Tag Archives: China

Japan’s exports declined in March as shipments to China dropped more than 9%, pulling the nation’s trade surplus sharply lower.

The data released Wednesday by the Finance Ministry was more or less in line with forecasts. The report followed two days of trade talks with the U.S. in Washington aimed at redressing the chronic imbalance in Japan’s favor, which totaled $67.6 billion in 2018 according to U.S. figures.

Exports from Japan, the world’s 3rd largest economy, fell 2.4% from a year earlier to 7.2 trillion yen ($64 billion), while imports rose 1% to 6.7 trillion yen ($59 billion). The trade surplus dropped 32% from a year earlier to 528.5 billion yen ($4.7 billion), customs figures showed.

Exports to the U.S., Japan’s biggest single overseas market, rose 4.4% while imports fell, increasing the politically sensitive trade surplus by nearly 10, to 683.6 billion yen ($6.1 billion), up 9.8% from the same month a year earlier.

Japan’s exports to China fell 9.4% from a year earlier, reflecting lower demand as the economy slows amid a trade war with the U.S. over Beijing’s technology ambitions.

Darren Aw of Capital Economics said in a commentary that the deficit in March was not a significant concern and that overall, trade may have contributed to economic growth in the last quarter.

“The bigger picture, however, remains unchanged — the outlook for external demand remains weak,” he said.

U.S. Trade Representative Robert Lighthizer’s office said in a statement that he and Japan’s trade minister Toshimitsu Motegi agreed to continue talks soon.

In Tokyo, Chief Cabinet Secretary Yoshihide Suga told a regular news conference that he received a report from Washington that the two sides had started negotiations in line with an agreement last September between Trump and Prime Minister Shinzo Abe. The talks included trade in agricultural products and autos.

“I expect we will have constructive talks so that we have meaningful results that serve our national interest,” he said.

Motegi told reporters that he told Lighthizer that Japan will not compromise on imports of agricultural products, saying that the conditions agreed in past negotiations are as far as Japan could go.

Japan made significant concessions on imports of dairy and other farm products during tough negotiations on the Trans-Pacific Partnership, a Pacific Rim trade deal that President Donald Trump withdrew from shortly after taking office in 2017.

“In the area of agricultural products, conditions we have promised in past economic cooperation is as far as we can go. I have told him that that’s the line Japan cannot go beyond,” he said.

Japan’s conservative ruling party, the Liberal Democrats, have traditionally relied on strong support from rural voters and have sought to protect the country’s farm sector from foreign competition.

China said Thursday that trade talks with the U.S. are “moving forward” after nine rounds of consultations aimed at ending a standoff that has shaken the world economic outlook.

The latest discussions had achieved “new substantial progress,” Foreign Ministry spokesman Lu Kang said at a daily news briefing.

“We also feel that the consultation is moving forward. We hope that the two sides can continue to work together to properly address each other’s concerns on the basis of mutual respect, equality and mutual benefit,” Lu said.

Lu’s comments were echoed by those from Commerce Ministry spokesman Gao Feng, who said “new progress” had been made at the talks.

Gao said the sides were now in “close communications with all effective approaches.”

“They will spare no efforts for the negotiations and working toward the direction of implementing the important consensus reached by both leaders,” Gao said at a weekly briefing.

The three days of talks in Washington last week dealt with issues including technology transfer, intellectual property rights protection, non-tariff measures, agriculture and enforcement of agreements.

Leading the delegations are U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He. White House press secretary Sarah Sanders earlier said “significant work remains” before an agreement can be reached.

The dispute centers on the Trump administration’s allegations that China steals technology and coerces U.S. companies to hand over trade secrets — all part of Beijing’s zeal to overtake U.S. technological dominance. To pressure China, the United States has imposed tariffs on $250 billion in Chinese goods. The Chinese have counterpunched by taxing $110 billion in U.S. imports.

Forecasters at the World Bank and International Monetary Fund, among others, have downgraded their outlook for the global economy in part because the U.S.-China rift is damaging trade and causing businesses to slow investment until they know how the dispute will end.

Tensions have eased somewhat since Trump and Chinese President Xi Jinping met in Buenos Aires late last year and the administration ended up suspending its plans to raise tariffs on $200 billion of Chinese imports to buy time for negotiations.

Significant work remains in trade talks with China, according to a statement from U.S. Trade Representative Robert Lighthizer’s office. President Trump has indicated a deal could be reached in the next four weeks, but the two sides offered little details regarding last week’s meetings, according to Reuters.

Lighthizer says negotiation team members “will be in continuous contact to resolve outstanding issues.” The most recent negotiations included intellectual property, or IP, forced technology transfer, non-tariff barriers, agriculture, services, purchases and enforcement. Agriculture Secretary Sonny Perdue has previously said the negotiations could conclude with a doubling or tripling of U.S. ag exports to China.

U.S. agriculture is impatiently waiting for the results of the talks which stem from the trade war enacted last year between the U.S. and China. The talks are now expected to conclude sometime within the next few months, well beyond the original deadline set by President Trump of March first. However, Trump extended the deadline because the talks were making progress.

Canadian farmers are facing an uncertain future after China escalated its feud over canola on Tuesday.

“There is a lot of confusion amongst farmers about what is able to be exported,” said David Quist, executive director of the Western Canadian Wheat Growers. China blocked canola shipments from a second Canada-based producer on Tuesday over alleged contamination issues.

A statement on China’s General Administration of Customs website said officials detected several hazardous organisms in canola shipments from Regina-based Viterra Inc. Viterra, which is part of Glencore Agriculture, did not immediately respond to a request for comment.

Winnipeg-based Richardson International Ltd. had its export permit revoked in March due to hazardous organisms allegedly found in the company’s product.

Since then, the Canola Council of Canada said all of its members have reported that Chinese importers are unwilling to purchase their products.

The result is uncertainty at the cusp of planting season, which begins in mid- to late-April for many farmers.

Quist said farmers have a lot of questions: “Therefore, a lot of people are saying: ‘What should I be planting? What should I be putting in the ground? Is there going to be a market for my product by the end of harvest season when it’s coming off the field?”

The canola council echoed that concern.

“When China injects uncertainty, it makes growers question whether they should grow food for Chinese people, said Brian Innes, vice-president of public affairs with the council.

Canadian producers will make decisions that are best for their farm, he said.

One canola farmer, David Reid, told The Canadian Press late last week that the reports of a purchasing block by China on Canadian canola will make him think about other options.

“We don’t want to grow something we can’t sell,” he said, adding there aren’t many other crop options in the part of Alberta where his farm is located. Other options available to him tend to sell for less than canola traditionally has, he said.

Both the wheat and canola groups called on the government to send a delegation to China to address the issue.

China — a major market for Canadian canola that accounts for about 40 per cent of Canada’s exports of canola seed, oil and meal — is the sole country to raise a technical issue with the product, said Innes.

Authorities in Canada’s other export markets, including the U.S., Mexico, the European Union, India and Japan, have not raised any issues, he said.

“We’re very perplexed because we’re confident in the quality of our Canadian canola.”

But China raised a technical concern and there needs to be a technical solution, he said.

Prime Minister Justin Trudeau mentioned the possibility of sending a delegation, in response to questions from reporters during a stop in Winnipeg on Tuesday.

“We’re very much looking at the possibility of sending a high-level delegation to China,” he said.

“We know that the canola produced here in Canada is top quality, and the oversight, inspection and science that surrounds what we do here is top-notch and world-class, and that is certainly something that we are going to continue to impress upon … our Chinese interlocutors on this issue.”

Some have suggested the canola ban is connected to the Canadian government’s decision to arrest a top Chinese tech executive in December at the behest of the United States. Canadian authorities arrested Meng Wanzhou, the chief financial officer of Chinese tech giant Huawei, in Vancouver and the government has since approved for her extradition case to proceed.

“But we are taking very seriously this situation around canola as well,” said Trudeau.

Outside of its origins on the African continent, African swine fever (ASF) continues its relentless march through parts of Asia and Europe, causing increasing disruption to the world’s pork production. Much of the world’s attention has been on China due to its No. 1 position in global pork production. The World Organization for Animal Health (OIE) now reports that nearly all of China’s provincial level administrative units (see heat map) have reported one or more ASF breaks, which means all but the far west (and Hong Kong and Macau) of China now has some level of ASF exposure.

Official reports peg China’s losses to culling and mortality at about one million pigs since the outbreak was reported last August. However, unofficial reports put that number as much as 10 times that amount. According to economist Steve Meyer with Kerns and Associates, China’s breeding herd is down 19 percent from one year ago and total market hogs are down 16 percent from a year ago. This has greatly hindered China’s ability to feed its population pork, which it typically desires. This could be a driver behind the recent largest purchase of U.S. pork by China in two years despite the self-imposed tariffs.

Non-governmental reports from U.S. pork industry visitors cite China’s ASF as “endemic,” meaning fleeting hope of containment or eradication anytime in the near future. This is further evidenced by the recent confirmation of the ASF virus in neighboring Vietnam, where it has been confirmed in 17 provinces in the northern part of the country. Other pig-raising countries nearby with growing levels of concern include Thailand, whose pork industry is worth $3.3 billion a year and is considered the region’s most advanced. By some estimates, up to 80 percent of Thai pork is raised on large farms, which should improve biosecurity. However, neighboring countries are typically less sophisticated in their pig-rearing abilities.

 

Imports of canola, a Canadian oilseed crop, will now undergo more thorough inspections in China, the country’s customs agency said Thursday, amid what appears to be a retaliatory move amid a diplomatic row over the arrest of a Chinese executive.

Relations between Canada and China have been tense since December, when Canada arrested Chinese tech executive Meng Wanzhou in Vancouver at the request of the U.S. China warned of “grave consequences” if Canada did not immediately release Meng Wanzhou, the chief financial officer of Huawei.

U.S. prosecutors have filed charges accusing Meng, who is the daughter of Huawei’s founder, of lying to banks about dealings with Iran. Huawei denies any wrongdoing.

Apparent targets of China’s ire have included two Canadians detained on suspicion of harming national security, a third Canadian sentenced to death, and now the Canadian staple canola.

Canola is grown in China, Japan and many other countries.

However, the website for the Canola Council of Canada calls the crop “Canada’s greatest agricultural success story” and the world’s only “Made in Canada” crop. According to the Canola Council, canola was developed by Canadian researchers using traditional plant breeding techniques, resulting in a bright yellow variety of rapeseed whose seeds can be harvested for vegetable oil.

China’s customs administration said in a statement posted to its website Thursday that four customs offices in China found pests such as fungal pathogens in canola imports. It confirmed that it revoked the export permit held by Richardson International Ltd., one of Canada’s largest grain processors.

The agency said stronger inspections and lab testing while canola imports are in quarantine were needed.

Canadian Agriculture Minister Marie-Claude Bibeau said in a statement Wednesday that the Canadian Food Inspection Agency conducted investigations after China issued notices of non-compliance on canola seed imports, including nine since January. She said the agency had not identified any pests or bacteria of concern.

China buys about 40 percent of Canada’s canola exports, and the revocation of Richardson’s permit hurts the entire chain of industries involved in the market, the Canola Council of Canada said.

Meanwhile, the dispute centered on Huawei is simmering.

Huawei announced Thursday that it is challenging a U.S. law that labels it a security risk and would limit its access to the American market for telecom equipment.

BEIJING (AP) — China is blocking some imports of the agricultural product canola from Canada due to fears of insect infestation, the foreign ministry said Wednesday.

The move comes amid a conflict between the countries over Canada’s arrest of a Chinese technology company executive and is seen by some as a new tactic to achieve leverage over Ottawa.

China acted to suspend canola imports from a Canadian company “in accordance with laws and regulations and international practice,” Foreign Ministry spokesman Lu Kang said at a daily news briefing.

Lu cited “harmful organisms” he did not further identify as a threat. He said China’s government “needs to protect the health and safety of its own people.”

“I can tell you responsibly that the Chinese government’s decision is definitely well-founded. Upon verification, China customs has recently detected dangerous pests in canola imported from Canada many times,” Lu said.

One of Canada’s largest grain processors, Richardson International Ltd., said Tuesday that China had revoked its permit to export canola there.

Some saw that as retaliation for Canada’s arrest of a top executive for the Chinese tech giant Huawei.

Canada is proceeding with an extradition hearing for Huawei CFO Meng Wanzhou, who is the daughter of Huawei’s founder. She was arrested by Canada at the request of the U.S., where she is wanted on fraud charges for allegedly misleading banks about the company’s dealings with Iran.

China has a history of using trade measures to retaliate over perceived political slights. It suspended its bilateral trade deal with Norway and restricted imports of Norwegian salmon after the Nobel Peace Prize was awarded to Chinese political prisoner Liu Xiaobo in 2010.

Britain and other countries were also retaliated against over meetings with the Tibetan spiritual leader the Dalai Lama, considered a dangerous separatist by Beijing.

Canadian Agriculture Minister Marie-Claude Bibeau said in a statement that the Canadian Food Inspection Agency conducted investigations after China issued notices of non-compliance on canola seed imports, including nine since January. She said the agency had not identified any pests or bacteria of concern.

China receives about 40 percent of Canada’s canola exports, and the revocation of Richardson’s permit hurts the entire value chain of industries involved in the market, the Canola Council of Canada has said.

Canola prices already have been hit by China’s retaliatory tariffs on U.S. agricultural exports. Further cutbacks on Chinese buying would deal a major blow to what is a lifeline for agriculture in western Canada.

“We are working very, very hard with the Chinese government on this issue,” Canadian Foreign Affairs Minister Chrystia Freeland said Tuesday.

China has warned of serious consequences if the Huawei executive is not released. China arrested two Canadians on Dec. 10 in what was widely seen as an attempt to pressure Canada.

After Meng’s arrest, a Chinese court also sentenced a Canadian to death in a sudden retrial, overturning a 15-year prison term handed down earlier.

DES MOINES, Iowa (AP) — U.S. Secretary of State Mike Pompeo was on a trade mission Monday to persuade Iowa farmers struggling to survive low commodity prices and tariffs that have hurt sales to stand firm with President Donald Trump and his efforts to negotiate better trade deals.

Pompeo, flanked by U.S. Ambassador to China and former Iowa Gov. Terry Branstad, spoke to a group of young suburban Des Moines Future Farmers of America members at a high school in Johnston, Iowa and a gathering of 200 Iowa Farm Bureau members. He toured a DowDuPont agricultural research facility and met with the state’s Republican Gov. Kim Reynolds who has been supportive of Trump.

During questions at the high school he defended Trump’s trade efforts which have yet to resolve an ongoing tariff dispute with China that has cost farmers billions of dollars in lost trade, saying the its protectionist policies of charging tariffs on U.S. goods and stealing U.S. technology had to be dealt with.

“The president concluded, and I think rightly so, that it’s time. We need to be serious about that. That we ought to do this in a professional way, engage in deep communication and negotiation with the Chinese about this so we can get to a place where Americans can sell their goods on a fair, simple reciprocal idea that says if you have no tariffs and we’ll have none,” he said.

He acknowledged such fights are difficult but suggested there could be a resolution, telling the farmers that “help is on the way for American producers and Chinese consumers.”

China is the leading buyer of U.S. soybeans and as recently as 2017 had been the leading buyer of coarse grains, second leading buyer of cotton, third leading buyer of dairy and top five buyer of other agricultural products, he said.

He also acknowledged to the group of Iowa students that negotiations with North Korea fell short and there’s a lot more work to do to convince the nuclear power to change course.

“We made some progress. We didn’t get to where we hoped we’d be and I think there’s a lesson in that and I think there’s a lot more work to do there,” Pompeo told the FFA students.

He said the threat to the United States and the next generation of Americans from the North Korean nuclear weapons is a serious threat.

“My mission as America’s top diplomat is to try and convince them that they don’t need their nuclear weapons; that they ought to change strategic course. They ought to begin to give up those weapons systems in a way that will allow the North Korean people to flourish and reduce the risks here in America.”

Branstad said he believes progress had been made recently with China and a deal could be near but he acknowledged farmers want a resolution.

“Iowa farmers take the long view of things. I think Iowa farmers want to see something long-lasting and permanent and not something that’s just going to be short term,” he said.