The Week Ahead: India and China Showdown

The US, Canada and Mexico will resume Nafta negotiations. This will be the second of many rounds of talks between the three countries. President Trump has made it clear that the free trade agreement is not in America’s favour. The first round of talks was not cordial. Round two is likely to be acrimonious too.

Meanwhile, the BRICS countries, namely, Brazil, Russia, India, China and South Africa, will meet in the coastal city of Xiamen. The summit comes at an awkward time for India and China, following their dispute over the border area in the Himalayas.

It was touch–and-go as to whether India would even attend the meeting. What’s more, unless an acceptable agreement is arrived at between India and China, the latter could find it difficult to keep the loosely-aligned group together.

That could be terrible for the five countries that are experiencing a slowdown in economic growth to varying degrees. They might not like each other much, but they also know that they need each other.

Staying in China, the world’s second largest economy will report inflation numbers for August. Consumer prices are expected to show a further decline. Elsewhere, China’s services industry is expected to show continued expansion.

The European Central Bank will announce its latest interest-rate decision. ECB President, Mario Draghi, has not provided any clues regarding monetary policy. But it is expected to keep interest rates on hold.

The Reserve Bank of Australia is also pencilled in for an interest-rate decision. With interest rates at a record low of 1.5%, and inflation running at 1.9%, there is no urgency to lift the cost of borrowing.

The central bank will also be mindful of economic growth, which showed signs of coming off the boil in the last quarter. But growth is likely to improve with the improving outlook for the global economy, which is fuelling demand for its exports of coal and iron ore.

And finally, Singapore will report manufacturing numbers. In July the manufacturing sector continued to expand. It was the strongest rate of expansion since April.

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