During the G20 summit in Osaka, Japan, Donald Trump agreed with Chinese President Xi Jinping on the ceasefire in a commercial war.
Although the agreement abolished some of the dark clouds in the world economy, they did not solve the problem, Olav Chen, a portfolio manager at Storebrand Asset Management, said.
– No, this does not solve anything, but they buy time, she says.
Back to the negotiating table
Chen interprets this weekend's statement that the US and China must return to the negotiating table they left at the beginning of May.
"We start negotiations with China where we stopped and see if we could reach an agreement," Trump said at a press conference on Saturday before adding:
– I do not have a bad time.
At present there is not much information on what was agreed at the weekend, but at a press conference, Trump said he would not raise duties on Chinese goods further while negotiations are under way. He also said he would allow Huawei's Chinese technology company to buy parts from the United States again.
Slight key figures
Economic development will soon fall back into the larger part of the world, especially the industry is struggling. This picture is confirmed by the latest Chinese people who arrived on Sunday morning.
According to the Chinese statistical agency, the PMI index for the Chinese industry was 49.4 points in June, which was unchanged from the previous month. The PMI index is based on a survey among Chinese procurement managers, and the figure below 50 indicates a negative growth.
"Charges already imposed are still there, and from a financial standpoint they will still be negative," says Chen.
Europe is most concerned
The Chinese PMI index shows that the industry has reached its peak in the fall of 2017 and began to fall short before the outbreak of the war. The same picture applies to the German industry, where the peak was reached in the same month.
"I'm most concerned about Europe, where we continue to see the macro numbers down. This applies not only to Italy, but also to Germany, the engine of the European economy, says Chen.
The German economy is highly export-oriented, and several economists believe it has suffered from weaker demand from China, but also because of the trade war.
In the United States, the industry remained for a whole year longer than in China and Europe, but last autumn it began to decline. Tax reductions on the Trump could have lengthened the increase.
"In the United States, the pace of growth is declining, and we know that the impact of tax cuts is approaching," Chen said, adding that the market over the past few weeks focused more on the US central bank, which seems to be one or more interest rate cuts rate.
Chen received first support from Daniel Lacalle, chief economist at Tressis SV, who believes the market puts too much emphasis on a commercial war.
"A new trade agreement is likely to have a marginal impact on China and the US economy," Lacalle writes at the CNBC job site.
He believes growth in debt is the main reason for slowing economic growth.
– Global debt has increased to more than 300 percent of GDP, according to the Institute for International Finance, which is no surprise that further debt will no longer result in increased growth, he writes.
Lacalle believes there were clear signs in China there several months before the release of his first duties.(Conditions)Copyright Dagens Næringsliv AS and / or our suppliers. We want you to share our cases with the link that leads directly to our pages. Copying or other forms of use of the entire or part of the content may only be made after the written permission or in accordance with the law. For further terms, see here.