Hi-Tech

As trade spat grows, China hits United States sorghum imports with hefty deposit

April 18, 2018 12:17·
March retail sales rose 10.1% from a year earlier the strongest pace in four months with consumers buying more of almost everything from cosmetics and clothing to furniture and home appliances

March retail sales rose 10.1% from a year earlier the strongest pace in four months with consumers buying more of almost everything from cosmetics and clothing to furniture and home appliances

At the moment, overseas carmakers that want into the Chinese market have to either import their wares or form 50-50 joint ventures with local, state-owned partners.

Japan could buy some sorghum that had been destined for China, said Ken Morrison, a United States trader who worked for Cargill and now publishes a commodity newsletter.

"China's economy entered 2018 with solid growth momentum", Louis Kuijs of Oxford Economics said in a report.

It's also an ingredient in a popular Chinese liquor.

"National Sorghum Producers, alongside our producers, stakeholders and partners, has cooperated fully with China's antidumping and countervailing duty investigations, including submitting several thousand pages of data demonstrating conclusively that US sorghum is neither dumped nor causing any injury to China".

"The biggest [difficulty facing China's economy] is uncertainty in the global environment", he said. Its ties with the world's largest economy, though, are becoming increasingly fraught.

"Even in the worst scenario that both countries start to implement the $50 billion tariffs, we're talking about a few tenths of a percentage point and most likely it will only start to affect the economy late this year and in 2019". This matches the growth rate of Q4 2017 and falls just shy of 2017 as a whole, which recorded annual growth of 6.9%, though interestingly exceeds the Chinese government's target for the year of 6.5%.

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Analysts polled by Reuters had predicted industrial output growth would cool to 6.2 per cent from 7.2 per cent in the first two months of the year. BYD Auto manufactures under its own brand and also has a joint venture, Denza, with Daimler's Mercedes unit.

In the first quarter, the country's GDP expanded by 1.4%. First quarter infrastructure investment rose 13 per cent on year, but eased slightly from January-February.

However, it may prove hard to accurately assess the value of the Chinese OEMs, and foreign auto companies would have to buy them out to effectuate the separation - a price tag many may not be able to afford, Janet Lewis, managing director of equity research at Macquarie Capital Research, told WSJ. Fears of a China-US trade war have been simmering in recent weeks, with Washington and Beijing exchanging threats of tit-for-tat levies on hundred of billions of dollars worth of goods.

More than 100 cities have introduced some measures to cool home prices.

Nomura sees these weaker-than-expected figures as signs of potential weakness for the rest of the year as deleveraging continues to weigh down on investment, alongside "structural reforms which bring short-term pain, and rising trade protectionism". Sales of sedans, SUVs and minivans previous year totaled 24.8 million units.

USA exports of sorghum increased from 317,000 tons in 2013 to 4.76 million tons in 2017, according to Beijing's data.

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