China says in principle door is open to talks with U.S. on trade

China’s door to talks is open in principle, the country’s Foreign Ministry said on Monday, a day after Beijing warned that any trade and business deals reached with Washington would be void if the United States implemented tariffs.

The United States and China have threatened tit-for-tat tariffs on goods worth up to $150 billion each, as U.S. President Donald Trump has pushed Beijing to open its economy further and address the United States’ large trade deficit with China.

The two countries ended their latest round of negotiations on Sunday, with U.S. Commerce Secretary Wilbur Ross and his delegation leaving Beijing without making a public statement, and China making no mention of any new agreements.

Following Chinese Vice Premier Liu He’s talks with Ross, China referred instead to a consensus reached last month in Washington, when China agreed to increase significantly its purchases of U.S. goods and services.

It also warned that any tariffs and other trade measures implemented by Washington would derail any agreements between the two sides.

Foreign Ministry spokeswoman Hua Chunying referred questions to the country’s Commerce Ministry when asked at a regular news briefing when and where a next round of talks might occur, and if Liu was preparing to go to the United States.

China is sincere in wanting to “appropriately resolve” the problem via talks, she added, without elaborating.

China, HK stocks climb on chances of North Korea-U.S. summit

Asian Stock Markets

China and Hong Kong stocks climbed on Monday, on signs the United States and North Korea were still working towards holding a summit.

The CSI300 index rose 0.7 percent to 3,842.47 points at the end of the morning session, while the Shanghai Composite Index gained 0.2 percent to 3,146.85 points.

The Hang Seng index added 0.6 percent to 30,758.49 points, while the Hong Kong China Enterprises Index climbed 0.6 percent to 12,117.39 points.

U.S. President Donald Trump said on Sunday a U.S. team had arrived in North Korea to prepare for a proposed summit between him and North Korean leader Kim Jong Un, which Trump pulled out of last week before reconsidering.

Sentiment was also aided as worries eased over the trade tensions between China and the United States, after U.S. reached a deal to keep China's ZTE in business.

The Trump administration told lawmakers the U.S. government has reached a deal to put Chinese telecommunications company ZTE Corp back in business after it pays a significant fine and makes management changes, a senior congressional aide said on Friday.

Chinese Vice President Wang Qishan said on Friday there would be no winners if there was a trade war between China and the United States, but said Beijing had to be ready for any turn of events.
Investors also found solace after data showed profits earned by Chinese industrial firms in April rose at their fastest pace in six months.

Around the region, MSCI 's Asia ex-Japan stock index was firmer by 0.39 percent while Japan's Nikkei index was up 0.08 percent.

The yuan was quoted at 6.3902 per U.S. dollar, 0.02 percent firmer than the previous close of 6.3917.

The largest percentage gainers in the main Shanghai Composite index were Weilong Grape Wine Co Ltd up 10.03 percent, followed by Changbai Mountain Tourism Co Ltd gaining 10.02 percent and Suzhou Douson Drilling&Production Equipment Co Ltd up by 10 percent.

The largest percentage losers on the Shanghai index were Inner Mongolia BaoTou Steel Union Co Ltd down 8.46 percent, followed by Guangdong Dcenti Auto-Parts Stock Ltd Co losing 8.16 percent and Jiangsu Rutong Petro-Machinery Co Ltd down by 8.09 percent.

The top gainers among H-shares were CSPC Pharmaceutical Group Ltd, which climbed 5.18 percent, followed by PetroChina Co Ltd, which gained 4.63 percent and Air China Ltd that rose 3.83 percent.
The three biggest H-shares percentage decliners were China Gas Holdings Ltd, which fell 4.44 percent, CNOOC Ltd , which dropped 2.0 percent and ZhongAn Online P & C Insurance Co Ltd down by 1.0 percent.

As of 0402 GMT, China's A-shares were trading at a premium of 20.04 percent over the Hong Kong-listed H-shares.

China's 'petro-yuan' could advance with Iran sanctions

European Stock Markets

China is positioned to be a chief beneficiary of the U.S. decision to withdraw from the Iran nuclear deal as it would give China leverage to demand oil imports be priced in yuan, several currency experts said on Thursday. 

President Donald Trump is preparing to impose new sanctions on Iran, the White House said on Wednesday, following the U.S. withdrawal from the multinational 2015 agreement that stalled Iran’s nuclear program.

The sanctions would aim to limit global trade of the oil producer’s crude. The effects may be muted as major Asian importers, China chief among them, are likely to continue buying Iranian oil.

The People’s Republic stands to benefit if it can use its leverage as the world’s largest importer of crude by insisting that its oil purchases from Iran be priced in yuan.

Oil is priced and traded in U.S. dollars because of the dominance of the dollar-denominated Brent and West Texas Intermediate benchmarks.

Pricing imports in yuan would therefore spare China the cost of exchanging dollars, and would increase the use of the renminbi in global financial trade, which could ultimately hurt the dollar’s international clout.

Iran’s exports are expected to decrease, as are foreign investments in the country.

That would hurt not just Iran’s economy but also the dollar’s liquidity, as the global oil trade undergirds the greenback, said Edward Al-Hussainy, senior analyst, global rates and currency at Columbia Threadneedle in Minneapolis. This provides Iran an incentive to approach the People’s Bank of China to discuss a yuan-denominated deal.

During the last round of sanctions prior to the nuclear deal, Iran’s oil supplies fell by around one million barrels per day. But its oil minister said on Thursday that Trump’s decision to quit the pact would not affect Tehran’s exports.

In the interest of exerting more control over the price of oil imports, China in March launched a crude futures exchange that could become a yuan-denominated benchmark to rival Brent and WTI.


Shortly after the exchange launched, Reuters reported on March 29 that Chinese regulators had informally asked a handful of financial institutions to prepare for pricing China’s crude imports in the yuan, according to three sources at some of the financial firms.

Both endeavours are part of a larger effort by Beijing to establish its currency internationally.

China has further incentive to establish an interest in Iran’s oil industry, as the country lies at the crossroads of China’s “One Belt, One Road” project, which aims to invest more than $1 trillion in infrastructure from railroads and ports to energy, in more than 60 countries spanning Europe, Africa and Asia.

Fitch Sounds Warning on Hong Kong Banks, Citing China Risks

Asian Stock Markets

Fitch Ratings Ltd. cut its assessment of Hong Kong banks’ operating environment due to the territory’s tighter links to the mainland economy.

Fitch said in a statement that they believe that Hong Kong’s growing connectivity with China’s economy and financial system creates risks, adding that China’s governance standards, as measured in the World Bank’s indicators, are substantially lower than Hong Kong’s.

The ratings company said it also took into account risks in Hong Kong due to above-trend credit growth and high property price inflation, largely the result of the deepening linkages with China.

It cut the assessment for Hong Kong banks to ‘a’ with a stable trend, from ‘a+’ negative.

The Hong Kong Monetary Authority has a strong record of curtailing the impact of loan delinquencies on its banks when home prices unexpectedly drop, while the regulator is unlikely to set limits or additional buffers explicitly for China-related risks in the near term, according to Fitch.

It is more challenging for the HKMA to maintain independent and prudent oversight of banks’ China expansion as it relies on coordination with the authorities on the mainland to ensure banks’ activities there are well-managed and well-capitalized, Fitch said.

Fitch’s operating environment assessments are different from its ratings, and take into account other factors such as the economic environment, how developed the financial market is, and the regulatory and legal framework.

U.S. expected to impose up to $60 billion in China tariffs by Friday

Asian Stock Markets

The Trump administration is expected to unveil up to $60 billion in new tariffs on Chinese imports by Friday, targeting technology, telecommunications and intellectual property, two officials briefed on the matter said Monday. 

One business source, who has discussed the issue with the administration, said that the China tariffs may be subject to a public comment period, which would delay their effective date and allow industry groups and companies to lodge objections. 

This would be considerably different from the quick implementation of the steel and aluminum tariffs, which are set to go into effect on March 23, just 15 days after President Donald Trump signed the proclamations. 

A delayed approach could allow time for negotiations with Beijing to try to resolve trade issues related to the administration’s “Section 301” probe into China’s intellectual property practices before tariffs take effect. 

The White House declined to comment Monday. China has vowed to take retaliatory measures in response. 

A source who had direct knowledge of the administration’s thinking told Reuters last week that the tariffs, authorized under the 1974 U.S. Trade Act, would be chiefly targeted at information technology, consumer electronics and telecoms and other products benefiting from U.S. intellectual property. 

But they could be much broader and hit consumer products such as clothing and footwear, with a list eventually running to 100 products, this person said. 

China runs a $375 billion trade surplus with the United States and when President Xi Jinping’s top economic adviser visited Washington recently, the administration pressed him to come up with a way of reducing that number. 

Expectations of the anti-China tariffs have alarmed dozens of U.S. business groups, who warned on Sunday they would raise prices for consumers, kill jobs and drive down financial markets.

China Imposes Record $870 Million Fine for Stock Manipulation

Asian Stock Markets

China’s securities regulator has slapped a record 5.5 billion yuan (US$870.6 million) fine on a company for manipulating stocks, the biggest single penalty in the country’s financial industry, in a move that underscores the government’s determination to impose discipline in the freewheeling capital market.

Xiamen Beibadao Group, the country’s largest private owner of cargo railcars, was penalised for being complicit in manipulating the stock prices of Zhangjiagang Rural Commercial Bank, Jiangyin Rural Commercial Bank, and Guangzhou Hoshion Aluminium, all of which are listed in Shenzhen.

Shares of the three companies fell after the penalty was announced. Zhangjiagang’s shares fell by as much as 4.6 per cent, while Jiangyin’s stock posted an intraday loss of 2.3 per cent and Hoshion’s dropped by as much as 1.9 per cent.

The fine on Beibadao is more than 70 per cent of the total penalties imposed last year by the China Securities Regulatory Commission (CSRC). Still, it is not the single largest punishment ever. That distinction went to the 11 billion yuan fine last year imposed by a court in Shandong province on hedge fund manager Xu Xiang, who was found guilty of manipulating stock prices during China’s market rout two years earlier. Xu had 930 million yuan of his illegal gains confiscated, and was imprisoned for 66 months.

Beibadao used borrowed money in more than 300 stock trading accounts to manipulate prices in the three companies, earning itself 945 million yuan in trading profits, according to the regulator’s statement.

Prices of the three stocks, which all more than doubled in February 2017 and reached record highs between March and April, have since plunged from their highs. Zhangjiagang has plunged 70 per cent from hits peak, while Jiangyin has fallen 69 per cent and Hoshion has plummeted 65 per cent from its high.

People involved in the case had refused to cooperate with investigators, and even resorted to physical altercations and attempts to destroy evidence, the regulator said. Beibadao officials could not be reached to comment.

The CSRC said it would step up its collaboration with other regulatory watchdog bodies, including the Chinese centra bank, the insurance and bank regulators, and Hong Kong’s Securities and Futures Commission. It will use big data analysis and cloud computing technology to track real-time trading accounts and activities that show suspicious patterns, the CSRC said.

In an attempt to strengthen enforcement efforts, China has merged the banking and insurance regulators to form the China Banking & Insurance Regulatory Commission, according to an announcement by the State Council earlier this week.

The CSRC has also toughened its scrutiny of companies seeking to raise funds through initial public offerings (IPOs), with approvals falling by 12 percentage points to 79 per cent of all applications last year. That’s the lowest since April 2014, just before the CSRC reopened the IPO pipeline following an 18-month hiatus. In the three years from 2014, approval ratings had averaged 91 per cent every year.

Xiamen Beibadao Group is a company engaging in a wide range of businesses, including logistics, investment consultancy, market information investigation,and sales of electronics, according to public information on the corporate registry system.

China to widen market access for foreign investors

Asian Stock Markets

China will sharply widen market access for foreign investors this year, with a focus on lowering investment barriers for the service sector and relaxing ownership limits in certain sectors, the state planner said on Tuesday.

The remarks, which echoed what a senior party official pledged in January in Davos, come as a reassurance for international investors who are eager to expand in China’s multi-trillion-dollar financial sector but have long been frustrated by regulations and the slow pace of market reforms.

 

U.S. and European business groups have urged China to grant more access and to level the playing field for their companies against domestic firms across a range of industries. 

Beijing has said it would raise the limit on foreign ownership in joint-venture firms involved in the futures, securities and funds markets, but it was unclear when the rules would be effective. 

China will strictly protect the intellectual property rights of foreign firms and ensure that domestic and foreign firms compete on an equal footing, said Ning Jizhe, vice head of the National Development and Reform Commission and head of the statistics bureau. 

The world’s second-largest economy is facing relatively large external pressure in attracting foreign direct investments (FDI) this year due to uncertainties in the global investment environment, according to the commerce ministry. 

FDI into China in January only rose 0.3 percent from a year earlier after declining 9.2 percent the previous month. 

China will achieve its economic growth targets this year through effort, said state planner head He Lifeng, adding that he expects exports and imports to maintain steady growth this year.

China will contest any 'unfair' U.S. trade measures on steel: think-tank

Asian Stock Markets

China will oppose any “unfair and unreasonable” trade measures by countries such as the United States against its steel companies, a Chinese government think-tank said on Tuesday, arguing protectionism will “poison” the industry. 

The Institute, which provides consultancy services to Chinese government policymakers and steel enterprises, was responding to recent efforts by U.S. steel firms urging President Donald Trump to curb surging imports they say are undermining the U.S. industry.

Trump will meet with a bipartisan group of lawmakers later on Tuesday to discuss trade matters. The meeting comes a month after the Commerce Department handed him the results of its investigation into steel and aluminum imports, giving him 90 days to respond.

The Commerce Department has offered no insight into its conclusions, although the probe could lead to broad tariffs or import quotas.

Trump is considering action on both steel and aluminum under the rarely used ‘Section 232’ of a 1962 U.S. trade law, which allows for restrictions to protect national security.

The Chinese think-tank said it its email that, “Trade protection will poison the healthy development of steel industry. Only open and cooperation can expand the common benefit.”

The United States is the world’s biggest steel importer, buying nearly 40 percent of shipments from Canada, Brazil and South Korea.

But China was not among the top 10 sources of U.S. steel imports in January-September 2017, based on U.S. Commerce Department data.

Exports from China, the world’s top steel producer, to the U.S. reached 1.18 million tonnes last year. 

That’s a fraction of the 800 million tonnes it makes each year, equal to about half of global output.

From a record high of 112.4 million tonnes in 2015, China’s total steel exports have fallen amid threats of a trade dispute and better demand at home. The exports dropped to 75.4 million tonnes last year.

May gets 9 billion pounds in China deals

European Stock Markets

British Prime Minister Theresa May left China on Friday with deals worth more than 9.3 billion pounds, at the end of a three-day trade mission where President Xi Jinping pledged to upgrade their “golden era” in relations. 

Britain is trying to reinvent itself as a global trading nation after a 2016 referendum decision to leave the European Union, and China, the world’s second-largest economy, is high on the list of countries that Britain wants to sign a free trade agreement with.

Speaking at a business summit in China’s commercial capital Shanghai, May said Britain was keen to help bring Xi’s vision for globalisation and a more open Chinese economy to life.

Chinese investment is helping Britain develop infrastructure and create jobs, with some 50,000 British businesses importing goods from China and more than 10,000 sell their goods to China, she added.

Britain’s financial services firms alone secured deals worth more than 1 billion pounds and market access, that would lead to 890 jobs, it said, without giving details.

China sees Britain as an important ally in its call for more open global markets, despite widespread concerns in the foreign business community about the difficulty of operating in China, and both countries refer to a “golden era” in relations.

Meeting in Beijing late on Thursday, Xi told May the two countries should “add new meaning into the bilateral ties so as to forge an enhanced version of the ‘Golden Era’,” according to state-run media.

China has also been appreciative of Britain’s enthusiasm for the China-backed Asian Infrastructure Investment Bank and Xi’s Belt and Road initiative to build a new Silk Road.

In a front page commentary on Friday, the overseas edition of the People’s Daily said Britain had shown “intelligence and pragmatism” in supporting Belt and Road.


But Brexit has unnerved Beijing, concerned about losing an important voice supporting free trade in the European Union and what it may mean for market access to Europe for Chinese firms which have invested in Britain.

Still, Chinese Premier Li Keqiang told May on Wednesday that China’s relations with Britain will remain unchanged through Brexit.

China coal futures hit record high as utilities warn of shortages

Asian Stock Markets

China’s thermal coal futures hit record highs on Monday after four top utilities warned of potential heating and electricity shortages and as the worst blizzards this winter continued to blast some central and southern provinces. 

Last week, China’s State Power Investment Corp (SPIC), China Datang Corp, China Huaneng Group and China Huadian Corp asked the government to boost supplies of coal and temper a months-long rally in prices.

The most-active futures were up 1.1 percent at 677.2 yuan ($107.04) per tonne at 10:41 a.m. (0241 GMT), after earlier touching 679.6 yuan, their highest since the contract began in 2015.
Thermal coal futures have jumped over 10 percent this year, extending a months-long rally, as utilities rush for supplies to deal with soaring power demand as cold weather sweeps across swathes of the nation.

Renewing worries about the country’s winter heating crisis, Jiangxi and Hunan provinces have introduced power rationing to industrial users due to heavy snowfall, with snowy storms also striking parts of the provinces of Anhui, Jiangsu, Zhejiang, Hubei and Hunan.

In Jiangsu, the authorities posted a letter dated Jan. 26 on their website asking utilities to ensure sufficient power for heating because of bad weather and snarled transportation.

The province has 7.46 million tonnes of coal inventory, enough for 13 days of demand, but seven utilities have less than seven days of stock, the notice warned.

Chinese utilities are under particular pressure this winter because of low natural gas supplies after Beijing ordered millions of households and some industrial plants in northern China to change to gas heating from coal as part of its war on pollution.

Strong China data cranks up pressure on bond markets

Strong Chinese data on Thursday kept world stocks hovering near record highs, as bond markets pushed U.S. Treasury yields - the benchmark for global borrowing costs - to a 10-month high.

 Underlining the momentum of the world economic expansion into the back end of last year, both Chinese fourth quarter growth of 6.8 percent and December industrial output growth of 6.2 percent were ahead of expectations.

Most Asian bourses were closing when the data landed but had briefly set a new an all-time record after the U.S. bluechip Dow Jones Industrial index had closed above 26,000 points for the first time.

China's yuan <CNY=CFXS > finished at its highest since December 2015. Europe's main FTSE, Dax and CAC40 stock markets then ticked higher though moves were choppy in the cross currents of rising euro EUR= and bond yields.

Exclusive: U.S. lawmakers urge AT&T to cut commercial ties with Huawei - sources

U.S. lawmakers are urging AT&T Inc, the No. 2 wireless carrier, to cut commercial ties to Chinese phone maker Huawei Technologies Co Ltd and oppose plans by telecom operator China Mobile Ltd to enter the U.S. market because of national security concerns, two congressional aides said. 

The warning comes after the administration of U.S. President Donald Trump took a harder line on policies initiated by his predecessor Barack Obama on issues ranging from Beijing’s role in restraining North Korea to Chinese efforts to acquire U.S. strategic industries.

Earlier this month, AT&T was forced to scrap a plan to offer its customers Huawei [HWT.UL] handsets after some members of Congress lobbied against the idea with federal regulators, sources told Reuters.

The U.S. government has also blocked a string of Chinese acquisitions over national security concerns, including Ant Financial’s proposed purchase of U.S. money transfer company MoneyGram International Inc.

The lawmakers are also advising U.S. firms that if they have ties to Huawei or China Mobile, it could hamper their ability to do business with the U.S. government, one aide said, requesting anonymity because they were not authorized to speak publicly.

Report on China slowing US bond purchases may be 'fake,' regulator says

Asian Stock Markets

A report that China is considering slowing or halting purchases of U.S. Treasury bonds may be based on erroneous information and could be "fake," the country's foreign exchange regulator said on Thursday.

 
Bloomberg News reported on Wednesday that Chinese officials reviewing the country's vast foreign exchange holdings had recommended slowing or halting purchases of U.S.

Treasury bonds amid a less attractive market for them and rising U.S.-China trade tensions. The report sent U.S. Treasury yields to 10-month highs and sent the dollar lower.

"The news could quote the wrong source of information, or may be fake news," the State Administration of Foreign Exchange (SAFE) said in a statement published on its website.

The U.S. 10-year Treasury yield edged down to 2.5366 percent from Wednesday's close of 2.549 percent, while the dollar gained 0.3 percent to 111.72 yen after the regulator's comment.

China has been diversifying its foreign currency reserves investments to help "safeguard the overall safety of foreign exchange assets and preserve and increase their value", the SAFE said.

The forex reserves investment in U.S. Treasury bonds is a market activity, with investment professionally managed according to market conditions and investment needs, it said.

The regulator added that forex reserves management agencies are responsible investors in
international financial markets.

The exact composition of China's reserves is a state secret and the subject of intense scrutiny by global investors.

According to data from the Treasury Department, the country is the biggest foreign holder of U.S. government debt, with $1.19 trillion in Treasuries as of October 2017.

China's foreign exchange reserves, the world's largest, rose $20.2 billion in December to $3.14 trillion, as tight regulations and a strong yuan continued to discourage capital outflows, data from China's central bank showed.

Dollar suffers big drop after report China may halt bond buys

Global Stock Markets

The U.S. dollar slumped on Wednesday after a report that China was ready to slow or halt its U.S. treasury purchases, with the greenback posting its biggest single-day drop against the Japanese yen in nearly eight months. 

Officials reviewing China’s foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries, Bloomberg News reported, citing people familiar with the matter.
The dollar had been on the back foot before the news report as the Bank of Japan’s move to trim its purchases of long-dated government bonds (JGB) earlier this week reverberated across currency markets.

The dollar’s biggest losses were against the Japanese yen, falling more than 1.2 percent to a six-week low of 111.3, its weakest since late November. Against a basket of currencies, the dollar fell 0.6 percent, its biggest drop in a month.

Wednesday’s decline against the yen followed Tuesday’s 0.5 percent fall when Japan’s central bank reduced the amount of its JGB purchases in its regular buying operations.

The dollar has had a torrid start to the year after weakening around 10 percent against a basket of major currencies last year as the economic outlook in other parts of the world, particularly Europe, improved, while expectations of a major boost to U.S. growth from domestic tax reforms fizzled.

The dollar’s weakness also underlines the greenback’s vulnerability to other central banks’ moves towards normalising monetary policy, a feature of 2017 that has continued to weigh on the dollar in the opening weeks of the year.

Two U.S. interest rate hikes this year are priced in but the market has only recently started to price in tightening moves by other central banks.

Traders cited the report on China’s appetite for U.S. bonds for a renewed rise in U.S. Treasury yields during European trade, with the U.S. 10-year bond yield rising to a new 10-month high at 2.593 percent.

BOJ FUELS TAPER TALK

The Bank of Japan’s move to trim JGB purchases in the previous session stoked speculation it would ease its massive monetary stimulus.

While the central bank’s move was only a slight tweak in policy and there was no further news on Wednesday, analysts put the extended sell-off down to traders betting that the bank could be poised to begin winding down its stimulus.

Moreover, market positioning on the Japanese yen has been extremely short as investors have ramped up its use as a funding currency in recent months to buy relatively higher yielding debt in the United States and elsewhere.

HSBC has three-year head start on foreign investment banking rivals in China - Gulliver

HSBC has a three-year head start on its foreign investment banking rivals in China because of the British bank’s unique position of having management control of its securities venture there, chief executive Stuart Gulliver said on Thursday. 

 

Gulliver’s comments come after Beijing, in a surprise move last month, announced it will allow foreigners to control their onshore operations. Currently non-Chinese groups are limited to 49 per cent stakes in joint ventures in the fast-growing market. 

HSBC’s 51 percent control of HSBC Qianhai Securities is unique because it was able to use its long-established Hong Kong unit to take advantage of a rule favoring banks based in the city. 

Many international banks are keen to launch new Chinese ventures with majority control or to boost their stakes in existing partnerships to help integrate those operations with their global networks and to better manage reputation risk, bankers have said.

But it will be some years before things fall into place for foreign majority-owned ventures to kick off, according to HSBC’s CEO.

China's financial sector opening raises prospect of talent war

In the last two years, more than 30 global asset managers have been awarded licences to set up wholly-owned units in China as they sought a share of the country’s $1.5 trillion (£1.12 trillion) private fund management market. 

Yet only about half a dozen of those asset managers - a group that includes the likes of Aberdeen Standard Investments, Invesco and Vanguard - have so far managed to come closer to getting their first funds off the ground. 

One of the biggest problems holding the others back is an acute shortage of qualified and experienced financial sector professionals in the world’s second-largest economy, said people familiar with the matter.

In the newly opened-up private fund management business for instance, China requires senior executives to undertake written tests conducted only in Mandarin, said lawyers advising foreign fund managers. 

Vanguard, which launched a wholly foreign-owned enterprise in Shanghai in May this year, said it was hiring more local talent and was confident of giving Chinese investors the “best chance for investment success with a highly experienced team”.

Oil prices edge up on strong China demand, signs of U.S. output slowdown

Oil prices inched up on Monday, supported by a slowdown in the growth of rigs looking for crude in the United States and because of strong refinery demand from China.

Brent crude futures were at $49.02 per barrel at 0656 GMT, up 11 cents, or 0.2 percent, from their last close. 

U.S. West Texas Intermediate (WTI) crude futures were at $46.64 per barrel, up 10 cents, or 0.2 percent. 

The slight rises extended strong gains from last week. The climbing prices were a result of strong demand as well as signs that relentless growth in U.S. oil production was slowing.

"The slowing pace of increases combined with massive drawdowns last week on both official crude inventory numbers from the U.S. probably explains the positive sentiment in general at the moment," said Jeffrey Halley of futures brokerage OANDA. 

U.S. drillers added two oil rigs in the week to July 14, bringing the total to 765, Baker Hughes said on Friday. 

While that is the highest level since April 2015, the rate of additions has slowed. New rigs over the past four weeks averaged five, the lowest since November 2016. 

Chinese refineries increased crude throughput in June to the second highest on record. 

Throughput last month hit 46.08 million tonnes, or 11.21 million barrels per day (bpd), a 2.3-percent rise from a year ago and up from May's 10.98 million bpd, data from the National Bureau of Statistics (NBS) showed on Monday.

Brent is at similar levels as its average price since 2015, Thomson Reuters Eikon data shows. Most price changes since 2015 have occurred in the first half, or towards the end, of a year. Overall, the second halves of every year since 2015 have seen relatively little price movement.

IMF warns U.S. fiscal uncertainty, China's credit growth pose risk to Asia

A lack of clarity about the size of an expected U.S. fiscal stimulus and China's rapid domestic credit growth are among risks that cloud Asia's economic outlook, a senior International Monetary Fund official said on Monday.

IMF Deputy Managing Director Mitsuhiro Furusawa noted a faster-than-expected sequence of interest rate hikes by the U.S. Federal Reserve could trigger a "significant" dollar rise that would increase the debt burden of Asian emerging economies with large dollar-denominated borrowings.

"Nonetheless, the near-term outlook is clouded with significant uncertainties and risks," such as a lack of clarity on U.S. economic policy including the size and composition of President Donald Trump's proposed fiscal stimulus.

"China's rebalancing process continues, but growth remains reliant on rapid domestic credit growth that could cause problems down the road," he said.

Furusawa called on Asian policymakers to adapt their fiscal policies to engage slowing population growth and rapid aging in the region.

Asia's population growth is projected to fall to zero by 2050, with the ratio of the elderly to working-age population reaching 2-1/2 times its current level, he said.

Asian policymakers could tackle such demographic challenges through reforms to curb health care and pension system costs, providing tax incentives to raise labor force participation, and compiling credible medium-term fiscal plans to ensure debt sustainability, he said.

Sanjeev Gupta, deputy director of the IMF's fiscal affairs department, delivered the prepared speech on behalf of Furusawa, who could not attend the seminar because his flight had been canceled.

Dollar down, gold gains on global risks; U.S. stocks inch up

Geopolitical tensions over North Korea pressured the dollar against the yen and lifted gold prices on Monday, while U.S. stocks edged higher after three straight days of losses.

North Korea made a failed missile test launch on Sunday, adding to regional tensions that have escalated over the past weeks as U.S. President Donald Trump has taken a tough rhetorical line with Pyongyang.

The dollar fell to a five-month low against the safe-haven yen, while the U.S. dollar index was down 0.4 percent. Gold gained 0.7 percent to hit a five-month high.

Most major European markets were closed for Easter Monday, while Wall Street reopened after being closed for the Good Friday holiday.

Worries over the upcoming French elections as well as softer U.S. economic data added to the bearish sentiment. Data on Friday showed U.S. retail sales fell for a second straight month in March and consumer prices dropped for the first time in just over a year.

Data showing China's economy grew faster than expected in the first quarter helped offset the soft U.S. figures.

World stocks as measured by the MSCI world equity index rose 0.3 percent.
U.S. stocks regained some ground after the recent global risks had weighed on the market last week.

The Dow Jones Industrial Average was up 67.03 points, or 0.33 percent, to 20,520.28, the S&P 500 gained 5.64 points, or 0.24 percent, to 2,334.59 and the Nasdaq Composite added 15.55 points, or 0.27 percent, to 5,820.70.

The long, rough ride ahead for 'Made in America'

Mini motorcycle and go-kart maker Monster Moto made a big bet on U.S. manufacturing by moving assembly to this Louisiana town in 2016 from China.

But it will be a long ride before it can stamp its products "Made in USA."

The loss of nearly one out four U.S. factories in the last two decades means parts for its bike frames and engines must be purchased in China, where the manufacturing supply chain moved years ago.

Monster Moto's experience is an example of the obstacles American companies face as they, along with President Donald Trump, try to rebuild American manufacturing. U.S. automakers and their suppliers, for example, have already invested billions in plants abroad and would face an expensive and time-consuming transition to buy thousands of American-made parts if President Trump’s proposed “border tax” on imported goods were to become law.

When companies reshore assembly to U.S. soil – in Monster Moto’s case that took two years to find a location and negotiate support from local and state officials – they are betting their demand will create a local supply chain that currently does not exist.

For now, finding U.S.-based suppliers "remains one of the top challenges across our supplier base," said Cindi Marsiglio, Wal-Mart Stores Inc’s (WMT.N) vice president for U.S. manufacturing and sourcing.

Wal-Mart partnered with Monster Moto and several other U.S. companies in a drive to increase spending on American-made goods by $250 billion by 2023 in response to consumer demand for American-made goods.

Their experience has shown Americans’ patriotic shopping habits have limits, namely when it comes to price.

Take Monster Moto's bikes, which sell for between $249 to $749. Keechle, the CEO, says he can’t raise those prices for fear his price sensitive prospective customers will turn to less expensive rivals made in China.