Finance
China hopes to ‘properly manage differences’ with the U.S. on trade
U.S. President Donald Trump meets China’s President Xi Jinping at the start of their bilateral meeting at the G20 summit in Osaka, Japan, on June 29, 2019.
Kevin Lemarque | Reuters
BEIJING — China is emphasizing its willingness to negotiate as increased tariffs on exports to the United States may soon become a reality.
U.S. President Donald Trump said this week he may increase duties on Chinese goods by 10% as soon as Feb. 1. The White House on Monday also announced plans to investigate China over actions harmful to U.S. commerce.
China’s Ministry of Commerce has always maintained communication with “relevant” U.S. authorities on economy and trade, ministry spokesperson He Yadong said in response on Thursday.
“The Chinese side hopes that under the strategic guidance of the two heads of state, both sides will … strengthen dialogue and communication, properly manage differences, expand mutually beneficial cooperation and promote the stable and healthy development of China-U.S. economic and trade relations,” He added during a weekly press conference. That’s according to a CNBC translation of his Mandarin-language remarks.
Trump said last week that he spoke with Chinese President Xi Jinping over the phone about TikTok and trade. The Chinese side’s readout did not mention the social media app, but said Xi called for cooperation and cast the two countries’ economic ties as mutually beneficial.
“Tariffs are not conducive to China or the U.S., or the entire world,” commerce spokesperson He said.
“China is willing to work with the U.S. to push bilateral economic and trade relations in a stable, healthy and sustainable direction,” He said, noting that was on the basis of “mutual respect, peaceful coexistence and win-win cooperation.”
The comments echoed those of China’s Foreign Ministry spokesperson Mao Ning on Tuesday.
“We stand ready to maintain communication with the U.S., properly handle differences, expand mutually beneficial cooperation and pursue a steady, sound and sustainable development of China-U.S. relationship,” Mao said when asked about negotiations over tariffs.
“China will also firmly defend its own interests,” she said. That’s according to an official English-language transcript.
Even if 10% tariffs are imposed on China, that’s far lower than the original 60% that Trump had floated during his campaign.
Hours after his inauguration on Monday, Trump reiterated plans for 25% tariffs on Mexico and Canada, without specifying a figure for China. He said only that increased duties might be used to force Beijing-based ByteDance to sell social media app TikTok, whose future availability in the U.S. is now in question.
When asked about TikTok on Thursday, Chinese commerce spokesperson He said China “hopes the U.S. side will listen more to the voices of businesses and the public,” and “do more things that are conducive to economic and trade cooperation between China and the United States and the well-being of the people.”
It appears T. Rowe Price is benefitting from the record growth in actively managed exchange traded funds.
Tim Coyne, the firm’s head of ETFs, reports the firm is seeing significant growth in the area — listing the T. Rowe Price Capital Appreciation Equity ETF (TCAF) and T. Rowe Price U.S. Equity Research ETF (TSPA) as two established strategies that can satisfy investor demand.
“I think having that professionally managed portfolio is really beneficial to clients,” Coyne told CNBC’s “ETF Edge” this week. “We’re seeing just… greater volatility [and] uncertainty across both the equity and fixed income markets.“
According to Coyne, the T. Rowe Price Capital Appreciation Equity ETF suits investors who are looking for long-term growth.
“The objective of the fund is to outperform the S&P 500 with lower volatility and greater tax efficiency,” he said. “It’s also a more concentrated portfolio, typically holding around a hundred names.”
As of April 24, the fund’s top holdings include Microsoft, Amazon, and Apple according to the T. Rowe Price website. But it’s not all Big Tech. The ETF also features smaller positions in companies like Becton Dickinson and Roper Technologies.
The T. Rowe Price Capital Appreciation Equity ETF is down about 5% so far this year while the S&P 500 is off about 7% However, the ETF is up close to 8% over the past year — roughly identical to the S&P 500’s performance.
Coyne notes the T. Rowe Price U.S. Equity Research ETF follows a similar strategy, but with a heavier weighting in top tech stocks.
“This is more of a large-cap growth product [T Rowe Price U.S. Equity Research ETF],” he said. “There are components of characteristics of both passive and active here. This fund is actually managed by our North American directors of research. So again, strong fundamental research is going into the stock selection.”
Both the T. Rowe Price U.S. Equity Research ETF and S&P 500 are down around 7% since the beginning of the year. Meanwhile, the fund is up almost 9% over the past year. That’s less than one percent better than the S&P 500’s performance.
T. Rowe Price U.S. Equity Research ETF vs. S&P 500
‘Some form of bear market’
Strategas Securities’ Todd Sohn thinks investment demand for active managers will continue to be strong.
“This is the type of the environment where it [active management] can actually shine,” the firm’s senior ETF and technical strategist said. “We are in some form of bear market. This is where the active manager really can come into hand and offer their solution they are doing right.”
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