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Signs Point to China, US Deal to Avert Further Tariff Hike

As China and the United States resume high-level talks in Washington Thursday, there are signs that the two may be closing in on a deal.

Reuters news agency is reporting that top trade officials from both sides are trying to hammer out the details of six broad agreements aimed at resolving the most difficult issues from forced technology transfers, to state subsidies and cyber theft.

Earlier this week, President Donald Trump said there is no “magical date” for reaching a trade deal, a comment some felt suggests that the March 1 deadline, which could trigger a steep hike in tariffs from both countries, could be postponed if progress is being made.

Meanwhile, a senior Communist party adviser, speaking at a forum organized by the Hong Kong-based South China Morning Post, predicted Washington and Beijing would reach a trade deal in early March . He also said that Meng Wanzhou, chief financial officer of Chinese tech giant Huawei, is likely to be released by April or May.

Speaking on the sidelines of a conference hosted by the newspaper, Xie Maosong, an adjunct professor at the Central Party School, said he was confident that is what would happen because of what he called the countermeasures China had taken.

Those “countermeasures” include Bejing’s detention and charging of two Canadian citizens — Michael Kovrig and Michael Spavor — for endangering state security.

Meng is currently on bail in Canada awaiting possible extradition to the United States.

According to a Reuters report on Thursday, U.S. and Chinese negotiators are working on six broader agreements as well as a 10-item list of shorter-term measures.

Analysts tell VOA, that while it appears a more comprehensive deal is coming together, the details of any agreement will be key in determining whether it is a success or just an opportunity to kick long-standing issues down the road.

Christopher Balding, an economist and associate professor at Fulbright University Vietnam, said deals like the one China and the United States are working on take time.

There will be a lot of paperwork and time spent making sure individual agreements for industries are worked out, he said.

“The other issue that is going to be the real hang up, and this is going to be the real hang up for Beijing, is that there is some type of verification mechanism,” Balding said. “It’s not just the agreement, but what comes after the agreement.”

William Choong, a senior fellow with the International Institute for Strategic Studies in Singapore, said while they are two entirely different issues, the way President Trump is handling China is similar to how he is working with North Korea.

Choong said much like the meeting between Kim Jong Un and Trump in Singapore led to a North Korea deal 1.0, next week we’re going to get a 2.0 deal with North Korea in Vietnam.

The trade deal that is coming up is similar, he said.

“It will not be the all and end all. We are going to see more iterations along the road,” Choong said. “Whatever agreement they settle on, that the Americans and Chinese agree on, will be enough to let go of some of the steam, some of the pressure that has built up.”

That will give Trump a chance to kick the March 1 deadline further down the road, he added.

Chinese state media reports on Thursday were upbeat about the meetings.

An editorial in the China Daily, entitled “Decisive Talks Must be Forward Thinking,” said, “both sides should cherish the narrowing of their differences that has been achieved, as it has involved more than just picking off low-hanging fruit.”

Calling President Trump’s suggestion that the deadline could be delayed a “conciliatory signal,” the paper also added that it would be “naïve to think that such a Gordian knot of differing goals and ambitions will be simple to unravel, especially as the discussions are now about the most divisive and touch-a-nerve issues.”

It also said Washington needs to be realistic about what China can and cannot do. What that actually entails will only be clearer when the complete agreement is released.

“China more than anything wants this to go away because it is hindering a lot of their confidence building measures and investment decisions, that’s what they are really hoping to get out of it [a deal],” Balding said.

Choong agrees, noting that what Beijing wants is to get Trump off its back. But, he added, how China could change course enough on issues such as forced technology transfers is unclear.

“I do not know how the Chinese are going to put something that is significant enough in the agreement to actually placate the Americans,” Choong said. The Chinese, he said, are looking for a way to play Trump, much like North Korea has done.

“If Trump gets enough on paper that looks satisfactory, he can go away to the Twitter-verse and say look I’ve got this big deal with the Chinese.”

 

 

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НБУ встановив курс гривні на рівні 27 грн за долар

Національний банк України зміцнив офіційний курс гривні на 22 лютого до 27 гривні за долар порівняно зі встановленим на сьогодні курсом 27,09 грн за дол.

Курс гривні до євро на 22 лютого складає 30,65 порівняно з 30,72, встановленому на сьогодні.

У середині січня під час своєї підсумкової доповіді у Верховній Раді голова Національного банку України Яків Смолій заявив, що обсяги міжнародних резервів України сягнули найвищого рівня за останні п’ять років завдяки зміцненню гривні.

Читайте також: НБУ стримує падіння долара на рівні 27 гривень

За його даними, національна валюта протягом року зміцнилася на 1,4%, що дозволило Нацбанку купувати валюту на міжбанківському ринку.

Зміцненню гривні, пояснив він, сприяла жорстка монетарна політика, сприятливі ціни на український експорт і високий врожай.

 

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НБУ стримує падіння долара на рівні 27 гривень

Національний банк України 21 лютого викуповує на міжбанківському валютному ринку надлишки долара США, не допускаючи таким чином значного зміцнення гривні.

«Попит і пропозиція майже вирівнялися. Уповільнення просідання курсу виникло за рахунок виходів НБУ з викупом надлишків долара в останні кілька годин сесії. Всього регулятор купив уже не менш як 10 мільйонів доларів за ціною в межах 27 гривень», – вказує профільний сайт «Мінфін», який відстежує перебіг торгів на міжбанку.

Станом на 12:00 НБУ встановив довідковий курс на рівні 26 гривень 99,95 копійки за долар.

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Resumption of High-level US-China Trade Talks Raises Hopes

The Trump administration is set Thursday to resume high-level talks with Chinese officials, aiming to ease a trade standoff that’s unnerved global investors and clouded the outlook for the world economy.

A Chinese delegation led by Vice Premier Liu He will meet in Washington with a U.S. team led by Trade Representative Robert Lighthizer and including Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross as well as Larry Kudlow, a key White House economic adviser, and Peter Navarro, a trade adviser. The talks are expected to end Friday.

The world’s two biggest economies are locked in a trade war that President Donald Trump started over his allegations that China deploys predatory tactics to try to overtake U.S. technological dominance. Beijing’s unfair tactics, trade analysts agree, include pressuring American companies to hand over trade secrets and in some cases stealing them outright. 

To try to force China to change its ways, Trump has imposed tariffs on hundreds of billions in Chinese goods. Beijing has retaliated with tariffs of its own. China rejects the allegations and complains that Washington’s goal is simply to cripple a rising economic competitor.

On March 2, the Trump administration has warned, it will escalate its import taxes on $200 billion in Chinese goods from 10 percent to 25 percent if the two sides haven’t reached a resolution by then. But in recent days, Trump has signaled that he may be willing to extend the deadline if negotiators are making progress.

The conflict has rattled markets. It’s also fanned uncertainty among businesses that must decide where to invest and whether Trump’s tariffs – which raise the cost of the affected imports – will be in effect long enough to justify replacing Chinese suppliers with those from countries not subject to the tariffs. 

The International Monetary Fund, the World Bank and the Organization for Economic Cooperation and Development have all downgraded their forecasts for the global economy, citing the heightened trade tensions.

After meetings last week in Beijing, Lighthizer said the two countries had “made headway.” 

And citing upbeat comments from the two countries, Xingdong Chen, chief China economist at BNP Paribas, said the negotiators are “likely to make progress, convincing Trump it is worth extending the tariff truce if necessary.”

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US Trade Representative to Testify on China Next Week

 U.S. Trade Representative Robert Lighthizer will testify next week at a U.S. House of Representatives hearing on U.S.-China trade issues, a spokesman for the House Ways and Means Committee said on Wednesday.

Lighthizer has been the lead negotiator in ongoing trade negotiations with Beijing as the world’s two largest economies seek to find agreement amid a bitter dispute that has seen both sides impose tariffs on imports.

In a statement, the committee said the hearing was scheduled for Feb. 27, just days ahead of President Donald Trump’s March 1 deadline that the Republican U.S. leader has said could slide.

China and the United States began their latest round of talks this week.

 

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Нацбанк зміцнив курс гривні до 27,09 грн/дол

Національний банк України зміцнив офіційний курс гривні до долара на 21 лютого до 27,09 гривні за долар порівняно з 27,17 грн/дол, встановлених на сьогоднішній день.

Курс гривні до євро на 21 лютого складає 30,72 порівняно з 30,68 сьогодні.

У середині січня під час своєї підсумкової доповіді у Верховній Раді голова Національного банку України Яків Смолій заявив, що обсяги міжнародних резервів України сягнули найвищого рівня за останні п’ять років завдяки зміцненню гривні.

Читайте також: Навіщо Україні гроші МВФ і скільки доведеться повернути​

За його даними, національна валюта протягом року зміцнилася на 1,4%, що дозволило Нацбанку купувати валюту на міжбанківському ринку.

Зміцненню гривні, пояснив він, сприяла жорстка монетарна політика, сприятливі ціни на український експорт і високий врожай.

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Putin Announces Social Handouts in Bid to Stop Opinion Poll Slide

A year ago, Russian President Vladimir Putin sailed to victory in what challengers dubbed a “filthy election.” Facing weak candidates — some likely encouraged to run by a Kremlin eager to give the poll a veneer of greater competitiveness — Putin basked in his re-election, promising a flag-waving rally of loyalists off Moscow’s Red Square that “success awaits us.”

But with less than a month to go before marking the anniversary of his re-election, Putin faces rising public frustration with his rule and unprecedented dips in his approval ratings. In a recent opinion poll, nearly half of those surveyed said the country is heading in the wrong direction.

Putin, who has held power since succeeding Boris Yeltsin in 1999, had always been guaranteed victory in an election timed to coincide with the fourth anniversary of the Russian annexation of Crimea. Many pro-Putin voters interviewed by VOA last year said they were backing him because he had restored Russian strength and transformed the country from a regional power to a global player.

The domestic political landscape has changed since then, and the spell of Russian foreign adventurism doesn’t have the pull it once had, say analysts. The 66-year-old Russian leader appeared to acknowledge that Wednesday in his first address to parliament since his re-election.

Shift in focus

He went much more lightly on foreign and military issues in contrast to his last annual address in which he saber-rattled and unveiled a raft of new missiles, bragging about their stealth and speed. This time, he focused more on domestic challenges.

 

In response to rising public anger at the country’s economic malaise, Putin pledged to increase spending on development and social benefits, announcing a jump in child benefits along with tax breaks for families. He also pledged to almost double disability support payments. Putin boasted that for the first time, the country’s currency reserves cover external debt obligations and said economic growth should exceed 3 percent by 2021.

“Thanks to many years of common work and the results achieved, we can now direct and concentrate enormous financial resources on our development goals for our country,” Putin said.

“Nobody gave these funds to us; we did not borrow them. These funds were earned by millions of our citizens, the whole country,” he added.

“In the near future, this year, people should feel real changes for the better,” Putin pledged.

A tough sell

Whether Putin can deliver and reverse his growing unpopularity waits to be seen.

Analysts say Russians are unlikely to be satisfied with just words when it comes to quality of life issues, including the delivery of public services, municipal amenities or, more often than not, their absence, and on health and safety issues. It is the everyday “parochial” issues that worry them, including the potentially deadly consequences of shoddy and unsafe municipal housing and the reckless discarding of trash as Russia runs out of landfill sites.

Last year, thousands protested when dozens of children, in the town of Volokolamsk near Moscow, were hospitalized with suspected poisoning, the result of noxious gases emanating from an overfull local landfill.

In the past, when his political star has waned, Putin has turned to adventurism abroad to shore up support, offering foreign policy triumphs to whip up his domestic standing. That is unlikely to work moving forward, say analysts such as Mikhail Dmitriev.

Urban-rural divide

Dmitriev says polling data suggest the Kremlin is heading for a rocky few months with signs that dissent is likely to mount, and not just among the usual middle-class Putin skeptics and critics in the Russian capital and St. Petersburg, but in non-metropolitan Russia, in the smaller towns and villages, which traditionally have been the backbone of his support.

Raising the retirement age last year triggered the slide in Putin’s popularity. Cuts to salaries and sluggish economic growth added to the drag on his approval ratings, pollsters say. Real incomes have fallen by more than 10 percent since 2014, and nearly 40 percent of Russians say their material well-being has worsened just in the last 12 months.

Alexander Baunov of the Carnegie Moscow Center, a research institution, noted in a commentary earlier this month that ordinary workers are becoming more vexed with the Kremlin’s failure to deliver higher standards of living, as Putin promised he would do during the election campaign.

“Increasingly he is getting into fights with real Russians who want to complain about government policies. Last September, when he visited the Zvezda shipyard in the Russian Far East, the president got into an argument with the workers there about their salaries. (The transcript of their conversation in which Putin massively overestimated what they were paid was subsequently removed from the Kremlin website),” according to Baunov.

Baunov says the Putin system is increasingly being found wanting and the Russian president will not be able to deliver on the growing demand for economic redistribution “at the expense of the country’s rich capitalists,” in effect the friends of Putin and businessmen close to the Kremlin.

 

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OK for Direct US Flights Moves Vietnam Into Economic Fast Lane

The U.S. decision last week to permit Vietnam to fly its commercial aircraft directly to American airports is seen as a continuation of improving relations and follows other signs of international recognition for Hanoi.

Observers say the breakthrough shows that major countries including the United States take Vietnam ever more seriously after more than three decades of brisk economic development and foreign policy that includes balancing relations with its communist neighbor China without worrying the West.

“It’s been a slow and progressive bringing back [of] Vietnam into the international community,” said Adam McCarty, chief economist with Mekong Economics in Hanoi. “It’s been this continual process from the Vietnamese side of being caught, as they have been historically for hundreds of years, between larger powers.”

The Federal Aviation Administration’s award of a “category 1” rating for Vietnam means the country meets international safety standards. Vietnamese airlines can get permits now from the administration to open flights to the United States and carry the codes of U.S. carriers, the FAA said in a statement February 14.

US officials see change

Vietnamese officials knew the significance of the U.S. market in 2012, when they started working toward the FAA category 1 rating, Communist Party news website Nhan Dah reported Monday. They set out to solve 49 safety problems that the FAA found a year later, the website added.

The FAA inspected Vietnam’s civil aviation schemes again last year and gave high marks in most areas. It found just 14 “individual and not systematic problems,” the report says.

Clinching category 1 status from the world’s largest economy follows other signs of growing recognition.

The U.S. ran a $29.3 billion trade deficit with Vietnam in the first nine months of last year, but Washington did not make it a big issue. China and the United States, however, have been locked in disputes for about the past year partly because of China’s trade surplus with the United States.

U.S. President Donald Trump, who praised Vietnam’s economic momentum in 2017, is scheduled to visit Hanoi next week for his second summit with North Korean leader Kim Jong-un. Both sides picked Vietnam as host because it’s seen as geopolitically neutral.

Trump and his “hawkish colleagues” will see Vietnam as distinct from China in terms of trade, McCarty said.

“The degree of economic and trade closeness between Vietnam and the United States is always increasing,” said Tai Wan-ping, Vietnam-specialized international business professor at Cheng Shiu University in Taiwan. “Apart from Vietnam having trade deals, in substance the degree of progress is extremely high.”

Bigger economy, more fliers

Foreign investment in Vietnamese manufacturing is fueling economic growth of 6 to 7 percent since 2012. That trend is growing the middle class to about one-third of the 93 million population by next year, the Boston Consulting Group estimates.

Citizens are spending some of their new wealth on airfares.

The country saw 94 million passengers in 2017, including 13 million foreign nationals, up 16 percent over 2016. The domestic civil aviation industry has grown 17.4 percent over the past decade and the International Air Transport Association projects Vietnam will become the world’s fifth fastest growing aviation market by 2035.

Foreign investors are expected to keep flying in, too. In January Vietnam formally joined the 11-country Comprehensive and Progressive Trans Pacific Partnership, a free-trade deal encompassing about 13.5 percent of the world economy. The European Union expects to ratify its own trade pact with Vietnam.

As part of a 10-member bloc of Southeast Asian countries, Vietnam trades freely with China. But political scientists say Vietnam avoids favoritism toward China, despite its having a similar political system and its significance as a source of raw materials. Vietnam has vied with China over territory for centuries and prefers a multi-country foreign policy today.

Loads of returnees, fewer tourists

Vietnamese in the United States are likely to pack the eventual direct flights as relatively few American tourists visit Vietnam, compared to other sources, McCarty said. Some Vietnamese-Americans go back to visit; others to invest.

The Migration Policy Institute estimates there are about 1.3 million people of Vietnamese heritage live in the United States today, many relocated after the U.S.-backed former South Vietnam lost to the Communist north in the 1970s. Foreign tourism to Vietnam surged to 14.1 million in the first 11 months of last year, led by citizens from China and South Korea.

 

“There are residents in the U.S. itself, so that alone would be good enough for airline connections if they see fit to,” said Song Seng Wun, regional economist in the private banking unit of CIMB in Singapore,  “Every country on the planet has representation in the U.S. population in one way or another. Obviously therefore it makes economic sense, commercial sense to have connectivity.”

Passengers on the eventual direct flights would avoid today’s stopovers in places such as Hong Kong and Taipei, Tai said.

 

 

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