XI-Trump summit pushed out to April at the earliest
Trump said yesterday that 'we are doing very well with China talks', as reported by Adam. We all know by now that President Trump is always on his best twitter behaviour when it comes to talking about a deal with China. The last thing he wants is a hit to the S&P 500 prompted by a combative tweet against China. However, the tension is clearly there and while both sides 'want a deal', the reality is that the specifics and enforcement mechanisms are inadequate to get a deal over the line.
Prior to this data Premier Ki Keqiang had announced that China would target growth of 6 to 6.5% in 2019, below last year's figures of 6.6% which was already a 20+ year low. China's growth is slowing , the US China trade war is adding to a slowdown across Asia, in Europe and the danger is that US and China dispute slowly choke sthe global economy through the prolonged uncertainty.
Lessons from declining UK business investment
In a way this has been seen in Brexit negotiations, as investment is projected to fall for the UK in the coming years, by Bank of England's Haskel. Now, this is even in a situation where Brexit is resolved. Ok, no-one has a crystal ball, but total UK business investment has been falling steadily all last year. See here for Carney's report that decline in business investment in the UK is 'huge'.The concern here is that the longer the US-China talks go on, the greater the impact on business uncertainty and there will be an inevitable slowdown in global growth. The latest is that a Trump and Xi meeting will happen in April at the earliest. Watch this space.