Remember, as Larry Kudlow said that President XI promised to “fulfill the obligations of China” in the first phase, trade agreements, and this is the worst outbreak of the coronavirus and that the negotiations on the second phase of trade agreements postponed due to the outbreak of a pandemic?
not surprisingly, Monday’s edition of the SCMP has confirmed that this will not happen. Rather, China needs to delay the implementation of commitments for the acquisition of additional U.S. goods and services by $200 billion, even if Beijing will cancel restrictions on the import of American agricultural products, such as poultry and soy. Two weeks ago, rumors that China will strive to maintain a “flexible attitude” were early signs that the regime is analyzing future actions.
Now one of the economists urged Beijing to mention “force majeure”.
fortunately for Beijing, the two sides involved in the transaction, paragraph “force majeure”: “In case a natural disaster or other unforeseen event beyond the control of the parties, will delay the timely performance of party of its obligations under this agreement, the parties shall consult with each other”.
But few expect that the U.S. will take this delay without negotiation: Xu qi yuan, researcher of China Finance 40 Forum, believes that China must ask to postpone the implementation of the purchase Plan immediately.
According to the SCMP, Xu comments about the lack of quota transactions become part of the consensus views of economists on international trade that due to the outbreak of coronavirus implementation of quotas became impossible.
a week after the country had to return to the former course, a large part of the economy of China is. Even newly opened factories work far not on the same capacity. A survey conducted by the American chamber of Commerce in Shanghai showed that almost 80% of us factories in China are unable to run at full capacity production Liresearch Institute.
In January, the media said that China has agreed to expand purchases of industrial goods by $80 billion, including purchases of automobiles, spare parts, aircraft, agricultural equipment, medical devices and semiconductors.
Regardless, when does this “violation of agreement” for the United States and China, some point out that the deal has never been so realistic. One economist Rabobank recently noted that Beijing achieved its goal by the end of 2021, the graph of US exports to China should look like the following in the next 2 years is simply impossible.
of Course, any skepticism about trade deals should be anathema to growth stocks, which persisted until now, despite the fact that the coronavirus has affected more than 70 thousand people.