trading band at 6.8954 per dollar on Tuesday, its strongest fixing since Aug. 1.

The also firmed to its strongest level in six months, hitting 6.8662 yuan before easing off .

Chinese forecast-beating trade data also helped to boost optimism about the economy and the yuan.

Despite the optimism, some analysts said there were signs of a bid for safety.

The Swiss franc rose to its strongest since April 2017 at 1.0763 against the euro (), up nearly 0.5%. It rose 0.4% versus the dollar .

Some analysts said this reflected nervousness, as risky emerging market currencies such as the South African rand and Turkish lira fared poorly.

“The interesting question is how long can this optimism last, how much further can it go. A lot surely has to be in the price,” said Jane Foley, senior FX strategist at Rabobank.

“If we were to get another rise in tensions between the U.S. and China and if we were to turn our attention to phase two (of the trade deal)… it’s very likely that we will see the renminbi falling again,” Rabobank’s Foley said, adding that the currency might face a low at the 7.18 level hit in September.

In Europe, sterling weakened further on Tuesday, hitting a seven-week low against the euro at 85.95 pence before recovering. ()

The currency has come under pressure from weak data releases, raising the chances of a cut to interest rates by the Bank of England. Money markets forecast an almost 50% probability of a cut at a meeting on Jan. 30.

The euro was mildly supported by risk-on sentiment, remaining off a two-week low of $1.10855 () hit on Friday, last trading at $1.1124.

The gained 0.1% to 97.43 ().





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China’s Exports, Imports Both Rise in 2019 By Investing.com


© Reuters.

Investing.com – China’s exports and imports both rose in 2019, data from the General Administration of Customs showed on Tuesday.

China’s in December rose 7.6% from a year earlier, customs data showed. It was the first gain in China’s exports since July 2019 and the fastest growth rate since March 2019.

Meanwhile, in December rose 16.3% from a year earlier.

In yuan terms, 2019 exports rose 5% from a year ago while imports 1.6% in the same period.

On Monday, the U.S. removed China from a list of countries considered currency manipulators, the Treasury Department announced.

The Chinese yuan jumped today amid news that the U.S. will no longer label China as a currency manipulator. The two sides are expected to sign the phase one trade deal this week.

China will celebrate the week-long Lunar New Year holiday from Jan. 24.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Europe Looks to Follow China’s Lead Taming Trump on Trade By Bloomberg



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President Donald Trump’s relationship with European leaders has often been testy and the same applies to his aides. Then again, transatlantic relations have been rescued from the brink a number of times thanks to the personalities involved.

Which is why new European trade commissioner Phil Hogan’s visit to Washington this week is more important than most. Even if the big show while Hogan makes his first tour in his new post will be Wednesday’s signing of a long-awaited “phase one” deal between the U.S. and China.

When then-European Commission President Jean-Claude Juncker arrived in Washington in July 2018, many of those travelling with him were bracing for a turn to the worse in trade relations. Trump was threatening to impose tariffs on imported European cars and had become frustrated with Europe’s retaliation to steel tariffs he had rolled out.

Worried at what was unfolding, White House economic adviser Larry Kudlow reached out to Christine Lagarde, then the International Monetary Fund’s managing director, according to people familiar with the events. She suggested he get in touch with Martin Selmayr, Juncker’s top lieutenant. Within hours the two were huddled in the restaurant of the Hay Adams Hotel across from the White House, hashing out the terms of a tariff truce.

The mood between the two sides, however, remained tense. Until, that is, the next morning Juncker, a gregarious former prime minister of Luxembourg, marched into the Oval Office and planted a big kiss on the American president.

The atmosphere instantly lifted, according to people who were in the room. Within a few hours the two presidents were announcing what became known as the Rose Garden truce to a hastily called press conference even as some of their aides continued to stew.

Then again even a presidential peck has limited currency. The ceasefire has been fragile ever since, and the negotiations it triggered have gone nowhere. The EU is also back in the Trump tariff sights thanks to France’s introduction of a digital services tax. Transatlantic divisions over how to deal with Iran aren’t helping.

Enter Hogan. The politically savvy Irishman served as agriculture commissioner in the last European Commission and is no stranger to Washington. But Hogan has had a difficult start. He annoyed some in the White House and across 17th street at the U.S. Trade Representative’s office when in an interview soon after his appointment he told Irish radio that one of his goals would be “to get Mr Trump to see the error of his ways” on trade.

The interview was in line with what European officials say is their plan to take a more robust approach to dealing with Trump and his tariffs. But it so angered U.S. officials that Kudlow summoned the EU’s ambassador to Washington, Stavros Lambrinidis, to protest.

Hogan needs a reset. And for that he may also want to look up another trade negotiator in town this week: China’s Vice Premier Liu He. Liu has commanded the respect of his U.S. counterparts over three years of tough interactions, part of the reason he’s signing a deal at the White House on Wednesday morning. He may have some tips.

Charting the Trade War

Caution gripped the U.K. economy ahead of last month’ s general election, fueling speculation the Bank of England is moving closer to cutting interest rates. GDP unexpectedly fell in November, leaving output just 0.6% higher than a year earlier — the worst performance in more than seven years.                     

Today’s Must Reads

  • Victory lap | After three years of tweets and tariffs, President Donald Trump has arrived at his China moment. Now the challenge turns to ensuring Beijing follows through.
  • No bull cause | Washington will likely take time to lift a ban on Brazilian fresh-beef imports amid frustration at the South American country’s decision to keep quotas on tariff-free imports of U.S. ethanol.
  • Chip shot | South Korea’s chip exports showed signs of revival after more than a yearlong slump, supporting optimism that the worst is behind for the trade-dependent economy.
  • Metal fatigue | A drop in American factory jobs shows Trump’s tariffs haven’t yet solved a key issue haunting U.S. steelmakers: China’s subsidizing of its own industry.
  • Over baht | Thailand’s Finance Minister Uttama Savanayana said any measures authorities take to curb gains in the currency won’t disrupt the “market mechanism” of the baht.

Economic Analysis

  • Risks in 2020 | Euro-Area GDP growth has slowed on global uncertainty tied to trade and Brexit.
  • Looking up | Singapore’s economy is poised for 2020 rebound after the trade hub suffered last year.

Coming Up

  • Jan. 14: China trade balance
  • Jan. 14-16: EU trade chief Phil Hogan plans trip to Washington
  • Jan. 15: U.S., China plan to sign phase-one deal in Washington
  • Jan. 21-24: Business and government leaders meet at the World Economic Forum’s annual meeting. Stay on top of all of the action via Bloomberg’s Davos Diary newsletter. Click here to subscribe.

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