China says market will dictate imports from US

Business | Agencies 20 Jan 2020

China will negotiate with American companies and increase imports of US goods and products according to market principles, an official with its state planner said yesterday.

The United States has high quality supply in the fields of energy, manufactured goods, agricultural products, medical care and financial services, said Meng Wei, spokesperson for China's National Development and Reform Commission, at a press conference yesterday.

China will boost purchases of US goods and services by US$200 billion (HK$1.56 trillion) over two years in exchange for the rolling back of some tariffs under an initial trade deal between the world's two largest economies. Chinese Vice Premier Liu He, who signed the trade deal with US President Donald Trump last week, said the deal would not affect "third parties' interests", apparently in reference to deals made with other suppliers of farm goods.

Chinese companies will import US agricultural goods according to consumers' need, and demand and supply in the market, Liu told reporters, according to CCTV.

Meanwhile, China's central bank injected 200 billion yuan (HK$226.47 billion) into the market through 14-day reverse repos at an interest rate of 2.65 percent yesterday.

The move aimed at maintaining liquidity in the banking system at a reasonably sufficient level before the Spring Festival, according to a statement on the website of the People's Bank of China.

A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

In addition, China's state planner said that it had approved 157 fixed-asset investment projects in 2019, worth a total 1.33 trillion yuan. National Development and Reform Commission spokeswoman Meng Wei told a news conference that China's economy has the foundations to continue to operate stably in 2020.

Separately, Chinese manufacturers offered the biggest support to the country's economic stabilization in the last three months of 2019, thanks to easing trade tensions and improving global demand.

Output in industrial enterprises rose 5.9 percent from the same period in 2018, the National Bureau of Statistics said on Saturday, bouncing back from an almost decade-low of 5 percent in the prior quarter. Manufacturers, accounting for more than 85 percent of total industrial output, grew 5.9 percent in the quarter, from 4.8 percent previously, recording the biggest increase since data was available.

The data adds to evidence that Chinese factories - struggling with higher tariffs, deflationary prices, and maturing debt - saw demand improve toward the end of 2019, boosted by a turnaround in the global outlook.

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