Trump Win Raises Expectations for More China Stimulus

CNBC,

Donald Trump’s victory in the 2024 presidential election has heightened expectations for fiscal stimulus measures in China, set to be announced soon. Trump has threatened to impose tariffs as high as 60% on Chinese goods, which could significantly impact China’s economy by reducing exports by an estimated $200 billion and potentially dragging down GDP by 1 percentage point. Chinese authorities are expected to announce a stimulus package exceeding 10 trillion yuan ($1.39 trillion) during the National People’s Congress meetings this week. Analysts suggest that this stimulus may include debt swaps and funding for local government projects aimed at boosting the struggling economy, which has been affected by a real estate slump and weak consumer spending. As China navigates these economic challenges, the potential for increased tariffs under Trump’s administration could necessitate further government interventions to stabilize growth.

China’s Lawmakers Review Bill to Raise Local Government Debt Ceilings

Reuters,

Chinese lawmakers are currently reviewing a significant bill aimed at raising local government debt ceilings as part of efforts to address hidden debts that have hampered economic growth. The proposal was discussed during the National People’s Congress meetings, focusing on alleviating the burden of local government debt and enhancing fiscal measures. The bill seeks to replace existing hidden debt with more transparent local government bonds. This initiative comes in light of the economic slowdown that China has experienced, attributed to a persistent downturn in the property market and rising local government debt. The government’s strategy includes a large-scale debt swap program and new bond quotas to resolve the debt issue. These measures are seen as essential to support consumer confidence and stimulate investment, particularly as uncertainties in global trade persist.

Zelenskyy Warns of Instability Due to North Korean Involvement

 AP News,

Ukrainian President Volodymyr Zelenskyy has expressed grave concerns following the first reported skirmishes between Ukrainian forces and North Korean troops, marking a new chapter of instability in international relations. These confrontations signify North Korea’s direct involvement in the ongoing conflict in Ukraine, aligning with Russia’s military efforts. Zelenskyy emphasized the severity of this development, noting that the entry of North Korean soldiers into the conflict exacerbates the existing tensions and complicates the situation for Ukraine and its allies. The Ukrainian defense minister confirmed that these encounters are unprecedented, indicating a shift in the dynamics of the war and raising alarms about the potential for broader regional destabilization.

South Korea’s President Denies Wrongdoing Amid Scandal

 AP News,

South Korean President Yoon Suk Yeol has denied allegations of misconduct related to an influence-peddling scandal involving him and his wife. The controversy has escalated as opposition parties exploit the situation to undermine Yoon’s administration, coinciding with critical geopolitical events such as Trump’s election and North Korea’s military activities. The scandal centers on claims that Yoon and First Lady Kim Keon Hee improperly influenced candidate nominations for parliamentary elections in 2022. Leaked phone conversations have fueled allegations that the president provided political favors in exchange for assistance during his campaign. Yoon, whose approval ratings have plummeted below 20%, faces increasing pressure to respond to these accusations while managing delicate foreign policy challenges, including enhancing security cooperation with the U.S. and Japan against North Korean threats.

Russia Views Trump’s Election as Beneficial

 Newsweek,

Dmitry Medvedev, a key ally of Russian President Vladimir Putin, has indicated that Donald Trump’s election victory could serve Russia’s strategic interests, particularly amid ongoing tensions in Ukraine. Medvedev’s comments suggest that Trump’s business-oriented approach may reduce U.S. military support for Ukraine, which Russia views as favorable. Although he refrained from outright celebration, Medvedev pointed to Trump’s skepticism toward international alliances as a potential advantage for Russia. The former president’s complex relationship with Ukraine’s President Zelenskyy raises concerns about the future of U.S. aid, critical for Ukraine’s defense against Russian aggression. As Russia continues its military campaign, the implications of Trump’s presidency could significantly influence the conflict’s trajectory and international responses.

China Prepares for Potential Tariffs Under Trump

Bloomberg,

In light of Donald Trump’s reelection, Chinese President Xi Jinping is reportedly better prepared for a renewed trade confrontation with the United States. Trump has threatened to impose tariffs up to 60% on Chinese imports, which could have devastating effects on bilateral trade and China’s economy. In anticipation of these developments, Beijing has been enhancing its economic resilience, implementing strategic measures to mitigate the potential fallout. Analysts expect that if tariffs are enacted, China will respond with substantial stimulus packages to bolster domestic consumption and counteract trade losses. Despite these preparations, the uncertainty surrounding Trump’s policy directions poses significant risks, as any trade war could have far-reaching consequences for global markets and supply chains.