Chinese and Hong Kong stocks surge today on reports that China has sent written responses to the US regarding the concessions it’s willing to made. That could pave the way for some sort of agreement during Xi-Trump meeting at the G20 summit on November 30. The act is generally seen as constructive for the trade negotiations.
However, concerns remain as most of China described in the documents were just old wine in a new bottle. They’re just recap of what Xi Jinping has announced recently, such case raising the equity caps on foreign investments in some industries. There is so far nothing substantial regarding opening of the markets and removing barriers on trade and investments. Mostly likely too, there wasn’t anything regarding the highly criticized dominance of State-Owned Enterprises in the country.
Further more, at this point, Treasury Secretary Steven Mnuchin is the one handling the discussion with China. Even if White House economic advisor Larry Kudlow would be involved, they remain far from the stage of making a trade deal. The work of trade agreements fall into the area of trade representative Robert Lighthizer. And, not until Lighthizer is involved, there would only be ceasefire, but no constructive progress.
Nevertheless, investors in Asia are enjoying the ride no matter what. The China shanghai SSE closed up 1.36% at 2668.17. Hong Kong HSI closed up 1.64% or 421.17 pts at 26075.60.
