Bridge to nowhere? Some doubts on U.S. economy justified, doom and gloom is not

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Wall Street scurrying for the exits? More and more investors apparently see the economy becoming a bridge to nowhere.

Just a few months ago, investors drove the U.S. stock market SPX, -2.33%  to an all-time high. Now they’re scurrying for the off-ramp and showing fresh doubts about economy. Have things really gone south that fast?

Not really.

The economy is forecast to grow at an above-average speed of 2.6% in the fourth quarter, for one thing. Consumer confidence is at a two-decade high. The unemployment rate remains at a 49-year low. And the holiday shopping season is shaping up to be a big one.

Still, some warning signs have emerged.

Home sales have softened after a rise in mortgage rates. Corporate investment has tapered off. Job creation slowed in November. And a festering trade dispute with China and resulting tariffs have raised costs for businesses and consumers.

“It’s becoming clearer by the day that the best days for this economic cycle are behind us,” asserted Scott Anderson, chief economist of Bank of the West.

The sudden shift in perception is forcing the Federal Reserve to reconsider how many times it will raises interest rates in the next year.

Not only does the economy seem a touch more vulnerable than it did a few months ago, a recent upturn in inflation also appears to have crested. The Fed has been gradually raising rates to head off an unwelcome increase in rates, but now the problem seems less urgent.

One sign came last week in a weaker-than-expected November employment report. The economy added just 155,000 new jobs — well below the 190,000 forecast — and the yearly increase in hourly wage growth stood pat at 3.1%.

More evidence might emerge this week. The consumer price index, which tracks the cost of living, could show a flat or even negative reading for the first time in eight months. The annual rate of inflation as measured by the CPI could drop to a nine-month low of 2.2% from 2.5%

Similarly weak readings are likely in other inflation barometers for wholesale U.S. goods and imported products.

What’s a common thread?

Falling oil prices . A surge in petroleum helped fuel an upturn in inflation earlier this year that spurred the Fed to raise U.S. interest rates three times. Now lower oil prices are acting as a brake on inflation.

Lower oil prices CLF9, +1.24%  will probably deliver seemingly disappointing retail sales in November.

Americans spent a lot less filling up at gas stations, making it look like retailers had a bad month. Economists polled by MarketWatch predict a lackluster 0.2% increase.

“Here’s a word of advice on anyone planning to use the November retail sales report as a guide to how the holiday shopping season is going: don’t,” said chief economist Richard Moody of Regions Financial.

[“source=forbes]

Cramer’s lightning round: Barnes & Noble’s stock is trading like it could get acquired

Image result for Cramer's lightning round: Barnes & Noble's stock is trading like it could get acquiredBarnes & Noble: “I’m going to say something I typically wouldn’t say, but it does feel like it’s getting a bid or something, because it just goes up, up and up and yet the fundamentals are not great. So, I don’t want to recommend a stock on a takeover basis, but I see what’s happening and it seems pretty positive.”

Booz Allen Hamilton Holding Corp.: “It’s not a bad stock. A lot of people don’t talk about it. I think it’s pretty good. Now, candidly, I like Accenture more. I like ACN, really, a lot more.”

TE Connectivity Ltd.: “It’s interesting. It’s not great. It does network solutions, got a little cable stuff in it. It’s not compelling enough for me to pound the table.”

Adobe Inc.: “I cannot recommend this stock on a short-term basis because … I recommended it at $50. It’s at $250. I think you buy some and then you wait for it to come down because we’re not going to play the quarterly game. The quarter’s going to be good, but stocks aren’t reacting to the quarter. They’re reacting to the Fed. They’re reacting to the president. That’s not certain enough for me.”

Global Blood Therapeutics Inc.: “It’s had a very big run and it’s coming back down. I think you sold half and now portfolio management would say, ‘You know what? Let the rest run.'”

Activision Blizzard Inc.: “It has to do with Call of Duty. People think it’s not doing that well. I wish [CEO] Bobby Kotick would come on.”

[“source=gsmarena”]

Why is Nomura upbeat about Indian tyre industry? Apollo Tyres, Ceat & Balkrishna on its radar

    Global research firm believes that the Indian tyre industry is witnessing a phase of cyclical uptick in demand.

    The industry fundamentals are in a better shape now due to the demand and high utilization as well, analysts at the firm wrote in their report.

    It sees 8 percent volume CAGR over FY18-21.

    The segment is a good play on the back of healthy growth outlook, pricing discipline, and benign commodity prices, which will support margins.

    Further, the benign commodity prices could also lead to 20-25% EBITDA CAGR over FY18-21.

    Nomura expects strong demand scenario to keep utilization healthy.

    Among stocks, it has initiated coverage on Apollo Tyres with a target at Rs 288, along with Ceat and Balkrishna Industries.

    On Ceat, it neutral with a target at Rs 1,346. In case of Balkrishna Industries, it is also neutral with a target at Rs 1,008.

    [“source=cnbc”]

    Why is credit card usage on the rise?

    Clockwise from top: Sumit Bali, Ranjit Punja, Surya Bhatia, and Vijay Jasuja

    In the past couple of years, credit card outstanding has been increasing. It went up 35% in value during the April-October period in FY18. We ask experts about the increased focus on credit cards

    Sumit Bali, senior executive VP and head-personal assets, Kotak Mahindra Bank

    If you look at the overall lending market, there is hardly any demand from companies. A lot of repricing is happening, but there is no fresh demand coming in. It is the same story for home loans as well. These are two big segments going through a slowdown. On the large ticket loans, a lot of churn is happening. Borrowers with higher rates of interest are negotiating and getting lower rates or moving to other banks at a lower rate. Overall, that segment is not growing for the bank.

    However, the unsecured piece has been growing. Over the last few years, we have seen systemic change in unsecured lending. Today, you have a lot of information from the (credit) bureaus. Fintech companies give you a lot of data about a customer. Even if you don’t have a customer’s credit history, you can still onboard her based on other data about her. Based on the transaction history from her savings account, though she is a new-to-credit customer, a bank is now comfortable to lend. Also, post-demonetization, acceptance of card has grown.

    Another reason why personal loan is growing is that there is a segment now that is happy to consume now and pay later. Today if you want to go on a holiday or buy latest gadgets, the new generation is happy to take a loan. As consumers, you should use credit card sensibly because ultimately it will reflect on your credit history.

    Vijay Jasuja, chief executive officer, SBI Card

    Overall, credit card spends have increased 42% year-on-year. Our credit card outstanding growth has been 80% year-on-year. There are multiple reasons for the growth in spends. Firstly, the e-commerce boom has increased the spends on the cards. Secondly, the confidence level of consumers to use cards has gone up post-demonetization. Earlier, there was a concept that unless you have a credit history you will not be eligible for a credit card. But now individuals have a higher income in their first year of job itself. But they don’t have a credit history. Technically, they will be called new-to-credit customers. Another segment is the individuals in the tier 1 and 2 cities who see their peers using cards.

    The question is, will the bubble burst if credit card spends go up significantly? In the credit card asset portfolio, the credit card outstanding amount is of people who are away from the due date. There are customers who get their high-value spends converted to EMIs, which has also increased the overall credit card outstanding amount. Then there are people who don’t have sufficient liquidity to pay. They pay a minimum amount and revolve the facility with high interest. This is the segment (that is) risky. About 20-27% of our customers fall in the last segment and it is consistently the same. That means additional and new-to-credit portfolio are not bringing in additional risk.

    Ranjit Punja, co-founder and CEO, Creditmantri.com

    Largely, since the last downturn in the economy, lenders have become careful about who they lend to. They typically only lend to those who have demonstrated a good credit score. They have clamped down on bad credit customers. However, today, with a general upsurge in income, the  whole advent of e-commerce, the ability to pay online and digitally savvy customers has led to utilisation of more income. Banks have started believing that newer fintech models are probably the way to go in terms of underwriting. At this point, it is a drop in the ocean. Banks are making the underwriting journey simpler. There is a lot of data available digitally.

    Time will tell if that is a good way to look at lending. At this moment, the end users are enjoying the benefit. Typically, in the financial world, you see these ups and downs. You will see a bad credit cycle and then delinquencies. I am concerned with newer models that are not time tested.

    As a consumer you shouldn’t spend beyond your means. Credit card and unsecured loans tend to do that to you, especially for people who don’t have the discipline to borrow and repay. Credit card is a simple way to overspend. And interest rates are very high. Being credit wise is critical for someone who has not used a credit card ever. Our advice is to start small, display discipline and make sure you service you debt.

    Surya Bhatia, New Delhi-based financial planner

    The push by the government has helped India convert to a cashless economy. Meanwhile, none of the banks want to miss out on the retail population. The people in the higher income bracket were already having a credit card. Digital banks like Patym Payments Bank will give this a further push. The bigger banks want to have the bigger pie, which includes the HNI segment and those in the higher income group. But the real money in terms of volume is the young population. Everyone wants to grab hold of that population. The young millennials are the people who want to spend, especially digitally.

    There is also a bit of loyalty factor. For instance, I still hold the credit card that I got for the first time. In the last many years, I have bought two other cards and discarded them too. But my first credit card still continues. There is no specific reason why I hold on to it. Every bank wants to cash in on that population. The idea is to catch them young and to make them stick with you.

    Consumers have also changed. They are now spoilt for choices. In the early days, they used to pay for credit cards. Now there is no concept of paying for cards. For instance, if you spend a certain amount, most of the card providers waive off the charges.

    Logically, you should not have more than one card. And better still is stick to a debit card. Once you understand debit cards well enough, then may be opt for a credit card.

    [“Source-livemint”]

    Financial literacy is more than being able to make investment decisions

    Last week one AMC approached me to conduct an Investor awareness session for some corporate employees. I love conducting such sessions so there was no point saying no to them. But before every session, I wanted to make sure the exact number of attendees and their work profile, so I requested the mutual fund house to put me in touch with the HR person who will be arranging the complete show.

    I called up the HR Guy, and he told me that the participants would be of Senior manager profile with high-income scale and specifically said that almost all are “Financially Literate” persons, so the presentation should be of quality and useful to them.

    There was not much I could do on the presentation part as it was a standard one and specifically oriented towards Investments Especially Mutual funds, but I was excited to interact with the Participants, with the kind of profile I was told by the HR person.

    It was a small group of around 15 people. All of them were looking quite mature around 45+ kind of age group.

    Before I start the session, once again one of them told me that they are “Financially Literate people” and have attended this kind of presentation many times before. So, I should tell something which was not new to them.

    This time I told them that when they know themselves so well and even their understanding level is so high, so rather than doing any session lets answer their questions and doubts. All of them agreed.

    As expected the set of questions that came out was, what are the other options to save tax besides Section 80C savings? What mutual funds and other Investment options can help them generate maximum returns? They were looking for specific product advise.

    Starting with tax savings first, I enquired where they were investing currently to save taxes. To which the common reply came was through a home loan.

    Every member of the group was having a home loan, some of them were having two loans. To them it was investment and tax saving both.

    I Further asked how many of them feel that their Job is secure and the Income will keep growing like it was in the past. None of them showed their hands this time.

    My next question to them was what plans do they have in their mind and arrangements in their finances, to take care of home loan EMIs and family expenses, in case something happens to their Job. What is the Liquidity situation in their Investments profile? How much of emergency fund they have saved? Do they have Independent health insurance cover?

    All of them went quiet, but one person got up and said, after all, expenses, and EMI’s there was hardly left for them to save.

    Sensing the anxiety in others’ silence, I started explaining them what exactly I wanted to convey.

    Friends, financial Literacy does not mean to gain knowledge relating to investments only. Financial literacy is the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources.

    You have to understand the role of money in your life and impact of each financial decisions on other important aspects of your personal finance.

    When you are not sure on your tomorrow’s income, how can you bet on long term housing loans and ensure the regular commitment of EMI payments. Tax saving is one thing but that does not call for getting into a long-term liability.

    Investments should not only be looked at from returns perspective only. You need to have a proper understanding of the structure of the product and investment asset class forming the base of that product.

    You have to think on all kind of “What if” scenarios and need to have answers to all of them.

    When you search for high returns without understanding of your requirements and not having hold onto your cash flows, then you are exposing yourself to misselling or may be mis buying.

    And I am sure these real estate investments are the result of the same. When you had bought it at the first place, you must have been pitched with high returns in this asset class, assured rental incomes, plus tax benefits on home loan. All this in combination must have looked like a mouth-watering deal to you.

    And now in today’s scenario, when real estate is into a slowdown, with reduction in the tax benefits by government and increasing in family’s expenses with children going into higher classes, you have started feeling the pinch and now finding solutions in “high returns” of equity.

    Friends, you should think about long term only after ensuring the short term and emergency requirements.  There is difference in making and continuing Investments. Growth in investments should be looked at along with the liquidity and safety concerns, not just tax saving.

    Even if equity markets are going well these days, there’s no surety of it continue giving the same returns always. Long term equity returns are better than other investment asset classes but only if you stay invested for that long-time frame.

    And all this requires understanding of your cash flow positions, your responsibilities, your goals, your risk tolerance, your taxation profile and not just your returns expectation.

    Knowing all these things and the decisions you make for the betterment of life and achievement of goals will decide the wellness in your life. But when you limit your understanding to only investments than you are not doing justice to the financial Literacy levels.

    So at the end, I would like to say, stop searching for best products and never invest in anything just from tax saving perspective, but strive for a good life with better suited products and keep learning to be a wise investor.

    [“Source-moneycontrol”]a

    How AI Is Revolutionizing Digital Marketing

    Artificial Intelligence and digital marketing are beginning to go hand in hand. With the ability to collect data, analyze it, apply it and then learn from it- AI is transforming digital strategy. As it continues to advance, so will the capabilities to use it to improve digital marketing strategies and valuable customer insights for companies.

    Here are 3 ways AI is changing digital marketing for the better.

    Better User Experience

    The most important aspect of a successful digital marketing strategy is great customer experience. When the content is relevant to the user, they are more likely to convert and become recurring customers and have brand loyalty. Artificial intelligence can significantly help with that in its ability to collect data and decide which content is the most applicable based on things like location, historical data and past behavior. When doing so, it gives the user the impression that the brand was built specifically for them.

    For retail, AI can be a game changer for online shopping experiences with new advancements in augmented reality where customers can actually “try” a product before making a purchase. There are now apps where you can actually “try on” clothes to see how items will look on you without ever stepping foot into the store. This means less dissatisfied customers, lower returns and higher engagement online for a brand.

    Voice search technology is also a great addition of AI in digital marketing that can get faster results. Companies can now write their site to coincide with virtual assistants like Alexa, Google Home and SIRI. If you do it correctly, you can move your brand to be the first result on a voice search which can really help with brand recognition.

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    Predictive Customer Behavior

    Not only can AI personalize a customer experience on past behavior, but it can also predict behavior for new and existing users. With the help of data management platforms (DMP) collecting second and third-party data now, AI can collect information about your users across the internet and not just in a session on your site. This can help personalize to their needs automatically through journeys and profiles enabling you to target your potential leads and eliminating those unlikely to convert enabling you to concentrate on formulating and executing effective marketing strategies.

    While it is far from perfect, AI is constantly collecting, analyzing and interpreting data to get smarter at utilizing it. With new algorithms, all the time, accuracy of customer journeys will get more efficient and help determine sales forecasting and ROI so that your business can provide the best experience for customers and right tools to help your business succeed.

    Real-time customer support

    One of the biggest things customers look for in a good digital experience is quick resolutions and response. With the introduction of AI chatbots, an automated tool that gives the impression of talking to an actual customer service person in real time, AI can deliver that experience in real time.

    Chatbots can use terms to seem more “human-like” and can answer basic questions, track and fulfill orders and help solve simple issues. Facebook messenger has integrated the chatbot feature for company Facebook pages to help improve customer service for businesses. These bots can be available 24/7 and can reduce call wait time for customers having issues which can increase customer satisfaction overall.

    Artificial intelligence continues to grow and improve and won’t slow down for a while. Implementing AI into your digital marketing strategy will help customers have a better experience and give your business the insights it needs to succeed.

    Artificial intelligence continues to grow and improve and won’t slow down for a while. Implementing AI into your digital marketing strategy will help customers have a better experience and give your business the insights it needs to succeed.

    [“source=forbes]

    Personal loan vs gold loan: Which is better? Your loans decoded

    Personal loan vs gold loan: Which is better? Your loans decoded

    If you’re dealing with an intense financial emergency or your financial situation has suddenly turned too fluid, there are a pool of options available by banks that can help you get through the distress. For sudden financial need, you can either choose to opt for personal loans, they are most easy and flexible form of borrowing. However, there are also secured form of loans such as gold ones which are actually emerging as an alternative to the personal loan. Both have their own advantages and disadvantages.

    Personal loans

    The procedure to avail a personal loan is also very simple, however, your eligibility for availing this form of loan depends critically on your credit score.

    Generally, personal loans are sanctioned to salaried, non-salaried and self-employed individuals. The documentation and rate of interest is different for personal loans granted to self-employed individuals.

    Personal loans come with tenures ranging from 12 months to 60 months. Some lenders offer tenures starting from 6 months as well.

    One of the most basic advantage of personal loan in comparison with gold ones, is that you do not have to keep any type of assets like property, yellow metal or life insurances, etc. as collateral with bank when you are in need of funds in emergency.

    Personal loans can be taken for many reasons especially during weddings, home renovation or down payment. Considering weddings come with a heavy amount of jewelleries, and not many would prefer keeping their assets as security with bank to opt for loans.

    Majority of lenders disburse a personal loan with 48 hours of time, once a borrower has been selected as per the banks criteria.

    Gold loans

    Unlike personal, the gold loan is seen as a secured form of borrowing for both lenders and borrower. There is trust in the eye of lender, as it sanctions a sum of amount to the borrower against gold collateral. Simply put, a borrower can avail loan from banks by giving his or her gold jewelry, coins or bars as security with them.

    The moment, the borrower finishes repayment of his or her tenure, the bank returns the shining metal on due date.

    One of the key advantages of applying for gold loan, is that they are processed within minutes and are generally kept for short to medium term duration.

    To apply for gold loans, a customer must be above the age 18 years and must own the yellow metal.

    Reason behind why a gold loan is easier, is because the interest rate on these form of loans are cheaper compared to other available options such as personal loan.

    Also, the tenure is very flexible varying from few days to 5 years. Furthermore, a bank or NBFC does not levy any pre-payment charges on gold loans. Documents needed for this form of loan is also very less.

    Which is better? 

    Anuj Kacker, coo and co founder MoneyTap says, “Gold continues to be one of the most popular options for both savings and investments among Indians. Gold is also synonymous with a safety net in case of emergencies.”

    Kacker adds, “Hence gold loans are considered a reliable alternative to lending products. So when in need of funds, which loan to choose – a personal loan or a gold loan? The choice depends upon the tenure of the loan.”

    Explaining, Kacker says, most of the personal loans are collateral-free loans. And hence come with a higher rate of interest. Since longer loan tenure translates to a higher interest, availing a gold loan would be a cheaper option if you are confident of repaying it within a year. Whereas, opt for a personal loan if the loan amount is too big for you to repay it within a year.

    Additionally, Kacker explains, that gold loans usually have a faster disbursal process as compared to personal loans.

    Customers should compare all the options and make an informed choice before opting for the one that suits their needs.

    [“source=cnbc”]

    Germany’s economy is getting hammered by the rest of the world’s problems

    thumbs down germany

    A US trade war, Brexit, Italy — you name it, Germany’s economy is suffering from it.

    Europe’s economic powerhouse is in one of the longest boom phases of the postwar period, but it’s being pounded by a cocktail of international events that ING Economics says is casting doubts on future growth.

    Germany’s Council of Economic Experts also paints a not-so-rosy picture: It expects 1.6% growth for the country this year and only 1.5% in 2019, well below expectations and down from a bumper 2.2% in 2017. Geopolitical issues were at the forefront of the council’s findings.

    “The uncertain future of the global economic order and demographic change present the German economy with major challenges,” the council’s chairman, Christoph M. Schmidt, said in a report published Wednesday. “That is why we are faced with important economic policy decisions.”

    Trade-war fears, ongoing Brexit negotiations, and the continued crisis surrounding Italy’s budget are all dragging on the German economy. That’s not all: “Temporary production-related problems and capacity bottlenecks are dampening the pace of expansion,” the report said.

    Europe’s largest exporter has also seen trade out of the country fall dramatically, with exports dropping 0.8% month-on-month in September. Exports could continue to suffer in the event of a no-deal Brexit or new tariffs on autos out of the US as part of US President Donald Trump’s trade war. Export numbers dropped in four of the past six months and business confidence has been waning as investment opportunities weaken on geopolitical uncertainty, ING said.

    Automakers are suffering, too

    Germany’s malaise dampened the results of auto giants such as BMW. Third-quarter operating profit plunged 27% amid greater competition in global markets. The Financial Times reported Wednesday that new European Union greenhouse-gas emissions targets for automakers — the EU seeks to reduce emissions by 30% — are behind a 0.1% contraction in Germany’s gross domestic product in the third quarter as car companies struggle to adapt.

    In addition, potential Trump tariffs on China are a major issue for Daimler and BMW, which both build SUVs in the US for the Chinese market.

    Researchers from UBS say economic risks are predominantly external but warn that deteriorating labor-market conditions could have an impact. The country’s aging population could also prove to be problematic going forward unless more immigration and improved working flexibility are encouraged across the German economy, according to the economic council.

    [“source=cnbc”]

    China says exports to US rising ‘because American economy is strong and they want to buy our products’

    China’s exports to the United States are still growing, thanks to a strong American economy and consumers’ preference for Chinese products, China’s ministry of commerce said on Monday.

    The delivery of previously placed orders and “front-loading” by Chinese shippers also contributed to a robust performance so far this year, the ministry concluded in a report reviewing and forecasting China’s trade performance.

    As such, the impact of the US trade war on China’s trade and broad economy will be “limited” with “total risks under control”, the ministry concluded in the report.

    “The United States unilaterally provoked economic and trade friction, which not only affects Sino-US trade but has also brought significant uncertainties to the development of global trade and investment,” the ministry said.

    China’s exports to the US rose 13.3 per cent in the first 10 months compared with a year earlier while its imports from the US increased by 8.5 per cent in the same period, according to China customs data. In October alone, Chinese exports to the US rose by 13.2 per cent while its imports from the US fell 1.8 per cent, earning Beijing a trade surplus of US$32 billion last month.

    According to Beijing’s commerce ministry, strong demand for imported products in the US – the result of low unemployment, robust growth and good consumer confidence – is a fundamental factor helping China to sell to the US despite tariffs imposed by US President Donald Trump.

    In addition, the industrial chains of China and the US are “closely integrated” and the two countries’ economic structures are “highly complementary”, the ministry added.

    The US imposed 10 per cent tariffs on US$200 billion worth of Chinese products in late September – a rate set to rise to 25 per cent in January if Beijing does not make concessions.

    The measures followed an initial round of tariffs on US$50 billion worth of products.

    China has responded in a tit-for-tat manner by imposing tariffs on US imports.

    While China’s export data looks solid for now, many economists said the impact of the trade war would start showing up in the first or second quarter of next year, adding to the woes of an economy that is already growing at its slowest pace in a decade.

    China’s trade ministry also said that the country “faces both severe challenges and presents new development potential” next year and that the ministry would work hard to ensure a “steady” trade situation.

    President Xi Jinping is set to meet Trump at the G20 leaders summit in Argentina next month in the hope of easing trade tensions.

    Speaking at China’s first imports expo in Shanghai last week, Xi said China would buy more goods and services from abroad, saying the country’s purchases of foreign goods would be worth US$30 trillion over the next 15 years.

    Xi also announced the country would buy US$10 trillion worth of foreign services in the same period.

    Analysts expect the trade war will see China importing more from other countries as it reduces tariffs. However, China’s growth is likely to slow further in the coming months as the trade war takes its toll.

    In response – amid signals that policymakers are increasingly nervous about the outlook –, the government has launched a series of measures to support the economy, including cutting individual taxes, speeding up infrastructure spending and extending additional financing options to help struggling smaller companies.

    China’s exports to the United States are still growing, thanks to a strong American economy and consumers’ preference for Chinese products, China’s ministry of commerce said on Monday.

    The delivery of previously placed orders and “front-loading” by Chinese shippers also contributed to a robust performance so far this year, the ministry concluded in a report reviewing and forecasting China’s trade performance.

    As such, the impact of the US trade war on China’s trade and broad economy will be “limited” with “total risks under control”, the ministry concluded in the report.

    “The United States unilaterally provoked economic and trade friction, which not only affects Sino-US trade but has also brought significant uncertainties to the development of global trade and investment,” the ministry said.

    China’s exports to the US rose 13.3 per cent in the first 10 months compared with a year earlier while its imports from the US increased by 8.5 per cent in the same period, according to China customs data. In October alone, Chinese exports to the US rose by 13.2 per cent while its imports from the US fell 1.8 per cent, earning Beijing a trade surplus of US$32 billion last month.

    According to Beijing’s commerce ministry, strong demand for imported products in the US – the result of low unemployment, robust growth and good consumer confidence – is a fundamental factor helping China to sell to the US despite tariffs imposed by US President Donald Trump.

    In addition, the industrial chains of China and the US are “closely integrated” and the two countries’ economic structures are “highly complementary”, the ministry added.

    The US imposed 10 per cent tariffs on US$200 billion worth of Chinese products in late September – a rate set to rise to 25 per cent in January if Beijing does not make concessions.

    The measures followed an initial round of tariffs on US$50 billion worth of products.

    China has responded in a tit-for-tat manner by imposing tariffs on US imports.

    While China’s export data looks solid for now, many economists said the impact of the trade war would start showing up in the first or second quarter of next year, adding to the woes of an economy that is already growing at its slowest pace in a decade.

    China’s trade ministry also said that the country “faces both severe challenges and presents new development potential” next year and that the ministry would work hard to ensure a “steady” trade situation.

    President Xi Jinping is set to meet Trump at the G20 leaders summit in Argentina next month in the hope of easing trade tensions.

    Speaking at China’s first imports expo in Shanghai last week, Xi said China would buy more goods and services from abroad, saying the country’s purchases of foreign goods would be worth US$30 trillion over the next 15 years.

    Xi also announced the country would buy US$10 trillion worth of foreign services in the same period.

    Analysts expect the trade war will see China importing more from other countries as it reduces tariffs. However, China’s growth is likely to slow further in the coming months as the trade war takes its toll.

    In response – amid signals that policymakers are increasingly nervous about the outlook –, the government has launched a series of measures to support the economy, including cutting individual taxes, speeding up infrastructure spending and extending additional financing options to help struggling smaller companies.

    [“source=cnbc”]

    Prudential already has a large footprint in China — the challenge is to grow that, says its CEO

    Jason Alden | Bloomberg via Getty Images

    China is committed to opening up its insurance sector just as it’s indicated, but it will be on its own time, said Mike Wells, Prudential Group CEO on Tuesday.

    “Beijing is saying they have a plan for greater opening, and I think like everything in China the time frame is misaligned with U.S. time frames,” Wells told CNBC at the Singapore FinTech Festival.

    “You’re not going to succeed across Asia if you’re not successful in China,” Wells said.

    Prudential, Britain’s largest insurer, has been expanding into China for years. Prudential has a 50-50 joint venture with Chinese conglomerate Citic.

    “We have licenses in about 70 percent of the economic footprint now with China, so our biggest challenge is growing into that footprint quickly,” Wells said.

    China said this year it would accelerate a plan to lift the foreign ownership restriction in life insurance companies to 51 percent and eventually fully scrap the restriction.

    “I think China’s not looking for a flood of foreign models, insurers and management teams in the market but they are saying ‘We want the expertise, the products, the capabilities,'” he said.

    Since August, there have been media reports that China’s most valuable insurer Ping An Insurance Group is looking to buy Prudential’s Asian business.

    Last month, Prudential’s Asia chief executive, Nic Nicandrou, said the insurer had not received any offer for the regional business.

    Asked about the Ping An deal, Wells said he was unable to comment on mergers and acquisitions, but that Prudential now has its hands full spinning off its U.K. business.

    “It’s not off the table but … our days are pretty full right now,” Wells said.

    [“source=cnbc”]