01/09/2025

MONDAY | SEP 1, 2025

17

BIZ & FINANCE

China manufacturing activity shrinks in August o Truce with America extended but uncertainty persists

Trump demand for Japan to buy more US rice snagged trade talks: Nikkei TOKYO: The American government’s request that Japan buy more US rice caused last week’s snag in bilateral trade talks as Tokyo “strongly objected” to the condition, the Nikkei newspaper reported on Saturday. Japan’s top tariff negotiator abruptly cancelled a U.S. trip on Thursday over unspecified “points that need to be discussed at the administrative level”, the top government spokesperson said, as the two sides try to hammer out details of a July agreement on a reduced 15% tariff on US imports from Japan. The Nikkei , citing Japanese government officials it did not identify, said a revised order from President Donald Trump included a commitment for Japan to buy more American rice. One official criticised the proposal as an “interference in domestic affairs”, the business daily said. The office of negotiator Ryosei Akazawa, Japan’s minister for economic policy, and the agriculture and foreign ministries, as well as the US embassy could not be reached for comment on the report outside business hours. The Nikkei said the new demand contradicted an agreement that Japan would not need to lower its tariffs on agricultural imports. In the July deal, the White House said Japan would boost US rice purchases by 75%. Prime Minister Shigeru Ishiba said the share of US rice imports might increase under an existing tariff-free framework but that the agreement did “not sacrifice” Japanese agriculture. Akazawa’s trip was meant to finalise Japan’s agreement to a US$550 billion package of US-bound investment through government-backed loans and guarantees, the contents of which remain obscure. Japanese officials have repeatedly said they want an amended presidential executive order – removing overlapping tariffs on Japanese goods – before releasing a joint document on the investment details. Opposition leader Yuichiro Tamaki on Saturday questioned the government’s competence and transparency on the trade deal, posting on X that the confusion highlights the danger of operating without a formal text of the deal. “Because there is no written agreement, we cannot confirm what the problem is,” said Tamaki, head of the Democratic Party for the People. Citing “heightened uncertainty” for Japan’s auto industry and its workers, he urged Ishiba to swiftly convene Parliament and provide a full explanation, saying any new agricultural concessions would require legislative approval. – Reuters

Households’ reluctance to take out mortgages was reflected in July bank lending data, which unexpectedly contracted for the first time in 20 years. And consumer spending could take a further hit if a recent ruling by China’s top court banning firms and employees from skirting social insurance payments leads to job losses, with many companies and workers already struggling to make ends meet. Urban unemployment edged up to 5.2% in July from 5% in June. The decision should support cash-strapped local authorities – deprived of land-sale revenue – in replenishing depleted pension coffers, as demands on public finances continue to grow. Extreme weather alone, for instance, has caused US$2.2 billion of road damage since July 1. Analysts polled by Reuters forecast the private sector RatingDog PMI to come in at 49.7, up from 49.5 a month prior. The data will be released today. – Reuters

SHANGHAI: China’s manufacturing activity shrank for a fifth straight month in August, an official survey showed on Sunday, suggesting producers are waiting for further clarity on a trade deal with the US while domestic demand remains sluggish. The official purchasing managers’ index (PMI) rose to 49.4 in August versus 49.3 in July, remaining below the 50-mark separating growth from contraction and missing a median forecast of 49.5 in a Reuters poll. China’s economy is confronting weakening exports due to US tariffs, a property sector downturn, rising job insecurity, heavily indebted local governments and extreme weather. These pressures threaten to derail Beijing’s ambitious 2025 growth target of “around 5%”, according to economists. The non-manufacturing PMI index, which includes services and

fears of losing access to the US, the world’s top consumer market – a push some producers have called a “mad rat race”. Earlier this month, the US and China extended their tariff truce for another 90 days, locking in place levies of 30% on Chinese imports and 10% Chinese duties on US goods, but the uncertainty is eroding confidence on both sides of the Pacific. Profits at China’s industrial firms fell for a third straight month in July, official data showed yesterday, highlighting how businesses are also struggling with subdued demand and persistent factory-gate deflation at home, keeping the pressure on Beijing to roll out more stimulus. Policymakers have ramped up consumer subsidies, but a prolonged property slump is still crimping spending, with real estate a key store of household wealth.

construction, expanded at a quicker pace, rising to 50.3 from 50.1 in August, according to the National Bureau of Statistics (NBS). NBS composite PMI of non-manufacturing and manufacturing was 50.5 in August, compared with 50.2 in July. China’s economic momentum has slowed in the third quarter due to persistently weak domestic demand and a cooling property market, said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. “The macro outlook in the rest of the year largely depends on how long exports can stay strong and whether fiscal policy will become more supportive in Q4.” While July exports beat forecasts, the gain was supported by a low base and driven by a surge in shipments to Southeast Asia, as Chinese exporters scramble to grow market share there amid

Members of a trade association holding posters of Trump shout slogans during a protest against the tariffs imposed by the US on India in New Delhi. – AFPPIC

India will not ‘bow down’, trade minister says after Trump tariffs NEW DELHI: India will not “bow down”and instead focus on capturing new markets, Trade Minister Piyush Goyal said in his first public remarks since Washington imposed steep tariffs on Indian goods. pressure Moscow into ending its war in Ukraine. Since his return to the White House this year, US President Donald Trump has wielded tariffs as a wide-ranging policy tool, with the levies upending global trade. agriculture and dairy markets. Trump wants greater US access, while Indian Prime Minister Narendra Modi is determined to shield India’s farmers, a huge voter bloc. Exporters of textiles, seafood and jewelry have already reported cancelled American orders and losses to rivals such as Bangladesh and Vietnam, raising fears of heavy job cuts.

agreement with us”. But, he added, India “will neither bow down nor ever appear weak”. “We will continue to move together and capture new markets.” The latest tariffs salvo from Trump has strained US-India ties, with New Delhi earlier criticising the levies as “unfair, unjustified and unreasonable”. Trade talks between the two countries have stumbled over

The US was India’s top export destination in 2024, with shipments worth US$87.3 billion. But analysts have cautioned that a 50% duty is akin to a trade embargo and is likely to harm smaller firms.

Goyal said the government would be coming out with several measures in the coming days to support every sector and boost exports. – AFP

The 50% levies on many Indian imports into the United States took effect this week as punishment for New Delhi’s massive purchases of Russian oil, part of US efforts to

Speaking at a construction industry event in New Delhi on Friday, Goyal said India was “always ready if anyone wants to have a free trade