Asian markets rose Tuesday as investors lock their focus on the resumption of China-US trade talks this week, though hopes for success are being tempered by mixed messages from both sides.
There has been a general feeling of positivity in recent weeks that a solution to the long-running tariffs saga can be found, providing some much-needed support to equities in the face of worsening economic data.
Beijing’s top trade envoy Liu He is due to meet with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin from Thursday.
But observers warn it is unlikely progress will be smooth, with reports this week saying China had cut back on the number of areas it is willing to discuss, suggesting leaders sense weakness in the White House as Donald Trump faces impeachment proceedings and a slowing economy.
Trump said late Monday he preferred to strike a big deal. “We’ve come this far. We’re doing well. I would much prefer a big deal and I think that’s what we’re shooting for,” he told reporters.
And on Monday, the US said it was blacklisting 28 Chinese entities it accuses of being implicated in rights violations and abuses targeting Uighurs and other mostly Muslim minorities in the Xinjiang region. The move bars them from buying US products.
The meeting comes just over a week before a new round of punitive tariffs is due to be imposed on China.
“A large percentage of the market thinks China may roll the dice and take advantage of what they think is Trump’s weakened political state, trying to push negotiations” closer to next November’s presidential election, said Stephen Innes, Asia-Pacific market strategist at AxiTrader.—AFP