China Seems Happy With Phase One Deal
The trade deal between US and China has calmed markets. The deal looks OK to the Chinese, which should keep the sentiment positive
Last year the sentiment was mostly negative, as the global economy slowed down considerably and the trade war escalated, apart from geopolitical tensions. Nonetheless, stock markets had a bullish year, with great help from major central banks which turned dovish again and cut interest rates several times. Although, the sentiment improved as China and the US were agreeing on a partial trade deal.
The deal was signed yesterday, although there were concerns if China could comply with the conditions. But, the Chinese seem content with the deal. Global Times reports cited a commentary by Chinese analysts on the $200 billion purchase of US goods:
“Price of these US products are very competitive so we can’t say China has been taken advantage of.. The agreement also includes terms about the US ensuring market supply, which could mean the US lifting bans on chip exports to China. If that is the case, there is huge potential as China imports $300 billion worth of chips each year.”
The Chinese officials see the Phase One deal as balanced, which is what they were worried about the first time. So, they seem OK with the deal and comments from both sides have pointed towards removing further tariffs after this deal, which will help the sentiment further in financial markets.
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