China sizes up hawk Lighthizer as trade talks begin
Beijing confirms intention to reach common ground within 90-day timetable
"The economic and trade teams of the two sides will actively promote the consultation work within 90 days in accordance with a clear timetable and road map," said a spokesman for China's Ministry of Commerce.
The Chinese government had "confidence in the implementation," of what was agreed at the meeting between Trump and President Xi Jinping in Argentina on Saturday, he said.
Beijing would "start from implementing specific issues [on which they] have reached consensus," he added, without specifying the details.
Experts say the selection of China hard-liner Robert Lighthizer, the U.S. trade representative, as Trump's point man is not entirely bad news for Beijing.
Chinese Vice Premier Liu He, China's chief trade negotiator and Xi's close aide, was reportedly skeptical of dealing with Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross, who led a previous round of trade talks.
In May, Mnuchin declared, "We are putting the trade war on hold," after a two-day consultation with Liu, who had flown into Washington. The two issued a joint statement on trade consultations that spoke of China significantly increasing purchases of American goods and services.
That accord, in the months that followed, was thrown out the window. Lighthizer, who seems to be more trusted by Trump, should prove a more suitable negotiating partner, China hopes.
Jin Canrong, a professor at Renmin University of China, noted optimistically that the Americans made no mention of the Made in China 2025 high-tech manufacturing initiative, which had been a major sticking point. "The U.S. demands are specific and things that China can meet," he said.
While U.S. officials have begun to disclose some of the commitments made by Xi at the summit, such as reportedly agreeing to remove the 40% tariff on U.S.-made cars and offering to buy an additional $1.2 trillion worth of American goods, including agricultural products, energy and autos, Chinese officials have avoided going into the details.
Foreign Ministry spokesman Geng Shuang said at a news conference Monday that the two sides "put forth a series of constructive proposals on how to resolve the existing differences and problems," and that "China is willing to open its market, expand imports and help mitigate the relevant China-U.S. trade issues." He did not go into the topic of auto tariffs.
The fact that Xi was yet to return to Beijing may be one reason for the muted response.
The state-run Xinhua News Agency issued a commentary Sunday that said, "Saturday's meeting put the brakes on escalating trade friction between the two countries," and that "due to the sheer sizes of both economies and the complexity of their economic relations, substantial settlement of differences will take time."
A White House insider said Lighthizer considers easy compromises with China as a "waste of time."
Trump tweeted Tuesday that talks will last 90 days from his summit with Xi "unless extended." The clock is ticking for the two sides to keep the trade war from escalating further.
Le jeu de poker menteur sur la consolidation dans les télécoms
A l'heure où Free place sous les projecteurs sa nouvelle box , dans l'ombre, c'est encore et toujours la thématique de la consolidation qui agite les opérateurs. La consolidation dans le secteur des télécoms, tout le monde en parle mais... personne ne la fait. Il y a déjà eu sept tentatives de réduction du nombre d'acteurs de quatre à trois ces dernières
années. Toutes les formes d'association ont été envisagées, ou presque. Rachat de Bouygues Telecom par Orange ou par Iliad-Free, rachat de SFR par Bouygues Telecom...
Rien n'y fait, cela ne prend pas, même si tout le monde y pense. La semaine dernière, Alain Weill, le PDG de SFR, se disait ainsi « convaincu » que le retour du marché des télécoms à trois opérateurs se ferait « assez rapidement ». Stéphane Richard, le PDG d'Orange reconnaissait lui aussi récemment dans nos colonnes qu'une consolidation était inévitable...
Fenêtre de tir
Si le secteur des télécoms s'agite sur cette question en ce moment c'est parce qu'il estime qu'une fenêtre de tir s'ouvre pour engager des discussions au premier semestre 2019. Audelà, quand sera lancé l'appel d'offres pour des frequences 5G, les operateurs ne seront autorises (pendant plusieurs mois) a nouer des alliances structurantes.
Chacun des quatre acteurs aurait intérêt à la consolidation. Elle rendrait le marché moins concurrentiel, apaiserait la guerre des prix et contribuerait à faire remonter les chiffres dáffaires.
Tous en ont besoin. Orange a des coûts de structure importants et doit booster son cours de Bourse qui plafonne. SFR a, fait inédit, perdu 10 % de son chiffre en un an. Et pour Bouygues Telecom et Iliad, moins gros que les deux premiers, cela leur permettriat dámeliorer leur capacite de financement a l heure de lourds chantiers: deploument de la fibre optique et 5G, notamment.
Donald Trump tweet rebutted? China vows to carry out ‘concrete’ terms of trade truce
- Beijing will act on the agreement ‘the sooner the better’, says ministry, without giving details of deal terms or timetable for further talks
- US president tweeted on Monday that China had agreed to remove tariffs on American-made cars
China will implement the “concrete” terms of the trade truce deal agreed on Saturday by Chinese President Xi Jinping and US President Donald Trump, with steps to carry out the agreement coming “the sooner, the better”, the Chinese Ministry of Commerce has said.
“The meeting [between Xi and Trump] was successful. We are confident in implementing [its outcome],” a spokesman for the ministry said in a statement on the ministry’s website.
The spokesman did not elaborate on what exact terms had been agreed by the two leaders. The Chinese government has so far been silent on the details of the trade truce agreement.
“China will start with implementing the concrete items we have agreed. The earlier the better,” said the spokesman, who was not identified.
In addition, negotiations to address other aspects of the US-China trade war would start soon, based on a set framework, the statement said.
“The economic and trade teams of both nations will actively push for consultations based on the concrete timetable and road map within 90 days,” the spokesman said.
The spokesman did not say when the talks would be begin.
The South China Morning Post reported on Tuesday that China was preparing to send a delegation of as many as 30 officials to Washington later this month to begin the talks.
The reference to implementing “concrete” items in the deal may be a response to Trump’s declaration in a tweet on Monday that China had agreed to remove tariffs on imported US-made automobiles.
White House economic adviser Larry Kudlow later said that although there was a general sense from the Trump-Xi meeting that this would happen, there was not yet a formal agreement to do so.
The commerce ministry announcement came after the US stock market plummeted on Tuesday as the outcome of the Xi-Trump talks failed to convince investors that the trade war ceasefire was a true reprieve.
The Dow Jones Industrial Average plummeted nearly 800 points, or 3.1 per cent, to 25,027.
The S&P 500 was down more than 90 points, and the Nasdaq Composite Index slumped nearly 4 per cent, or 283 points.
Few options left for spluttering Renault-Nissan alliance
Finding a way forward without Ghosn’s steering hand will be a big test for the partnership
Shortly after Carlos Ghosn pledged to make the Renault-Nissan alliance “irreversible” this spring, an executive at the Japanese carmaker laughed off the idea that the 19-year-old partnership could collapse without its charismatic boss.
“It’s an alliance that has already overcome cultural differences,” the executive said. “Even if we are told to let go of our hands, we won’t know where to begin.”
Seven months on, the Franco-Japanese alliance is facing its biggest ever crisis following last month’s arrest of Mr Ghosn when his private jet landed at Tokyo airport and his abrupt exit as chairman of Nissan and Mitsubishi Motors, the third alliance member.
Tokyo prosecutors have alleged that Mr Ghosn, who remains chief executive of Renault, understated his pay in financial documents, while Nissan has accused him of using company expenses for personal use. Mr Ghosn, who has not been formally charged with any crime but remains in custody in Japan, denies the allegations, according to state broadcaster NHK.
For the past two decades, the Renault-Nissan alliance was perceived as one of the few successful examples in an industry scattered with ill-fated mergers that crumbled in the face of complex supply chains and diverging national cultures. Take Daimler’s disastrous 11-year partnership with Chrysler that fell apart in 2009. Suzuki also went through a four-year messy divorce from Germany’s Volkswagen.
Even if Renault and Nissan find a way forward without the steering hand of Mr Ghosn, the partnership is unlikely to stay in its current form. The deep strains the alliance is now under raise pressing questions for an industry that needs collaboration more than ever as it confronts new competition stemming from the rise of fully electric, self-driving vehicles.
At one extreme, some carmakers prefer to take full ownership of brands, as was the case with Volkswagen’s takeover of Porsche and Audi. So did China’s Geely when it purchased Volvo Cars from Ford in 2010. But for these cases to work, preserving brand identity and autonomy is critical.
Others such as Toyota and Honda have preferred loose tie-ups that augment each other’s strengths or weaknesses in particular geographies or technologies. Critics of this arrangement point to the lack of clarity on how far the collaboration can go. In Toyota’s case, the ever expanding alliance is starting to look like a shelter for smaller Japanese players — such as Subaru, Suzuki and Mazda — seeking to fend off foreign takeovers.
Then there is Fiat Chrysler, a product of Sergio Marchionne, its late Canadian-Italian chief executive who saved Italy’s Fiat from bankruptcy and merged it with ailing US carmaker Chrysler. Mike Manley, Fiat Chrysler’s new chief executive, will now be tasked with taking the group to its next phase of growth in the absence of the company’s charismatic figurehead who passed away in July.
Yet as the industry has experimented with a wide range of alliances in recent years, none has taken on the lopsided, awkward structure of the Renault-Nissan alliance.
Despite being touted as an “alliance of equals”, it was never a marriage but more a parent-child relationship, at least in terms of capital structure. Under the current terms, Renault has 43 per cent of Nissan’s shares and voting rights, compared with the Japanese group’s 15 per cent non-voting stake in Renault.
Before his arrest, Mr Ghosn had been planning a merger between Renault and Nissan, a deal the Japanese carmaker’s board opposed and was looking for ways to block.
With or without Mr Ghosn, it was increasingly clear to both companies that it was not possible to preserve the original alliance structure that was set up in 1999. The imbalance that was bearable when Renault saved Nissan from the brink of bankruptcy was no longer acceptable as the Japanese group’s annual revenue grew 60 per cent bigger than its French partner.
Even after all those years together, Mr Ghosn’s sudden departure from Nissan has illustrated how easily the bond can be tested and replaced by mistrust. The lingering uncertainty surrounding Mr Ghosn’s arrest and Nissan’s months-long internal investigation into him have made Renault executives uneasy about the way its Japanese partner handled the allegations against their boss.
Having enthusiastically promoted the so-called alliance synergies, it did not take long for Nissan employees to point out what they felt was unequal treatment that allowed Renault to benefit more from their closer links in production and sharing of components.
The Nissan-Renault debacle does not mean that the Toyota way or the VW model for alliances is the better solution.
But if the Franco-Japanese alliance is to survive, there are few options left. Either Renault takes a majority stake in Nissan or the Japanese group increases its holding in the French partner to better reflect the current power balance. Then, there is the more extreme option of the two sides releasing each other to find new partners.
Asian equities dropped in the wake of the biggest slide in stocks on Wall Street since mid-October. U.S. futures advanced after China pledged to quickly implement some steps on trade in the wake of the weekend summit in Buenos Aires. The dollar ticked up.
Stocks fell in Japan, Korea, Australia and Hong Kong, though declines were less than the 3.2 percent tumble in the S&P 500 Index. U.K. stock futures slumped. After days of silence on Saturday’s agreement between Presidents Donald Trump and Xi Jinping, China’s Commerce Ministry said trade negotiations will proceed based on a timetable and it will swiftly execute on items where there is consensus. For his part, Trump tweeted there will be a “real deal” with China, or none at all. China’s yuan gave up some of its recent surge.
Putting a damper on any trade optimism has been a sharp decline in 10-year Treasury yields, to 2.91 percent, which has further flattened the yield curveand served warning that bond traders are anticipating weaker growth. That’s even after Federal Reserve Bank of New York President John Williams on Tuesday reiterated his support for further interest-rate increases and gave an optimistic view of the economy.
US After Hours MRVL +4.7%, HQY +2% are higher, while GWRE -5.3% and OLLI -5.3% are lower following earnings/guidance
Nikkei -0.53% Hang Seng -1.75% CSI -0.48% Shanghai -0.55% Shenzen -0.45%
Eur$ 1.1331 CNH 6.8626 CNY 6.8656 JPY 113.02 GBP 1.2698 RUB 66.80 CHF 0.9995 TRY 5.4330 WTI$ 52.41 -1.58%
S&P -0.84% FTSE -0.91% Dax -0.98% SMI -0.73%
Macro :
- BofA Warns of ‘Baby Bear’ S&P 500 Drop Next Year, Cuts Stocks
- Goldman in Active Discussions With DOJ Over 1MDB Facts, COO Says
- Palladium Seen Breaking More Records, Boosting Automakers’ Costs
- China Is Said to Be Preparing to Buy U.S. LNG and Soybeans Again
Keep an eye on :
- ABBN SW : China Could Be ABB’s Biggest Market in 3 Years, CEO Tells HB
- ALO FP : Siemens-Alstom Deal Sent to Brazil Watchdog Court for Final Word
- BBVA SM : BBVA to Grant More Power to New CEO Genc, Cinco Dias Reports
- BKT SM : Bankinter Sells NPL Portfolio of Over EU200m: El Confidencial
- BMW GY : BMW May Build Powertrains in U.S. to Supplement SUV Factory
- BT/A LN : BT to Strip Huawei Equipment From Its Core 4G Network: FT
- CLASB SS : Clas Ohlson 2Q Operating Profit Misses Lowest Est.
- DAI GY : Trump Tells BMW, Daimler All Carmakers Should Produce in U.S.
- DBK GY : Deutsche Bank Is Said to Settle Frankfurt Cum-Ex Investigation
- DIA SM : LetterOne’s DuCharme Resigns From DIA Board to Focus on Plan (1)
- DUFN SW : Dufry M&A Focus Is on Firms with CHF500m Revenue, CEO Tells FuW
- EDF FP : Centrica’s Stake in EDF’s U.K. Nuclear Plants Said to Draw Bids
- EQNR NO : Equinor Awards Wired Drill-Pipe Contracts to NOV, Schlumberger
- EPR NO : Europris Aims to Open an Average of Five New Stores Net Per Year
- ERF FP : Eurofins Signs Outsourcing Agreement With Signify
- GLEN LN : Vale to Invest in New Caledonia; Reaches JV Deal With Glencore
- INGA NA : ING Group Names Tanate Phutrakul CFO Replacing Koos Timmermans
- KGF LN : Mallya Says Bank Funds Went to Kingfisher Losses on Crude Oil
- LDO IM : Thales, Leonardo to Develop Defence Satellites for South Korea
- LUPE SS : Oil Bosses Battling War-Crime Allegations Fear Broader Fallout
- MRK GY : Merck KGaA Partners With Startup for Image Tagging Software
- NESN SW : Nestle Eyes Latin America Deals as Weak Currencies Boost Appeal
- OFN SW : Orell Fuessli Seeks Acquisition Targets, Chairman Tells T-A
- PTEC LN : Playtech Worth More Than GBP20, SpringOwl Tells DealReporter
- ROG SW : Roche’s Genentech Gets FDA Priority Review for Tecentriq
- SHP LN : Takeda Says at Least 88% of Votes Exercised Approved Shire Deal
- TNET BB : Telenet to Pay Out 50%-70% of Adjusted FCF as Regular Dividend
- TCG LN : Thomas Cook Is Said to Calm Investors Over Rights Issue Concerns
- UBSG SW : Some UBS Clients Affected by Glitch in ’UBS Safe’ App: CH Media
- VOW3 GY : VW Floats a Second U.S. Factory, Possible Ford Tie-Up to Trump
- VOW3 GY : VW Japan Discovers Errors in Test Data; to Brief Press in Tokyo
- XIOR BB : Xior Student Housing Holders Aloxe to Offer EU30m Shrs
- ZURN SW : Zurich on Track to Reach $1.5b Cost Savings Target by End-2019
>>> Up
* Aker Solutions Upgraded to Buy at Kepler Cheuvreux; PT 59 Kroner
* Bakkafrost Upgraded to Hold at DNB Markets; PT 450 Kroner
* Bucher Upgraded to Neutral at Credit Suisse; PT 300 Francs
* Epiroc Upgraded to Overweight at Morgan Stanley; PT 90 Kronor
* HeidelbergCement Upgraded to Overweight at JPMorgan; PT 73 Euros
* Motor Oil Hellas Upgraded to Buy at HSBC; PT 30 Euros
* Salzgitter Upgraded to Neutral at Macquarie; PT 31 Euros
>>> Down
* Assa Abloy Cut to Equal-weight at Morgan Stanley; PT 188 Kronor
* Buzzi Unicem Downgraded to Neutral at JPMorgan; PT 20 Euros
* Electrolux Cut to Underweight at Morgan Stanley; PT 210 Kronor
* Fraport Downgraded to Underweight at JPMorgan; PT 70 Euros
* Glaxo Downgraded to Equal-weight at Barclays
* Hargreaves Lansdown Cut to Underweight at Morgan Stanley
* Kone Downgraded to Equal-weight at Morgan Stanley; PT 46 Euros
* Landis + Gyr Cut to Underweight at Morgan Stanley; PT 58 Francs
* Metso Downgraded to Equal-weight at Morgan Stanley; PT 29 Euros
* Osram Downgraded to Equal-weight at Morgan Stanley; PT 40 Euros
* Saint-Gobain Downgraded to Neutral at JPMorgan; PT 40 Euros
* Schindler Cut to Underweight at Morgan Stanley; PT 202 Francs
* Scottish Salmon Co Plc/The Cut to Hold at DNB Markets
* Tarkett Downgraded to Underweight at JPMorgan; PT 20 Euros
* Ted Baker Downgraded to Hold at HSBC; PT 14.50 Pounds
* Tele Columbus Downgraded to Hold at Bankhaus Lampe; PT 4 Euros
>>> Initiation
* Telefonica Deutschland Rated New Buy at Nord/LB; PT 4.20 Euros
>>> Call
After Hours Summary: MRVL +4.7%, HQY +2% are higher, while GWRE -5.3% and OLLI -5.3% are lower following earnings/guidanceAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: MRVL +4.7%, HQY +2%, MDB +2% (guided Q4 revs above consensus), ESTC +1.4% (also issued upside guidance for Q3 and FY19), ZS +0.5% (guided Q2 and FY10 EPS and revs above consensus)
Companies trading higher in after hours in reaction to news: ADC +1.1% (lightly traded; increased quarterly cash dividend), NWE +0.9% (reaffirmed fiscal 2018 guidance), TROX +0.9% (filed motion seeking a proposed remedy transaction), NOC +0.5% (authorized additional repurchase of $3 bln of its outstanding common stock), GPRO +0.4% (reported "strong" sell-through of its HERO7 product line during Black Friday through Cyber Monday period)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: GWRE -5.3% (issued downside guidance for Q2 and mixed guidance for FY19), OLLI -5.3%, HPE -1.9%
Companies trading lower in after hours in reaction to news: TTD -2% (announced departure of COO Rob Perdue), RH -0.4% (after closing higher by +11%), BIDU -0.3% (priced offering of US$250 mln aggregate principal amount of notes)