COLUMN-U.S.-China trade pendulum swings toward Beijing; commodities key – by Clyde Russell (Reuters U.S. – December 3, 2019)

LAUNCESTON, Australia, Dec 3 (Reuters) – Since U.S. President Donald Trump launched his trade dispute with China one of the best questions to ask in order to assess the current state of the process is who, right now, is more desperate to do a deal.

For most of 18 months or so since the tit-for-tat tariffs began the conventional thinking has been Beijing is more keen to finalise an agreement, given the obvious slowing of growth in the world’s second-biggest economy.

However, the abrupt swing in the Purchasing Managers’ Indexes for both China and the United States, coupled with mounting domestic political pressure on Trump as he heads into his re-election campaign, may have altered the dynamic.

China’s official PMI unexpectedly returned to positive territory in November, rising to 50.2, the highest since March and moving above the 50-point level that separates expansion from contraction.

However, the U.S. PMI went the other way, staying in negative territory for a fourth month, slipping to 48.1 in November, down from 48.3 in October. Of course, one month’s recovery in the Chinese PMI doesn’t yet confirm that the worst is past, but it perhaps does show that the stimulus Beijing has injected into the economy in the form of monetary loosening and infrastructure spending may be starting to filter through to real activity.

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