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Contentious US-China relations are clouding global credit conditions

US-China tensions will affect not only global trade, but also technology, investments and geopolitics

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Despite a temporary de-escalation of hostilities following the G-20 summit, the relationship between the US and China will remain contentious, says Moody’s Investors Service in a new report.

Narrow agreements and modest concessions in the ongoing trade dispute will not bridge the wide gulf in their respective economic, political and strategic interests.

At the G-20 meetings that concluded on December 1, the US and China agreed to continue trade negotiations, during which the US will suspend for 90 days the planned increase in tariffs targeted for January 2019, and China will increase imports from the US.

Despite this temporary de-escalation of hostilities, Moody’s expect the relationship between the world’s two
largest economies to remain contentious.

“The US and China have differences that are deep and multi-faceted, leading to diverging national and commercial interests,” says Moody’s Managing Director Atsi Sheth. “As China increases its influence in global economics and politics and the US retrenches its international engagement, the relationship between the two powers has entered a new, tense and uncertain phase.”

Differences in strategic objectives between the two will affect credit conditions in four key areas: Trade, technology, investment and geopolitics.

Neither country is likely to cede its key national priorities to defuse tensions. However, an economic cold war that leads to decoupling would be costly for both the US and China.

The rating agency says relations between the two countries will swing between conflict and compromise.

The impact of US-China tensions on credit conditions will be felt at the global, country, sector and company level. A worsening of tensions would disrupt global trade, erode the effectiveness of the international multilateral trade regime and dampen growth. Financial market volatility will affect valuations and borrowing costs for many debt issuers.

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Bank cuts Thai 2020 GDP growth outlook to 2.7%

SCB’s Economic Intelligence Center (EIC) has released its latest growth forecast, at 2.7 percent, showing a slow recovery from just 2.5 percent economic growth in 2019

Boris Sullivan

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SCB cuts GDP growth forecast to 3.1%

SCB’s Economic Intelligence Center (EIC) has released its latest forecast, indicating that the Thai economy at the end of 2020 will have grown by 2.7 percent, showing a s recovery from just 2.5 percent economic growth in 2019, thanks to a better performing export sector and improved global economy.

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Moody’s outlook for APAC corporates remains negative in 2020

Moody’s Investors Service says in a new report that overall credit conditions for APAC non-financial companies will weaken in 2020

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• While positive, the US-China trade agreement will not resolve core differences, dampening business sentiment globally 

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Bank of Thailand (BOT) orders banks to revise interest rates and fees

Bank of Thailand (BOT) has ordered commercial banks to revise their interest rates, and the fees they charge for their financial products and services including ATM and debit card fees

National News Bureau of Thailand

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Good news for the general public and SMEs as the Bank of Thailand (BOT) has ordered commercial banks to revise their interest rates, and the fees they charge for their financial products and services, including ATM and debit card fees, to help reduce the burden borne by customers.

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