Here at our CUSEF blog, we share news, updates and stories about China and the United States. We provide more than a cursory glimpse of what’s going on between the two powers - here, we offer an in-depth look into their current state of affairs.

CUSEF Express

CUSEF Express - May 5, 2022

2022-05-05
Daily highlights of developments that affect China and the U.S.
Daily highlights of developments that affect China and the U.S.

Fed announces biggest rate increase in 22 years

  • To fight the inflation surge, the U.S. Federal Open Market Committee (FOMC) announced a 0.5% rise in the federal funds rate, the most aggressive increase since 2000. The step brought the target range of the benchmark interest rates from 0.25%-0.5% to 0.75%-1%. The already-expected rate hike followed a 0.25% rise in March, and the FOMC has signaled more increases at 50 basis points in the coming months.

  • In addition, the Committee decided to shrink its balance sheet by reducing its securities holdings by $47.5 billion per month from June 1 and step up the pace to $95 billion per month after three months.

  • The U.S. stocks saw their biggest one-day gain two years after the Fed announcement, as the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite closed more than 2% higher on Wednesday. Asian equities tracked the gains in the U.S. market on Thursday.

88 more Chinese firms face delisting in U.S.

  • The SEC added 17 Chinese companies to the list two weeks ago. So far, over 105 out of around 200 Chinese stock issuers in the U.S. are on the list. The conflict between the Chinese national security law and U.S. requirements for foreign issuers of securities is at the center of the dispute.

  • China has been working with the U.S. toward an agreement and is positive about the prospect. In early April, Chinese regulators proposed amending rules of offshore listings, paving the way for a solution. According to a readout (Ch) released on Wednesday night, the Chinese Securities Regulatory Commission will “steadily expand the institutional opening up of the capital market” (稳步扩大资本市场制度型开放).

Blinken postpones China policy speech after Covid infection

  • U.S. Secretary of State Antony Blinken postponed a long-awaited address on China policy after tested positive for Covid 19. Blinken was about to talk about the U.S. security strategy on China in the speech scheduled for Thursday at George Washington University. People expect him to reiterate the policies already in place (document, speech) without adding many details or new approaches to China.

EU plans to ban Russian oil in six months

  • The EU is planning its sixth and toughest batch of sanctions on Russia. Addressing diplomats at the European Parliament, European Commission President Ursula von der Leyen said the bloc would ban crude oil imports from Russia within six months and phase out refined oil products by the end of the year, among other measures.

  • The responses of the EU members are mixed. Hungary and Slovakia, which heavily rely on Russian oil, requested a longer timeframe. Greece, Malta, and Cyprus said the ban on service providers related to Russian oil transportation might harm European businesses. Germany, which had started to reduce its reliance on Russian oil from 35% to 25%, supported the proposal.
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