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| HKECIC Weekly Market News |
| 2 October 2018 |
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| Market Snapshots |
| Asia and Australasia |
China: To lower import tariffs for 1,585 taxable items
China announced to lower import tariffs on 1,585 taxable items from 1 November 2018, in a move to serve industrial upgrading, lower corporate costs and meet domestic demand. This represents China's third significant tariff reduction since December 2017, which put the country’s overall tariff rate at 7.5%, down from 9.8% in 2017. Average tariff rate for mechanical and electrical equipment will be lowered from 12.2% to 8.8%. For textiles and building materials, the average tariff rate will be lowered from 11.5% to 8.4%, while paper and some other products will be lowered from 6.6% to 5.4%. The State Council added that China will further open up to create a more fair and attractive environment for foreign investors.
Hong Kong: Exports up 13.1% yr/yr in August
The Census and Statistics Department reported that the value of Hong Kong's total exports of goods increased 13.1% yr/yr in August, after going up 10.0% in July. For the first eight months of 2018 as a whole, the value of Hong Kong's total exports of goods rose by 9.9% over the same period in 2017. The increases were registered to most major destinations, in particular the Mainland China (+12.3%), Singapore (+11.1%), the USA (+10.3%), the Netherlands (+10.1%), Germany (+9.1%) and Thailand (+8.7%). A Government spokesman commented that, while the impacts of the US-Mainland trade conflicts on Hong Kong's exports were seemingly limited thus far, they are likely to turn visible in the period ahead. If the trade conflicts are to escalate further, the global economy and Hong Kong's exports would face more notable downward pressures. |
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| Europe |
Germany: Business confidence remains resilient
Business survey from the Munich-based Ifo Institute showed that the German business confidence remains resilient in September despite worries about trade disputes that could harm growth. The Business Climate Index dropped slightly to 103.7 points in September from a six-month high of 103.9 points in August. Data from the institute showed a fall in the manufacturing sector, while business climate indicator improved in the other three sectors including services, trade and construction. Despite growing uncertainty, the German economy remains robust, the Institute added. |
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| North America |
US: Reach new deal with Canada to replace NAFTA
The US has reached a new trade deal with Canada, to be added into the deal already reached with Mexico. The new United States Mexico Canada Agreement, or USMCA, replacing the current North American Free Trade Agreement (NAFTA), allows US easier access to the dairy product market in Canada. Besides, duty-free cars produced in North America have at least 75% of their content produced in the region, compared with current 62.5%, among other things. Separately, the Federal Open Market Committee (FOMC) has raised the benchmark interest rate for the third time this year, by a quarter of a percentage points to a range of 2%- 2.25%. Median forecasts released by the Fed’s policymakers pointed to one more rate rise this year, followed by three increases in 2019. The Fed now calls for GDP growth of 3.1% in 2018, up from 2.8% in June’s projection and substantially higher than the forecast of 2.5% at the end of 2017. |
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CEO and major shareholder of Sears Holdings Corporation (NASDAQ: SHLD), Eddie Lampert, is proposing a rescue plan to keep the struggling retailer afloat. Lampert’s hedge fund, ESL Investments Inc (ESL), has urged Sears to restructure its liabilities and sell-off real estate and other assets to meet its debt payment due in October, according to a filing with the U.S. Securities and Exchange Commission. The move would reduce the department store chain’s total debt by nearly 80% to approximately US$1.2 billion. |
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Hong Kong Export Credit Insurance Corporation
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Copyright © 2018 Hong Kong Export Credit Insurance Corporation |
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Disclaimer
The information contained in the ‘Weekly Market News’ (WMN) is compiled by the Hong Kong Export Credit Insurance Corporation ("HKECIC") for general information only. Whilst HKECIC endeavours to ensure the accuracy of this general information, no statement, representation, warranty or guarantee, express or implied, is given as to its accuracy or appropriateness for use in any particular circumstances.
HKECIC is not responsible for any loss or damage whatsoever arising out of or in connection with any information including data or programmes on the WMN. HKECIC reserves the right to omit, suspend or edit all information compiled by HKECIC on the WMN at any time in its absolute discretion without giving any reason or prior notice. Users are responsible for making their own assessment of all information contained in this WMN and are advised to verify such information and obtain independent advice before acting upon it.
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