January 2020 Trade Bulletin

Highlights of This Month’s Edition

• Bilateral Trade: The U.S. goods trade deficit with China totaled $26.4 billion in November 2019, 30.4 percent down year-on-year; U.S. soybean exports to China rose in anticipation of a Phase One trade deal.
• Bilateral Policy Issues: Phase One trade agreement between the United States and China leaves structural issues in China’s state-led economic model unaddressed.
• Policy Trends in China’s Economy: Beijing emphasizes stability over reforms at the 2019 Central Economic Work Conference; details come to light on last August’s bailout of Hengfeng Bank, the fourth bank to receive a government bailout amid rising concerns about the stability of China’s financial system; foreign life insurers allowed full participation in China’s economy 19 years after China’s WTO accession; Chinese government agencies will phase out foreign technology products within three years.
• In Focus – Index Inclusions Increase Foreign Holdings of Chinese Securities: Over the last two years, several major global index providers have moved to include RMB-denominated securities in key indexes, leading to a projected $405 billion expansion of foreign portfolio investment in China.