A$ ignoring Australia China trade tension?

Throughout 2019, US China trade tension dragged on financial markets as we saw wave after wave of tariffs placed on US imports from China. However, with the Phase 1 US Economic and Trade Agreement between the US and China that came into effect on Feb 14 this year, markets have largely ignored heightened tension.

As long as the phase 1 agreement remains in place, the economic implications will be limited. That’s the view has helped the MSCI world equity index recover to fresh 2 month highs this week to be unchanged versus a year ago.

That’s despite the White House releasing a report this week asserting that the “Chinese Communist Party’s expanding use of economic, political, and military power to compel acquiescence from nation states harms vital American interests.”

With China preparing to impose national security legislation on Hong Kong, tension between Beijing and Washington is surely set to rise further.
Eyes should therefore be carefully trained on the upcoming National People’s Congress which convenes today in Beijing. This live event, with 3,000 delegates physically attending, will set the scene for the economic and political agenda through 2020 and into 2021.

Here in Australia, it also feels as if relations have soured with China. In the last week or so, China announced 80% tariffs on Australian barley imports, alleging dumping. This followed a partial ban on Australian beef imports and of course the Chinese ambassador to Australia’s threats to a range of Australian exports.

Видео A$ ignoring Australia China trade tension? канала Westpac Banking