In the news: The U.S. and EU deny China market economy status, retail and factory data stabilize and the Foreign Ministry welcomes Trump's China ambassador pick

China's retail and factory data show pickup in economy

China's economic stabilization held through in November, giving policymakers more room to focus on curbing financial risks. Industrial production climbed 6.2% from a year earlier, while retail sales rose 10.8% last month. Fixed-asset investment increased 8.3% in the first 11 months of the year. Stabilizing levels of output and robust consumer sentiment reflect positive investment and economic growth. This will allow the People's Bank of China to focus on curbing risks like excessive leverage in the financial system, such as by driving up short-term borrowing costs and easing a property bubble.

China welcomes U.S. Ambassador to China nominee Terry Branstad

The PRC government has praised Trump's nomination of Iowa Governor Terry Branstad as the next U.S. ambassador to China. Branstad, who the Chinese Foreign Ministry called an “old friend” of its people, has known President Xi Jinping since 1985, when the latter visited Iowa as a young official on an agricultural research delegation. The two have visited each other on several occasions since. China is Iowa's second-largest export market after Canada. The appearance of bonhomie aside, China has warned Trump to be careful. He will face “serious consequences” if he tries to revise U.S. policy toward Taiwan, the state-run China Daily reported recently. The Republican's recent phone call to the president of Taiwan, which China sees as its territory, angered Beijing. Trump would do well to avoid pushing China too far, and Branstad may give good advice.

China challenges U.S. and EU over anti-dumping duties

China said on Monday it would challenge the U.S. and EU over how they calculate anti-dumping duties on Chinese exports. The Ministry of Commerce (MOFCOM) said on its website that the nation has launched dispute resolution procedures against the two trading partners under World Trade Organization (WTO) rules, and that the U.S. and EU “have not fulfilled their obligations” under the terms of China's WTO accession in 2001, which permitted member states to calculate anti-dumping duty rates based on different methodologies than against other “market economy” nations for a 15-year period. The deadline expired on Sunday, and the U.S. and EU have opted not to embrace the change, arguing that China is still not a market economy. A PRC trade lawyer told China Law & Practice earlier that “any argument from the U.S. or EU is unlikely to prevail at the WTO level”, while a Washington, DC-based partner said that the two jurisdictions' failure to honor Section 15 is “an obvious violation” and a “blatant act of non-compliance”. Whether China qualifies as a market economy status is a separate matter, as the dispute relates specifically to the validity of the WTO Accession Protocol clause. The Obama administration decided it won't grant China market economy status last week, with President-elect Donald Trump also announcing at a rally that “China is not a market economy.” Meanwhile EU governments reached an agreement on Tuesday to permit higher tariffs on cheap raw material imports to defend themselves against unfair trade practices, after the bloc launched a new investigation into Chinese steel. The WTO dispute proceeding—with all the negotiations, appeals and sanctions involved—will most likely span years. This story has more on the issue.

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China approaches WTO watershed

China's retail and factory data show pickup in economy

China's economic stabilization held through in November, giving policymakers more room to focus on curbing financial risks. Industrial production climbed 6.2% from a year earlier, while retail sales rose 10.8% last month. Fixed-asset investment increased 8.3% in the first 11 months of the year. Stabilizing levels of output and robust consumer sentiment reflect positive investment and economic growth. This will allow the People's Bank of China to focus on curbing risks like excessive leverage in the financial system, such as by driving up short-term borrowing costs and easing a property bubble.

China welcomes U.S. Ambassador to China nominee Terry Branstad

The PRC government has praised Trump's nomination of Iowa Governor Terry Branstad as the next U.S. ambassador to China. Branstad, who the Chinese Foreign Ministry called an “old friend” of its people, has known President Xi Jinping since 1985, when the latter visited Iowa as a young official on an agricultural research delegation. The two have visited each other on several occasions since. China is Iowa's second-largest export market after Canada. The appearance of bonhomie aside, China has warned Trump to be careful. He will face “serious consequences” if he tries to revise U.S. policy toward Taiwan, the state-run China Daily reported recently. The Republican's recent phone call to the president of Taiwan, which China sees as its territory, angered Beijing. Trump would do well to avoid pushing China too far, and Branstad may give good advice.