The US started a seven-day public hearing on the additional $300bn China tariffs this Monday. US retailers, manufacturers and other businesses are providing testimonies to the US Trade Representative’s Office (USTR), according to an official statement.
Trump and Xi had a phone call on Tuesday, following which Trump tweeted that the conversation was “very good” and confirmed that the two leaders will hold an “extended meeting” at the G20 summit on June 28-29 in Osaka.
“Our respective teams will begin talks prior to our meeting,” he added.
USTR’s Robert Lighthizer said on Wednesday before the US House of Representatives that he would be speaking to his counterpart in China about the trade war before the G20 meeting.
That wasn’t all. Chinese state media outlet CCTV also did its bit to support positive talks between the Mainland and the US.
Since late May, when trade tensions had escalated, CCTV channel 6 had been showing a film about the Chinese army fighting the US in the Korean War. But on Wednesday morning, it replaced it with “Lover's Grief over the Yellow River”, a story about how a US pilot falls in love with a guerrilla while helping the Chinese fight the Japanese in World War II.
Chinese state-owned media, Xinhua, also published a statement regarding the upcoming meeting between the two leaders. According to Xinhua, the two spoke on the phone at Trump’s request and Xi is “willing to hold a meeting at the G20 meeting at Osaka and exchange views on fundamental issues regarding the development of China-US relations”.
Ken Cheung Kin Tai, a senior Asian FX strategist at Mizuho Bank, wrote in a Wednesday note: “We believe that the risk of RMB breaking above 7 handle before G20 Summit had receded given the Xi-Trump meeting and the PBoC will likely intend to anchor RMB at around 6.9 level to facilitate Xi-Trump at the G20 Summit,”
Separately on Thursday, Xi kicked off a state visit to the Democratic People’s Republic of Korea. The visit is the first to North Korea by a Chinese leader in 14 years.
ICBC CICC USD Money Market ETF was listed on the main board of HKEX on Tuesday, the first active ETF in Hong Kong.
Industrial and Commercial Bank of China (ICBC) Asset Management (Global), the overseas asset management arm of the ICBC Group, has been appointed as investment adviser of the ETF.
The ETF will invest in short-term deposits and high-quality money market instruments.
Local government debt reached a new high of Rmb19.9tr ($2.9tr) in May, according to data published by the Ministry of Finance on Monday.
In May, local governments issued Rmb304.3bn of bonds. Among these, bonds for general purpose reached Rmb146.4bn and those for special purposes were worth Rmb157.9bn. In the first five months, local governments have issued a total of Rmb1.94tr in bonds.
According to a monthly report issued by the People’s Bank of China (PBoC) on Monday, new bonds issuance reached Rmb3.6tr in May.
The interbank bond market saw total trading of Rmb18.6tr in the month, with an average daily volume (ADV) of Rmb883.7bn, a 67.45% increase year-on-year. The exchange bond market saw a total monthly volume of Rmb701.2bn, and an ADV of Rmb35.1bn, a 59.34% increase.
Bank of China published its monthly Credits Investment and Financing Environment Difference Index (Cifed) on Monday.
After the index returned to the positive range in April, indicating that offshore renminbi bond yields are lower than onshore ones, it continued the rising trend.
The general Cifed index stood at 14.8 in May, a 7.7 point increase from April.
Banks bought Rmb1.08tr and sold Rmb1.04tr on the Chinese foreign exchange market in May, according to data published by the State Administration of Foreign Exchange (Safe) on Thursday. Banks bought Rmb1.01tr and sold Rmb981.7bn for their clients. They bought Rmb70.2bn and sold Rmb59.5bn between themselves.
FX reserves in May reached $3.1tr, a $6.1bn increase from April.