1/11/2021 Financial News: Communist China’s new rules tell companies to ignore U.S. restrictions, Goldman Sachs, JPMorgan, and Morgan Stanley to delist some Hong Kong products

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1.Communist China’s New Rules tell companies to ignore U.S. restrictions and allow them to sue other companies if they comply with U.S. restrictions

Communist China’s Ministry of Commerce released a set of rules on January 9 that went into effect immediately. These rules were intended to counter foreign laws that “unjustly prohibit or restrict” people or companies in Communist China from conducting normal business. Although the rules did not mention any specific country, they are likely to put global companies in the middle of the economic wars between Washington and Beijing. The new rules would allow government officials to issue orders that companies do not have to comply with certain foreign restrictions. Chinese companies that incur losses because of another party’s compliance with those foreign laws can sue for damages in Chinese courts.
https://www.nytimes.com/2021/01/09/business/china-rules-trump-biden-sanctions.html
https://www.reuters.com/article/idCNL4S2JK03R

2.Goldman Sachs, JPMorgan, and Morgan Stanley to delist some Hong Kong products after U.S. investment ban

Following a U.S. ban on investments in companies linked to China’s military, U.S. banks Goldman Sachs, JPMorgan, and Morgan Stanley will delist 500 Hong Kong-listed structured products. The three investment banks said in filings to the Stock Exchange of Hong Kong on Sunday evening that these products are linked to telecom companies China Mobile, China Telecom and China Unicom and local indexes including the benchmark Hang Seng Index.
https://www.reuters.com/article/us-china-usa-hkex-idUKKBN29F0EY

3.Several Ministries stated their priority in 2021, including housing, car and money

Recently, the National Development and Reform Commission (NDRC), the Central Bank, the Ministry of Housing and Urban-Rural Development (MOHURD), the Ministry of Finance and other Ministries held their year-end meetings and identified their priorities for 2021. The first priority is about rental housing, according to the NDRC, Central Bank, and MOHURD. The second one is social security. The third one is price stabilization for agriculture products. The fourth is to expand consumption and promote bulk consumption to secure the domestic cycle.
http://www.xinhuanet.com/fortune/2021-01/09/c_1126962503.htm

4.Prices of home appliances on the rise in Communist China

The price increase of home appliances is due to higher price of raw materials. Since last August, the prices of raw materials for home appliances began to rise. For example, the prices of components such as LCD panels and air-conditioning compressors as well as the prices of raw materials such as iron, copper, and steel have increased. In 2020, the price of home appliance raw materials increased by 40%. Recently, transportation costs have also gone up due to severe weather conditions in the north. Experts predict that the price of home appliances will continue to increase for a long time in 2021. The price of home appliances will increase by more than 10% from last year, and the price increase of some products may reach 20%.
https://www.163.com/dy/article/G00KB4G90539GTK1.html

5.Central Bank lifts interest rates limits on overdraft credit card

Recently, the Central Bank has removed the upper and lower interest rates limits on credit card overdraft. The credit card overdraft interest rates can be determined by the issuers and the cardholder through negotiation. Before this, the upper limit was 0.05 percent per day (equivalent to 18.25 percent per year), and the lower limit was 0.7 times the upper limit.
https://www.yicai.com/news/100907667.html

6.Global food prices reached their highest level in six years in December and may continue to rise in 2021

Due to factors such as adverse weather, government safeguarding of supplies, and robust demand, prices of agricultural commodities from grans to pal oil will likely continue to rise, according to the UN’s Food and Agriculture Organization. Such spikes may lead to further inflation, making it more difficult for central banks to offer more stimulus to bolster economies. As drought threatens agriculture in South American while Chinese demand surges, corn and soy futures rallied to six-year highs and palm oil is reaching a 10-year high. Although the FAO’s food price index has risen for the past seven months and annual prices are capping the highest average in three years, costs remain well below peaks in 2008 and 2011.
https://www.newsmax.com/t/newsmax/article/1004589/8

By 【Financial Team – Kate】

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