On Monday, US treasury secretary Steven Mnuchin told reporters that “we expect to have another principal-level call [with China] this week, and to the extent we make significant progress, I think there’s a good chance we’ll go there later.”
The comment suggested that the phone call might be a “pivotal event” for the US-China relationship outlook, according to Craig Chan, global head of FX strategy at Nomura.
Separately on the same day, Trump tweeted about China’s June activity data and linked it to the trade war, triggering a back-and-forth between the two countries.
“China’s 2nd Quarter growth is the lowest it has been in more than 27 years. The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving. This is why China wants to make a deal with the US and wishes it had not broken the original deal in the first place,” he wrote.
Geng Shuang, a spokesperson at the Ministry of Foreign Affairs, responded in a Tuesday press conference. “As for US’ comment that China is desperate for a deal because of its slowing economy, this is completely a misleading comment. Reaching a deal is of course not a one-sided wish from China. The US also has this need.”
In turn, at a cabinet meeting on Tuesday, Trump said that “we have a long way to go as far as tariffs where China is concerned...”
That wasn’t the end of it. China’s Geng Shuang responded to Trump’s comment in a Wednesday press conference. “If the US does impose new tariffs, that’s no different from setting new obstacles for the trade talks, and it will only create a long way to go before reaching a deal,” he said.
On Wednesday, Mnuchin told CNBC reporters that he and Robert Lighthizer, trade representative, had a call scheduled on Thursday US time with their Chinese counterparts.
China is speeding up the process of implementing a social credit system for businesses, public organisations and state-owned enterprises (SOEs).
The state council released a set of policies on Tuesday to provide guidance on using social credits to regulate the market. According to the document, institutions with good credit will enjoy perks such as fast-tracked administrative approvals. Meanwhile, those with bad credit could potentially incur restrictions on stock issuance, bidding for government projects, access to loans and tax incentives, luxury consumptions, and also encounter increased regulatory inspections.
The NDRC and 12 other government bureaus released a plan to help zombie companies and financial institutions exit the market, according to a Tuesday statement.
The guidance requests regulators to specify procedures for taking over and restructuring troubled financial institutions. They also strive to lower the cost of the restructuring and liquidating process for bankruptcy.
The regulators said that for those SOEs that meet the exit conditions, no party shall hinder their withdrawal in any way. They also said that it is against the rules to sustain zombie enterprises by providing government subsidies and loans.