中国宏观追踪：新的脆弱平衡

ChinaMacroTracker A new tenuous equilibrium ◆US-China trade talk success gives breathing room to focus ondomestic policieswhile supporting ongoing opening up Erin XinEconomist, Greater ChinaThe Hongkong and Shanghai Banking Corporation Limitederin.y.xin@hsbc.com.hk ◆Opening up policies emphasiseinstitutional reforms, green Taylor WangEconomist, ChinaThe Hongkong and Shanghai Banking Corporation Limitedtaylor.t.l.wang@hsbc.com.hk+852 2288 8650 ◆Proactive fiscal policy willtakethe lead during the 15thFYP China-US trade relations:A framework formore than justreciprocaltariff cuts Jing LiuChief Economist, Greater ChinaThe Hongkong and Shanghai Banking Corporation Limitedjing.econ.liu@hsbc.com.hk+852 3941 0063 The successfulsummit between President Xi and President Trump in South Koreacame through with tangible results: cuts tofentanyl-related tariffs on China from 20%to 10%, delaysimplementing theUSBIS 50% ownership ruleandChina’srare earthexport controlsby one year, extension of the reciprocaltarifftruce by one year,port Heidi LiAssociateGuangzhou Since the initial statements on 30 October, more details have emerged. On fentanyl-related tariffs, US President Trump noted the US could remove all of thefentanyl-related tariffs on China (eg,the remaining 10%) if China continues to crackdown on drug exports (Bloomberg, 2 November). This could mean a further narrowing (if not full erosion)of‘tariff advantages’ enjoyed byothercountries over Delays in imposing export controls have alreadystarted to take effectand can help toaddresssupply chain disruption.China’s Ministry of Commercenoted that ithadannounced “exemptions for eligible exports andwill ensure the delivery ofsupplies Recently added port fees will be paused,starting 10 November,for one year. On soybeanpurchases,the White House statementgave the specific quantitiesexpected to be purchased by China:at least 12 million metric tons (MMT)inthe last twomonths of this year, andat least 25MMTper year for thenext three years(1 November). Ultimately, the one-year framework for the trade deal gives more stability and canhelp to improve business confidence,while at the same time providing more space Opening up:Multiple channels to promote ongoing international exchanges Chinahas rolledoutsomemeasures to widen its high-level opening-up, focusing on Issuer of report:The Hongkong and ShanghaiBanking Corporation Limited Disclosures & Disclaimer This report must be read with the disclosures and the analyst certifications inthe Disclosureappendix, and with the Disclaimer, which forms part of it. View HSBC Global Investment Research at:https://www.research.hsbc.com On institutional opening-up, Premier Li Qiang stressed at a State Council meeting the need tooptimise market access, align with high-standard international trade rules,and leverage thestrengths of pilot free trade zones(Xinhua, 31 October). The Minister of Commerce signalledfurther openingupin sectors including value-added telecoms, biotechnology, and wholly Green trade gainedmomentum, as exports of“new three”products(electric vehicles, lithium-ionbatteries and solar) rose19.1%y-o-yin the first three quarters.China has rolled out a dedicatedgreen trade policy to help businesses build green capabilities and expand related trade, supporting bothindustrialupgrading and carbon neutrality goals.ChinaandASEANsigned an Meanwhile,China continues to strengthen bilateral and multilateral engagement. At the APECleaders’ meeting,PresidentXi called for digital empowerment, greentransitionand inclusivegrowth in the Asia-Pacific region(Gov.cn, 31October).Amid externaluncertainties,strengthening cooperation can not only ensure the stability of China's external economic cycleand industrial chain, but also contribute to technology spilloverandregional development.This Fiscal:Fiscal policy will take the lead to meet the 15th FYP goals Fiscal policy willtake the lead to meet the 15thFYP goals. According to an article by Minister ofFinance Lan Fo'an, proactive fiscalpolicywill focus on expanding domestic demand, supportingtech self-reliance, improving public welfare, promoting integrated urban-rural development,deepening fiscal reforms, and defusing local government debt risks(SCTN, 31 October). Toboost domestic demand, the ministry willcontinue to raise household incomes and stimulate Hong Kong: Global Financial Leaders’InvestmentSummitemphasized new opportunities Financial policy leaders from Hong Kong and mainland China as well as leaders ofglobalfinancialcompanies gathered for the annual Global Financial Leader’s Summit in Hong Kong(3-5 November).The themes touched on the opportunities for financial development acrosswealth access, cross-boundary connectivity, and fintech development. Hong Kong policymakersstressed the ongoing connectivity between Hong Kong and mainland China as well as in Economic activity Note: Semi-steel tyres are key components for the production of automobiles.Source: Wind, HSBC