China and France signed contracts totalling £11.65 billion during a visit by President Emmanuel Macron, according to an official Chinese briefing. Deals in aeronautics, energy and agriculture, including approval for 20 French companies to export poultry, beef and pork to China were agreed yesterday. The two countries also agreed on the cost and location of a nuclear fuel reprocessing facility to be built by the end of January 2020. France has also enjoyed a fast job growth boosting support for President Macron’s reforms. Following trade pressure from the United States, China and the EU are now more inclined to collaborate as the deal follows an agreement to protect 100 European regional food names, known as geographical indications (GI), in China and 100 Chinese geographical indications in the EU. The deal will include protecting the name of products such as Irish whiskey and prosciutto di Parma, as well as China’s Pixian bean paste, Anji white tea and Panjin rice. The deal significantly expands the number of GIs from the 10 products agreed in 2012 and should help boost trade in higher value goods. EU agri-food exports to China were worth €12.8 billion in the year from September 2018 to August 2019. China has also won support for its Huawei technology firm in Hungary to build its wireless networks.
Small British manufacturing firms are their most pessimistic since just after the Brexit referendum in 2016 according to a survey by the Confederation of British Industry (CBI). Optimism for small and medium-sized manufacturers fell to -32 from the previous -28, in the three months to the end of October. Companies reported weak new orders - especially from clients in Britain - and little inclination to raise investment spending. Britain’s economy shrank in the second quarter of 2019 but showed some growth in the third quarter of 2019, thus expected to have avoided a recession. As well as Brexit, British manufacturers are facing up to a slowdown in the global economy caused by trade tensions between the United States and China. The CBI’s data showed almost two-thirds of the 240 companies surveyed cited political or economic conditions abroad as likely to limit export orders.
German industrial orders rose more than expected in September offering some hope for manufacturers in Europe’s biggest economy. Germany’s export-reliant manufacturers have been suffering from a slowing world trade and political uncertainty. Contracts rose 1.3% from the previous month, helped by an increase in both domestic and foreign demand. The economy shrank by 0.1% in the second quarter and recent data have pointed to continued weakness in the third quarter, which could put Germany in recession. Domestic orders rose by 1.6% while contracts from abroad were up 1.1% but those from the euro zone were 1.8% lower. Meanwhile the leader of the Christian Democratic Party expected to succeed Angela Merkel is facing increasing opposition within the party following a number of gaffes and poor election results which might lead to a leadership challenge before she takes over.
Oil prices fell after a strong start of the week pulled down by a larger-than-expected build in U.S. crude stocks. Brent crude was at $62.58 a barrel down 38 cents. U.S. West Texas Intermediate fell 30 cents to $56.93 per barrel, having closed up 1.2% in the previous session. U.S. crude inventories rose by 4.3 million barrels in the week ended Nov. 1 to 440.5 million barrels, according to the American Petroleum Institute, almost three times higher than what was expected by analysts. Official data from the Energy Information Administration is due later today. OPEC and its partners, including Russia, will meet in early December to review output policy.