US Commerce Secretary Wilbur Ross said on Sunday he had been having frank, useful talks in China about exports, as Washington presses home its message to Beijing about structural economic changes amid a festering trade dispute.
Mr Ross arrived in Beijing on Saturday for trade talks after the Trump administration renewed tariff threats against China, and with key US allies in a foul mood toward Washington after they were hit with duties on steel and aluminum.
Addressing Chinese Vice Premier Liu He, Mr Ross said it had been a great pleasure to spend Saturday with him, when they had dinner together.
“Our meetings so far have been friendly and frank, and covered some useful topics about specific export items,” Mr Ross said, in brief comments before reporters.
Mr Liu spoke only to welcome Ross.
Neither man has made any other comments to the media.
Mr Liu, a Harvard-trained economist who is a trusted confidant of Chinese President Xi Jinping, is China’s chief negotiator in the trade dispute.
US Treasury Secretary Steven Mnuchin said on Saturday the United States wanted this weekend’s talks to result in structural changes to China’s economy, in addition to increased Chinese purchases of American goods.
The purchases are partly aimed at shrinking the $375 billion US goods trade deficit with China.
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Mr Mnuchin, speaking at a G7 finance leaders meeting in Canada where he was the target of US allies’ anger over steel and aluminum tariffs, said the China talks would cover other issues, including the Trump administration’s desire to eliminate Chinese joint venture requirements and other policies that effectively force technology transfers.
“I want to be clear, this isn’t just about buying more goods, this is about structural changes,” Mr Mnuchin said.
“But I also fundamentally believe that if there are structural changes that allow our companies to compete fairly, by definition, that will deal with the trade deficit alone.”
The US delegation at the Beijing talks includes Under Secretary of Treasury for International Affairs David Malpass, Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Ted McKinney, and United States Trade Representative Chief Agricultural Negotiator Gregg Doud.
Other officials and technical experts from the Department of Commerce, Department of Treasury, United States Trade Representative, Department of Agriculture, and Department of Energy are also taking part, the White House said.
China’s delegation includes central bank governor Yi Gang, Commerce Minister Zhong Shan, and Ning Jizhe, a deputy head of the powerful planning body the National Development and Reform Commission.
Mr Ross is expected to leave Beijing later on Sunday.
The US and China have threatened tit-for-tat tariffs on goods worth up to $150bn each.
But just when it appeared a trade truce between the two economic heavyweights was on the cards, the White House last week warned it would pursue tariffs on $50bn worth of Chinese imports, as well as impose restrictions on Chinese investments in the US and tighter export controls.
Mr Ross, who was preceded in Beijing last week by more than 50 US officials, is expected during the two-day visit to try to secure long-term purchases of US farm and energy commodities to help shrink the US trade deficit.
The US team also wants to secure greater intellectual property protection and an end to Chinese subsidies that have contributed to overproduction of steel and aluminum.
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Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
