China's exports and imports grew more slowly than expected in July, raising concerns over whether global demand is starting to cool even as major western central banks consider scaling back their massive stimulus programmes.
China and Europe have been driving an increasing share of global growth this year as political conflict stymies stimulus policies being pushed by the US president Donald Trump.
But China's export growth slowed to 7.2 per cent in July from a year earlier, the weakest pace since February and cooling from an 11.3 per cent rise in June, official data showed on Tuesday. Analysts had expected a 10.9 per cent gain.
Imports rose 11 per cent, the slowest growth since December and down from a 17.2 per cent rise in the previous month. That also missed expectations of 16.6 per cent growth.
That left the country with a trade surplus of US$46.74 billion for the month, the highest since January, compared with forecasts for $46.08bn and above June's $42.77bn. The July trade figures are preliminary, with revised data due on July 23.
Asian stock markets went flat after the disappointing China data, which came a day after ratings agency Fitch upgraded its outlook for the world economy for this year and next, citing recoveries in China and other emerging markets.
"Despite an uptick at the end of the second quarter, [China's] trade growth now appears to be on a downward trend. In particular, the sharp decline in import growth since the start of the year suggests that domestic demand is softening," Capital Economics said in a note.
Improving global demand has boosted exports for China and other trade-reliant Asian economies in recent months after several lean years of declining shipments, but investors have been more focused on its strong appetite for imports, particularly for industrial commodities such as iron ore and coal, which have sparked a global price rally.
China's trade surplus with the United States, its largest export market, rose 5.9 per cent in the first seven months of this year to $142.75bn compared to the year-ago period, even as China's overall trade surplus has declined this year.
China's surplus with the US was $25.2bn in July, nearly unchanged from June's $25.4bn, which was the highest since October 2015.
Mr Trump is close to a decision on how to respond to what he considers China's unfair trade practices, as Washington prepares to launch an inquiry into Beijing's intellectual property and trade practices.
But America's appetite for Chinese goods appears to have only increased over the years.
The surplus with the US accounted for over 60 per cent of China's total surplus in the first half, compared to just 44 per cent in the year-ago period, according to China customs data.
China has said that trade between China and the US benefits both sides and that Beijing is willing to work with Washington to improve their trade relationship.
The US and China failed last month to agree on major new steps to reduce the US trade deficit with China, casting doubt over Mr Trump's economic and security relations with Beijing.
Tensions between Washington and Beijing have escalated in recent months as Mr Trump has pressed China to cut steel production to ease global oversupply and rein in North Korea's missile programme.
He tweeted in late July after the latest North Korea missile test that he was "very disappointed" in China, saying that Beijing profits from US trade but had done "nothing" for the United States with regards to North Korea, something he would not allow to continue.
A China's vice commerce minister said last week that China's foreign trade faces a mostly positive environment in the second half of the year, but instability and uncertainties still exist.
* Reuters
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Engine: 1.5-litre, four-cylinder turbo
Transmission: seven-speed dual clutch automatic
Power: 169bhp
Torque: 250Nm
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The biog
Favourite hobby: taking his rescue dog, Sally, for long walks.
Favourite book: anything by Stephen King, although he said the films rarely match the quality of the books
Favourite film: The Shawshank Redemption stands out as his favourite movie, a classic King novella
Favourite music: “I have a wide and varied music taste, so it would be unfair to pick a single song from blues to rock as a favourite"
The specs
Engine: 3.8-litre, twin-turbo V8
Transmission: seven-speed automatic
Power: 592bhp
Torque: 620Nm
Price: Dh980,000
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Pakistan v New Zealand Test series
Pakistan: Sarfraz (c), Hafeez, Imam, Azhar, Sohail, Shafiq, Azam, Saad, Yasir, Asif, Abbas, Hassan, Afridi, Ashraf, Hamza
New Zealand: Williamson (c), Blundell, Boult, De Grandhomme, Henry, Latham, Nicholls, Ajaz, Raval, Sodhi, Somerville, Southee, Taylor, Wagner
Umpires: Bruce Oxerford (AUS) and Ian Gould (ENG); TV umpire: Paul Reiffel (AUS); Match referee: David Boon (AUS)
Tickets and schedule: Entry is free for all spectators. Gates open at 9am. Play commences at 10am
Mia Man’s tips for fermentation
- Start with a simple recipe such as yogurt or sauerkraut
- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.
- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.
- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.
What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
- Grade 4 = grade C
- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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THE%20SPECS
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THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
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Monster
Directed by: Anthony Mandler
Starring: Kelvin Harrison Jr., John David Washington
3/5