In the News: Trade War Ceasefire; Fentanyl; Securities Disputes; and Overseas Portfolio Investment
December 04, 2018 | BY
Jacelyn JohnsonChina and the U.S. on a 90-day trade war truce; fentanyl now a controlled substance; new securities and futures disputes guidelines; and growth in Chinese overseas portfolio investments.
US-China Trade War on Break
The G-20 summit held in Argentina over the weekend saw the U.S. and China pressing the pause button on the ongoing trade dispute for a 90-day period, where the U.S. will hold off on increasing tariffs to 25% on $200 billion worth of Chinese goods in exchange for China's efforts to address trade imbalance including buying a range of American agricultural, energy and industrial products.
During the 90-day period, the U.S. and China will seek agreement on key issues such as China's non-tariff barriers such as technology transfer policies, lack of IP protection and cybersecurity issues.
President Trump said he planned to raise the tariffs to 25% on the $200 billion worth of Chinese imports if he could not get a deal with China within 90 days.
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China Agrees to Make Fentanyl a Controlled Substance
The U.S. came to an agreement with China at the G-20 summit in Buenos Aires over the regulation of opioid fentanyl, a type of drug that is linked to thousands of overdose in the U.S.
President Xi agreed to designate fentanyl as a controlled substance, and will subject people selling fentanyl to the U.S. to China's maximum penalty under the law.
According to Paul Knierim, deputy COO of the global enforcement office of the U.S. Drug Enforcement Administration, one kilogram of fentanyl purchased in China for $3,000 to $5,000 can generate a revenue of more than $1.5 million in revenue on the illicit market with it being potentially lethal to 500,000 people.
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New Guidelines for Solving Securities and Futures Disputes
The Supreme People's Court and the China Securities Regulatory Commission jointly released the Multiple Solution Mechanism for Comprehensively Promoting Securities and Futures Disputes on November 30, in a bid to resolve securities and futures disputes in a just and efficient manner.
The guidelines aimed at protecting the legitimate interests of investors and promote the healthy development of capital markets. The guidelines state that contract and tort liability disputes arising from investment in securities, futures and funds between natural persons, legal persons and unincorporated organizations will be covered by mediation.
For civil disputes arising from misrepresentation, insider trading or market manipulation, the court could make a judgment through a diversified dispute reconciliation mechanism. The guidelines also stress on making full use of online dispute resolution methods.
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China's Overseas Portfolio Investment Continues to Rise
The State Administration of Foreign Exchange reported a continued rise in China's overseas portfolio investment in the first half of the year, reported Xinhua.
At the end of June, China's overseas portfolio investment assets (excluding reserve assets) amounted to $518.3 billion, up from $497.7 billion at the end of 2017, with $308 billion being held in equities, while the remaining $210.3 flowing into bonds.
Hong Kong remains the prime investment destination with nearly one-third of the total invested, while next largest sums were invested in the U.S., followed by the Cayman Islands.
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