(Bloomberg) — European Union governments signaled support on Monday for completing work on a long-sought agreement with China to open the Chinese market further to EU investors, bringing closer a major economic and political victory for both sides.
EU member-country envoys urged the European Commission, the bloc’s executive arm, to complete negotiations with the Chinese government within days, according to a European official who spoke on condition of anonymity because the deliberations in Brussels were confidential. Another official said the commission could announce a draft deal imminently.
A successful conclusion of talks that began in 2013 on an EU-China investment accord would be a salvo against the “America First” challenge to the multilateral order by outgoing U.S. President Donald Trump.
For the EU, the deal would expand access to the Chinese market for foreign investors in industries ranging from cars to biotechnology. Furthermore, the pact would tackle underlying Chinese policies deemed by Europe and the U.S. to be market-distorting: industrial subsidies, state control of enterprises and forced technology transfers.
EU-China Relations
For China, the agreement promises to bolster the country’s claim to be a mainstream geopolitical force and may limit risks resulting from a tougher EU stance on Chinese investments in Europe. It also would strengthen Beijing’s longstanding call for the start of negotiations on a free-trade accord with the EU, which has insisted such a move depended on an investment deal being reached first.
The expected achievement highlights global cross currents after Trump shook the post-war system over the past four years by sidelining the World Trade Organization, starting a tariff war against China and hitting or threatening U.S. allies in Europe with controversial import duties.
EU-China relations themselves have been strained this year. A recent Chinese law curbing Hong Kong’s autonomy has sparked sharp criticism across Europe, while the EU has accused Beijing of spreading disinformation about the coronavirus and targeted China-based operators with the bloc’s first-ever sanctions over cyber attacks.
And while the EU and China pledged in April 2019 to strike an investment accord by the end of 2020, the European side spent recent months downplaying the prospect of a deal this year on the ground the Chinese government needed to make more concessions.
Climate Goals
Through all the ups and downs, the EU has criticized Trump’s confrontational tactics toward China and urged western engagement with Beijing on everything from fighting climate change to overcoming the pandemic.
The bloc helped prod the Chinese government three months ago to commit to a more ambitious climate-protection goal and, when it came to the investment-pact talks, the EU ended up saying significant progress was made across the board.
The planned deal also signals the EU’s determination to assert itself and focus on economic opportunities in Asia even while reaching out to U.S. President-elect Joe Biden to revive transatlantic cooperation. China ranked as the EU’s second-largest trading partner last year (behind the U.S.), with two-way goods commerce valued at more than 1 billion euros ($1.2 billion) a day.
The final parts of the investment accord have been put into place in recent weeks in the shadow of higher-profile EU negotiations with the U.K. on a post-Brexit trade agreement and of a hard-fought deal among member countries on a new European budget and pandemic-recovery fund.
While the Brussels-based commission has negotiated the investment pact for the EU, the imminent breakthrough marks another result for Germany during the country’s six-month presidency of the bloc ending Dec. 31. Berlin has long championed the goal, stressing the importance of more balanced and deeper European economic ties to China.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
