David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Trump Stirs Alarm That He May Be Giving China a New Trade Weapon

    This article by Shawn Donnan and Jenny Leonard for Bloomberg may be of interest to subscribers. Here is a section: 

    Details of the U.S. commitments and how the enforcement mechanism will operate remain scant. But Mnuchin’s comments have caused plenty of raised eyebrows from legal scholars to the business community and Congress.

    If the U.S. allows China reciprocal enforcement powers, it would make China “judge, jury and executioner as to whether we have honored our obligations,’’ said Daniel Price, who served as a senior economic adviser to President George W. Bush and is now at Rock Creek Global Advisors in Washington. “I don’t think the U.S. business community is sufficiently alert to the risk of constantly being exposed to unilateral enforcement action by China.”

    Details of the U.S. commitments and how the enforcement mechanism will operate remain scant. But Mnuchin’s comments have caused plenty of raised eyebrows from legal scholars to the business community and Congress.

    If the U.S. allows China reciprocal enforcement powers, it would make China “judge, jury and executioner as to whether we have honored our obligations,’’ said Daniel Price, who served as a senior economic adviser to President George W. Bush and is now at Rock Creek Global Advisors in Washington. “I don’t think the U.S. business community is sufficiently alert to the risk of constantly being exposed to unilateral enforcement action by China.”
     

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    Brazil Digital Report

    Thanks to a subscriber for this slide deck from Gartner which may be of interest.  Here is a section: 

    The Brazilian economy has reached a tipping point ▪ GDP growth has returned ▪ Consumer and industry confidence are high ▪ Inflation and interest rates are at all-decade lows ▪ Country risk is on the decline ▪ Capital markets are active as ever… ▪ …and BOVESPA is at its highest point to date.

    But to expand growth and make other advances, the country will need to close gaps with developed and emerging economies: ▪ Productivity has grown very little over the last decade ▪ The demographic and workforce boom is over, meaning that productivity gains will be needed to drive growth ▪ We lack innovation, patents, and a skilled workforce… ▪ … and we have not seen any sign of homegrown tech or innovation giants among our top-performing companies.

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    On Target

    Thanks to Martin Spring for this edition of his ever-interesting letter. Here is a section on the coal market which I found particularly illuminating: 

    While climate-change activists make a lot of fuss about the US, where emission of greenhouse gases has been in decline, they aren’t demonstrating loudly about China -- which attacks developed countries for not doing enough, while itself doing most to worsen it,

    The New York Times reports that China, the world’s leading emitter of greenhouse gases from coal, now admits it’s burning up to 17 per cent more coal than its government previously claimed when it signed up for the Paris accord.

    And it’s making things worse. Across China the government is building a fleet of new coal-fired stations with 259 gigawatts of capacity, while outside the country it’s financing even more new coal plants, providing $36 billion for 399 gigawatts.

    “Chinese bankers and project planners like coal-backed projects because they are cheap,” says the energy consultancy IEEFA. “While they are restricted by Chinese pollution and emissions targets at home, they are free to fund coal-backed projects abroad.”

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