The Week Ahead in International Trade: Xi in China, global elections and rate calls

Tue 7 May 2024
Posted by: Danielle Keen

Amid acrimony over China’s production capacity, the country’s president, Xi Jinping, will be touring Europe this week, speaking to EU members on trade and Russia’s war in Ukraine. It’s also a significant week for elections, with votes from Central America and Eastern Europe being cast and counted.

Xi in Europe

This week, Xi Jinping is visiting Europe for the first time in five years. He touched down in France over the weekend to discuss ongoing subsidy disputes with EU Commission president Ursula von der Leyen.

“We will defend our companies, we will defend our economies,” Von der Leyen said after a meeting in which she warned European industry was being harmed by China’s “surplus production”.

The EU has brought subsidy investigations against China’s electric vehicle (EV) industry, raiding several European plants last week, and initiating probes into Chinese solar and wind turbine exports.

On a more cordial note, French president Emmanual Macron presented Xi with brandy as thanks for not progressing anti-dumping measures on the popular French export. He also welcomed the Chinese leader’s commitment to avoiding the export of dual-use products with potential military applications to Russia.

Xi stated that Beijing opposes the scrutiny under which Russia’s war in Ukraine has placed China, objecting to “this crisis being used to throw responsibilities on to a third-party country, and as incitement for a new cold war”.

It’s notable that additional stops on his European tour include Russian allies: Serbia today (7 May) and Hungary tomorrow (8 May).

Election year rolls on

Amid this bumper year for elections, this week will be especially busy, with ballots cast in four countries.

Yesterday (6 May) saw a Panamanian president elected, as former minister José Raúl Mulino emerged victorious. A stand-in for convicted incumbent Ricardo Martinelli, who campaigned vociferously for his proxy from Panama’s Nicaraguan embassy, Mulino will be grappling with issues including the historic drought that has hampered shipping through the Panama Canal, as well as retaining control of the country’s lucrative Cobre mine.

Later this week, North Macedonia will go to the polls for its parliamentary elections and run-offs will take place for the presidency, in which Gordana Siljanovska-Davkova looks likely to emerge as the country’s first female president.

Staying in Europe, Lithuania’s presidential elections will also be held on Sunday (12 May), while votes are being counted in Chad following yesterday’s presidential elections. Mahamat Idriss Déby, the former president’s son and a senior military leader, is expected to win.

UK stats releases

A significant week of economic data releases, with the Bank of England set to decide on UK interest rates on Thursday (9 May). This follows last week’s disappointing forecast from the OECD, in which the UK was predicted to experience the slowest growth among G7 nations – something attributed by chancellor Jeremy Hunt to attempts to curb inflation.

While the OECD predicted UK rates could reasonably fall to 3.75% by Autumn – from their current 16-year high of 5.25% – there’s a general expectation that they won’t budge this time round following the US’ decision to hold firm.

However, among the Monetary Policy Committee that makes the decision, some members have already voted for a rate reduction in recent months, while governor Andrew Bailey said that he found recent falling inflation figures “encouraging” and that cuts were “in play”.

Other dates in the diary

Tuesday – SMMT car sales figures

Wednesday – Biden administration due to report on Israeli use of US-made weapons

Thursday – Bank of England’s interest rate-setting decision

Friday – UK overseas trade statistics

Saturday – World Fair Trade Day

Sunday – Lithuanian presidential election and Catalonian regional elections in Spain