Finance

China ramps up Wall Street meetings as Trump inauguration looms

Published

5 months ago

December 10, 2024

Chinese Vice Premier He Lifeng has met with several U.S. finance executives in the last month as Beijing seeks to build relationships ahead of President-elect Donald Trump’s planned tariffs on China.

He Lifeng is one of China’s four vice premiers, and heads the ruling Chinese Communist Party’s economic and finance committee.

He met with BlackRock Chairman and CEO Larry Fink in Beijing on Dec. 5, and Goldman Sachs President and COO John E. Waldron on Dec. 4, according to state media. That followed a meeting with Citigroup CEO Jane Fraser on Nov. 21, state media said.

“The Chinese are seeking all possible avenues to access those now ascending to power in Washington. The Trump Team,” said Peter Alexander, founder of Shanghai-based consulting firm Z-Ben Advisors. “Back channeling is how China operates, even prefers, when building lines of communications.”

Goldman Sachs said it was aware of the reports. The two other financial firms did not respond to a CNBC request for comment.

Trump has filled his Cabinet picks with at least 10 reported billionaires, including two with a finance-heavy background: hedge fund manager Scott Bessent for treasury secretary and Cantor Fitzgerald CEO Howard Lutnick for commerce secretary.

Xi’s cautious tone reflects concerns about exacerbating structural challenges: Longview's McNeal

“I do think the Wall Street folks that are coming into commerce and treasury will serve a moderating role on the trade protectionist side,” said Clark Packard, research fellow at the Cato Institute. “It’s all relative because I do think there’s going to be something protectionist on the trade side. Those voices will be the voices that work to mitigate some of that.”

“Especially at Treasury they’re pretty worried about market reaction,” Packard said. “The one thing that can truly maybe scare Trump away from a really aggressive [policy] would be the market reaction.”

U.S. stocks are on track for a relatively rare second straight year of more than 20% gains. After tumbling early this year, Chinese stocks rebounded after Beijing signaled a shift toward stimulus in late September. Chinese authorities on Monday affirmed that supportive stance in a high-level meeting.

‘Keeping its options open’

With actions such as hosting Wall Street executives and imposing export controls on critical minerals, Beijing is keeping its options open, said Zongyuan Zoe Liu, who is Maurice R. Greenberg senior fellow for China studies at the Council on Foreign Relations. “They are preparing for the worst-case scenario.”

But she cautioned that it’s unlikely that financial institutions can do much to mitigate tariffs and tensions with the U.S. “Business transactions and Wall Street executives, one way or another, they would not give up opportunities in any market as long as it fits into their profile,” Liu said.

Chinese financial media summarized He Lifeng’s meetings with the U.S. executives as sending a signal on Beijing’s willingness to open up the financial sector and attract long-term, foreign institutional investment. Foreign capital inflows are often cast by Chinese state media as a symbol of support for the domestic market.

The Chinese vice premier also met with Invesco President and CEO Andrew Schlossberg in Beijing on Nov. 12, and HSBC Group Chairman Mark Tucker on Nov. 14, according to state media. HSBC said it had nothing to add to the report. Invesco did not respond to a request for comment.

U.S.-China capital markets have been “arguably the most dynamic and inter-connected aspect” of the bilateral relationship in the last two decades, said Winston Ma, adjunct professor at NYU School of Law.

“When the cross-border finance relationship is constructive and cooperative, it could lead to MAP, i.e. mutual assured [prosperity]; otherwise it will be MAD, mutual assured destruction,” Ma said, referring to a Cold War deterrence principle.

Finance

China’s April retail sales growth of 5.1% misses expectations as consumption remains a worry

Published

3 hours ago

May 18, 2025

Business Finance News

Citizens are shopping at a supermarket in Nanjing, East China’s Jiangsu province, on March 9, 2024.

Costfoto | Nurphoto | Getty Images

China’s retail sales growth slowed in April, data from the National Bureau of Statistics showed Monday, signaling that consumption remains a worry for the world’s second-largest economy.

Retail sales rose 5.1% from a year earlier in April, missing analysts’ estimates of 5.5% growth, according to a Reuters poll. Sales had grown by 5.9% in the previous month.

Industrial output grew 6.1% year on year in April, stronger than analysts’ expectations for a 5.5% rise, while slowing down from the 7.7% jump in March.

Fixed-asset investment for the first four months this year, which includes property and infrastructure investment, expanded 4.0%, slightly lower than analysts’ expectations for a 4.2% growth in a Reuters poll.

The drag from real estate worsened within fixed asset investment, falling 10.3% for the year as of April.

The urban survey-based unemployment rate in April eased to 5.1% from 5.2% in March.

The data came against the backdrop of trade tensions between China and the U.S.

U.S. President Donald Trump placed tariffs of 145% on imports from China that came into effect in April. Beijing retaliated with tariffs in kind, with 125% levies on American imports.

Trade-war fears have receded after a meeting of U.S. and Chinese trade representatives in Switzerland earlier this month led to a lower set of levies between the world’s two largest economies.

Beijing and Washington agreed to roll back most of the tariffs imposed on each other’s goods for 90 days, allowing some room for further negotiation to reach a more lasting deal.

That prompted a slew of global investment banks to raise their forecasts for China’s economic growth this year while paring back expectations for more proactive stimulus as Beijing strives to reach its growth target of around 5%.

This is breaking news. Please check back later for updates.

Finance

Scott Bessent calls Moody’s a ‘lagging indicator’ after U.S. credit downgrade

Published

15 hours ago

May 18, 2025

Business Finance News

Treasury Secretary Scott Bessent said in an interview on NBC News’ “Meet the Press” that Moody’s Ratings were a “lagging indicator” after the group downgraded the U.S.’ credit rating by a notch from the highest level.

“I think that Moody’s is a lagging indicator,” Bessent said Sunday. “I think that’s what everyone thinks of credit agencies.”

Moody’s said last week that the downgrade from Aaa to Aa1 “reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.”

The treasury secretary asserted that the downgrade was related to the Biden administration’s spending policies, which that administration had touted as investments in priorities, including combatting climate change and increasing health care coverage.

“Just like Sean Duffy said with our air traffic control system, we didn’t get here in the past 100 days,” Bessent continued, referring to the transportation secretary. “It’s the Biden administration and the spending that we have seen over the past four years.”

The U.S. has $36.22 trillion in national debt, according to the Treasury Department. It began growing steadily in the 1980s and continued increasing during both President Donald Trump’s first term and former President Joe Biden’s administration.

Bessent also told moderator Kristen Welker that he spoke on the phone with the CEO of Walmart, Doug McMillon, who the treasury secretary said told him the retail giant would “eat some of the tariffs, just as they did in ’18, ’19 and ’20.”

Walmart CFO John David Rainey previously told CNBC that Walmart would absorb some higher costs related to tariffs. The CFO had also told CNBC separately that he was “concerned” consumers would “start seeing higher prices,” pointing to tariffs.

Trump said in a post to Truth Social last week that Walmart should “eat the tariffs.” Walmart responded, saying the company has “always worked to keep our prices as low as possible and we won’t stop.”

“We’ll keep prices as low as we can for as long as we can given the reality of small retail margins,” the statement continued.

When asked about his conversation, Bessent denied he applied any pressure on Walmart to “eat the tariffs,” noting that he and the CEO “have a very good relationship.”

“I just wanted to hear it from him, rather than second-, third-hand from the press,” Bessent said.

McMillon had said on Walmart’s earnings call that tariffs have put pressure on prices. Bessent argued that companies “have to give the worst case scenario” on the calls.

The White House has said that countries are approaching the administration to negotiate over tariffs. The administration has also announced trade agreements with the United Kingdom and China.

Bessent said on Sunday that he thinks countries that do not negotiate in good faith would see duties return to the rates announced the day the administration unveiled across-the-board tariffs.

“The negotiating leverage that President Trump is talking about here is if you don’t want to negotiate, then it will spring back to the April 2 level,” Bessent said.

Bessent was also asked about Trump saying the administration would accept a luxury jet from Qatar to be used as Air Force One, infuriating Democrats and drawing criticism from some Republicans as well.

The treasury secretary called questions about the $400 million gift an “off ramp for many in the media not to acknowledge what an incredible trip this was,” referring to investment commitments the president received during his trip last week to Saudi Arabia, Qatar and the United Arab Emirates.

“If we go back to your initial question on the Moody’s downgrade, who cares? Qatar doesn’t. Saudi doesn’t. UAE doesn’t,” he said. “They’re all pushing money in.”

When asked for his response to those who argue that the jet sends a message that countries can curry favor with the U.S. by sending gifts, Bessent said that “the gifts are to the American people,” pointing to investment agreements that were unveiled during Trump’s Middle East trip.

Sen. Chris Murphy, D-Conn., criticized Bessent’s comments about the credit downgrade, saying in a separate interview on “Meet the Press.”

“I heard the treasury secretary say that, ‘Who cares about the downgrading of our credit rating from Moody’s?’ That is a big deal,” Murphy said.

“That means that we are likely headed for a recession. That probably means higher interest rates for anybody out there who is trying to start a business or to buy a home,” he continued. “These guys are running the economy recklessly because all they care about is the health of the Mar-a-Lago billionaire class.”