Business News

CCTV Script 04/04/18


— This is the script of CNBC's news report for China's CCTV on April 4, Wednesday.

The imposition of tariffs focus on the Chinese high-tech products in this round, however, at present, this tariffs policy is opposed by the high-tech giants and consumers. Among them, the Information Technology Industry Council has clearly expressed their disagreements to this tariffs policy. The tech giants in Silicon Valley that are supported by this Association, including Google, Facebook, Apple, Microsoft, and IBM etc. The reason why they against this policy is that the restrictive measures taken by the government may led to the downswing of manufacturing industry, raise the cost, and weaken their competitiveness in the international market. That means the "help" from the White House will bring an irreparable damage to the supply chain that has been established over the past decades.

[Mary Lovely, Professor of Economics, Syracuse University/ nonresident senior fellow at the Peterson Institute] "They should be worried because they depend heavily on global supply chains, particuarlly in communication, computer parts - those are some of the most heavily fragmented production processes, A lot of their basic production is located in China, and mediated by foreign investment/enterprises."

Meanwhile, the giants worry about imposing tariffs on Chinese tech companies may lead to US companies losing the chance to invest in China, the giants of the high-tech industry, including General Electric and IBM disagree with the White House, saying that the imposition of tariffs from both sides and investment restriction will make US not be the most profitable and fastest-growing market in the world. These multinational corporations state that this policy is harmful to the position of US firms aboard. While the investment banks, including Goldman Sachs, also expressed their concerns to the investment restrictions, saying this may weaken the US economy.

[Melanie Hart, Center for American Progress] "US states workers and companies are being harmed in the progress. They should be pushing the administration for a much more effective strategy against the broader array of economic challenges we're seeing with china. so far, we've already seen that we've got many industries in California being hit. fruits, nuts, steel pipe, aluminum scrap, so far we haven't seen big measures against soybeans and boeing aircraft. that could certainly be in the pipeline depending on how this new USTR list shakes out."

After several days plunge in the US share market, the S&P 500 fell below the correction zone, and the stock market claw back gains, but the risk factors still exist, many investors still worry about the result of Sino American trading friction.

[Vincent Au, Portfolio Manager] "Right now, I've been hoping for that list myself and I think for investors, you gotta think of extremisms at this point. I think that very few sectors would you say that this is not gonna be taboo or it's gonna be safe guarded because, you know, I think that as the list goes on and as the fight goes on, both countries will just keep picking up, sectors on that list."

In the Sino-US trade dispute, the next steps from both side, especially those from China, may escalate. The global stock market will definitely be influenced by the trade tension; we will keep an eye on this issue.