China is preparing for protracted trade war

Source – South China Morning Post

“Chinese President Xi Jinping has called for the nation to embark on a new Long March and ‘start all over again’, in the most dramatic sign to date that Beijing has given up hope of reaching a trade deal with the United States in the near term. ‘We are here at the starting point of the Long March to remember the time when the Red Army began its journey,’ Xi told cheering crowds on Monday…’We are now embarking on a new Long March, and we must start all over again.’ While Xi did not directly mention the trade war or the United States, his remarks are being perceived as clear signals that the Chinese public is being told to prepare for hardships because of the worsening external environment The economy is already slowing and the trade war could trim as much as 1 per cent from its gross domestic product, Wang Yang, of the elite Politburo Standing Committee of the Communist Party of China, said last week….The Long March was a military retreat between 1934 to 1936 undertaken by the Red Army, the forerunner of the People’s Liberation Army, to evade Kuomintang troops during the Chinese civil war. A long article by the official Xinhua News Agency on Monday claimed that ‘bullying by the US side’ was the cause of the failed trade talks….China warned last Friday that there was no point in holding more talks if the US was not ‘sincere’ in wanting to achieve a fair outcome. ‘The message is clear: China is ready to fight a protracted trade war,’ said one source.”

 

Four in 10 Americans Embrace Some Form of Socialism

Source: Gallup

“Americans today are more closely divided than they were earlier in the last century when asked whether some form of socialism would be a good or bad thing for the country. While 51% of U.S. adults say socialism would be a bad thing for the country, 43% believe it would be a good thing. Those results contrast with a 1942 Roper/Fortune survey that found 40% describing socialism as a bad thing, 25% a good thing and 34% not having an opinion….A majority of Democrats have said they view socialism positively in Gallup polling since 2010, including 57% in the most recent measure in 2018….In the same April survey, Gallup asked Americans whether they would prefer mostly free market or government control over several economic and societal activities. Americans are most likely to prefer free market control in the areas of technological innovation and the distribution of wealth. Majorities also want the free market to drive the economy overall, wages, higher education and healthcare. Notably, more Americans favor free market than government control over healthcare and higher education…But at least four in 10 Americans appear sympathetic to policies that would increase the government’s role in those areas.”

 

“Sea Of Red”: S&P Futures, Bond Yields Tumble As All Out Trade War Becomes “Base Case” -Zero Hedge

“Yesterday’s modest selloff has become an all-out rout, dragging world stocks lower for 4 of the past 5 days, with US equity futures tumbling and global markets a ‘sea of red’ as fears grow that the China-U.S. trade conflict is fast turning into a ‘technology cold war’ and as Wall Street’s denial is finally shifting to acceptance that a lengthy, all-out trade war is now inevitable, and the only way out and for someone to concede is for markets to plunge. Sure enough, that’s what they are doing this morning. ‘It’s tin hats on and battening down the hatches for a fair bit of volatility for the next few months,’ said Tony Cousins, Chief Executive of Pyrford International, the global equities arm of BMO Global Asset Management. ‘We are as defensively positioned as we could be,’ he said, adding it was impossible to predict what steps Trump was likely to take next in the trade war with China. Analysts at Nomura warned in a note that ‘without a clear way forward during an intensifying 2020 U.S. presidential election, we see a rising risk that tariffs will remain in effect through end 2020.’….Goldman Sachs, Nomura and JPMorgan Chase ‘are among those that have rewritten their forecasts as U.S. President Donald Trump threatens to impose a 25% tariffs on around $300 billion of additional Chinese imports.'”

 

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