Yesterday Russian president Vladimir Putin treated Xi Jinping to pancakes with caviar, washed down with best vodka, on the sidelines of the Vladivostok economic forum.
It’s a sign that the leaders are committed to their alliance against America powerful position.
As the San Francisco Chronicle puts it:
Beijing and Moscow have developed a “strategic partnership” reflecting their shared opposition to the “unipolar” world, the term they use to describe perceived U.S. global domination.
The rapprochement has been driven by a strong personal relationship between Putin and Xi, seen as the most powerful Chinese leader since Mao Zedong. The two have met nearly 30 times, and Putin said that the Chinese president is the only world leader whom he once invited to celebrate his birthday.
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Introduction: Xi warns ‘politics of force’ are rising
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Trade wars are on investor’s minds again today, as the president of China launches a coded attack on Donald Trump’s economic policies.
Chinese President Xi Jinping warned this morning that the political landscape was becoming increasingly dominated by protectionism and unilateralism.
Speaking at the Eastern Economic Forum in Russia’s Vladivostok, Xi warned that:
“There are deep and complex changes underway in the international situation, the politics of force, unilateral approaches and protectionism are rearing their head.”
Xi’s comments come a few days after Trump threatened China with a further $267bn in tariffs, on top of the $50bn already implemented and $200bn under consideration.
Faced with such firepower from Washington, the Chinese leader is now pushing for closer ties to Moscow.
He told an audience in Vladivostok that China is keen to participate in development projects in Russia’s eastern flank, arguing:
“We have unique geographic benefits. China and Russia are the biggest neighbours, we have solid political ties.
Chinese and Russian relationships are at all times high level.”
That last line may raise eyebrows in London, as the UK pushes for an international response to the Salisbury Novichok poisoning…..
Xi’s comments suggest Beijing is rather concerned by Trump’s enthusiasm for imposing tariffs to get America ‘fair trade’.
He’s not alone. Yesterday, IMF chief Christine Lagarde warned that the US-China trade war could deliver a “shock” to emerging markets, which are already suffering from “fragmented vulnerabilities”.
She told the FT that a new wave of tariffs could cause economic disruption and hurt poorer consumers.
“Trade is a positive, trade is a plus, trade needs fixing certainly but it is a tool and an engine for growth that should not be under threat, particularly at the moment.”
Later today, new output data may show whether the trade dispute is hurting eurozone factories.
Traders will also be watching the oil price, as hurricane Florence approaches the US coast.
The agenda
- 10am BST: Eurozone industrial production figures for July
- 3.30pm BST: US crude oil inventory figures
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