On February 6, 2020, the State Council Customs and Tariff Commission announced that starting on February 14, 2020, the Chinese government will halve the retaliatory tariffs that it put in place on September 1. Tariffs originally at 10 percent will be reduced to 5 percent, and those at 5 percent will be brought down to 2.5 percent. This is commensurate with the US reduction of its September 1 tariffs on about $120 billion in Chinese goods from 15 to 7.5 percent as part of the Phase One trade...
China Market Intelligence
The US government is mounting a whole-of-government approach to address national security concerns associated with ICT supply chain security vis-à-vis China. Actions taken by the executive, legislative, and judicial branches are both inward- and outward-looking. These approaches would have implications for the ability of US companies to continue engaging with certain Chinese customers.
The current novel coronavirus outbreak poses several challenges for companies in affected areas and their employees. Lessons learned during the 2003 SARS outbreak can inform some commercial best practices. Companies that have contingency plans for closures and quarantines will have a head start coordinating next steps.
The system is still far from comprehensive implementation, with several bureaucratic challenges remaining. It is still too early to estimate a measurable impact on companies. The biggest risk for companies to-date is inaccurate data captured in the various social credit databases. Companies should monitor their records vigilantly in sector-specific databases.
The spread of the novel coronavirus originating from Wuhan, China has continued to accelerate during the Spring Festival holiday creating a public health emergency and causing operational challenges and uncertainty for companies operating in affected areas.
Nearly three years after the Cybersecurity Law went into effect, regulatory clarity remains elusive, including around the MLPS 2.0. Most companies are taking a wait-and-see approach until key concepts are defined in more detail.
The agreement includes considerable positive developments on issues concerning financial services, agriculture, and intellectual property. China has committed to purchase $200 billion of US goods above 2017 levels. The agreement contains a dispute resolution mechanism that aims to ensure faithful implementation.
These openings will occur in China’s asset management, insurance, banking, credit rating, and futures industries. Financial liberalization will come in the form of not only expected approval of pending licenses but also acceleration of implementation of structural reforms and relaxation of regulatory requirements that are in line with China’s domestic interests.
The US-China Business Council congratulates US and Chinese negotiators for the signing of a Phase One trade agreement earlier this morning. The full text is available here. We are hopeful that Phase One will serve as a stable foundation for building a stronger, more prosperous US-China relationship. Our initial analysis of the most impactful commitments for our member companies is below. USCBC is also soliciting comments from members on what you would like to see addressed in “phase two”...
Humming along between 6 to 6.5 percent, China’s 2019 gross domestic product (GDP) growth numbers remain a driver of global economic growth. Political priorities are likely to maintain that peppy pace through 2020, but lingering structural challenges, ballooning debt, and uncertainties brought by an increasingly antagonistic bilateral trade conflict will require more proactive Chinese fiscal and monetary policies to prevent excessive economic deceleration.