US-China Trade Talks and American Strategy
The United States is shifting from military to economic warfare.
By George Friedman
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US-China Trade Talks and American Strategy
The United States is shifting from military to economic warfare.
By George Friedman
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Succession questions
Mario Draghi’s successor at the ECB has plenty to do
The ECB has come into its own, but 2019 will still be a momentous year
THE HEADQUARTERS of the European Central Bank (ECB) tower over the river Main. The institution has been equally imposing in the life of Europe’s monetary union. As its only policymaker, it rescued the euro from financial and sovereign-debt crises, and powered a recovery in 2015-17.
But it cannot rest on its laurels. This year promises to be one of high drama. Three of its six-strong executive board will depart, notably its president, Mario Draghi, and its chief economist, Peter Praet (see graphic). By the end of the year eight of the 19 national central-bank governors on its rate-setting body will have stepped down. The end of Mr Draghi’s eight-year tenure coincides with European elections and the top jobs in Brussels coming up for grabs. That makes the choice to replace him unusually political. Should their quest for the commission or council presidencies fail, the French or Germans could seek to put a compatriot—or in the Germans’ case another hawkish northerner—into the ECB job as a consolation prize.
All this could alter the course of monetary policy. Poor choices could mean blunders in dealing with a slowing economy or too-low inflation. The bank’s hard-won credibility as the guardian of the euro could come under threat.
The ECB was set up in 1998, a central bank without a fiscal counterpart. To soothe German fears that it would go too easy on inflation, it was based in Frankfurt and modelled on the Bundesbank. Its intellectual direction came from its chief economist, Otmar Issing, a former Bundesbank rate-setter. Like other central banks, it targeted inflation. But to appease the Germans, it also concerned itself with the rate of money-supply growth.
Two decades on, the Bundesbank’s influence has waned. The ECB focuses less on the money supply, after its link with inflation proved wildly unstable. Philip Lane, a doveish Irishman, takes over as chief economist in June. Neither the economic nor monetary-policy areas is overseen by a German staff member.
To see why the choice of successor for Mr Draghi is so important, consider what he has done—and left undone. Observers are gushing: one compares him to Cincinnatus, a loyal citizen who saved the Roman republic from invasion. His open-minded pursuit of price stability led to the use of unconventional tools such as quantitative easing (QE) to stave off deflation, despite northern members’ horror of monetising government debt. Like other central banks, the ECB has gained bank-supervision and macroprudential powers since the crisis.
Fittingly for a governor who sees communication as central to his role, his biggest policy intervention was uttered but not implemented. In 2012 he said he would do “whatever it takes” to save the euro, promising to buy unlimited amounts of government bonds if sovereigns hit trouble. The ECB’s communications compare well with those of other big central banks, says Marcel Fratzscher, a former staffer now at DIW, a think-tank. Recent policy shifts have caused remarkably little market volatility, unlike some by the Federal Reserve.
The next boss, though, will need to overhaul the bank’s monetary-policy strategy. Mr Draghi seems almost certain to depart having never raised interest rates; price pressures and inflation expectations, currently subdued, are likely still to be well below target. An economic slowdown kiboshed rate rises this year: on April 10th the bank promised to keep them on hold in 2019. They are already at rock-bottom levels, and the bank has bought €2.6trn ($3trn) of government bonds. Should the slowdown worsen, the new boss will have to find the firepower to reassure markets.
The ECB’s independence is a matter of international law. EU members must all agree to any changes to its mandate. But another risk defies any attempt to legislate: that of politicised appointments to its governing council. National central-bank governors are often picked for reasons of domestic politics. The march of populism across the continent complicates matters. Austria’s incoming central-bank boss has no monetary-policy experience and is reportedly linked to the FPö, a hard-right party. Italy’s populists want to “reboot” their central bank’s management.
Such appointments could exacerbate divisions among the governing council, which tend to be along national lines. It must set policy for the euro zone as a whole. But some members still play to domestic audiences. Take the decisions to announce outright monetary transactions (OMTs) that backed up Mr Draghi’s “whatever it takes” commitment, and to begin QE. Both were attacked by some northern central-bank governors and faced legal challenge in Germany. Jens Weidmann, the head of the Bundesbank and a possible successor to Mr Draghi, testified against OMTs.
One interpretation of a ruling on QE by the European Court of Justice in 2018 is that the ECB has room to raise self-imposed limits on the share of government bonds it can buy in each member country. But heightened national divisions would make it harder to build support in the governing council. It might not help that, according to the Eurobarometer poll, public trust in the bank is far below pre-crisis levels both in countries like Spain and Greece, where the ECB is regarded by some as partly to blame for austerity, and in Germany, no fan of low interest rates and bond-buying.
As the ECB gains powers, clashes with politicians become more likely. It now oversees large lenders, in which governments also take a keen interest. Last year, under pressure from the European Parliament, its supervisory arm toned down a plan to ask banks to make more provisions for non-performing loans. It also withdrew a request for new powers to centralise the regulation of clearing houses. Governments had sought to narrow their scope; the bank says that threatened its ability to conduct independent monetary policy.
The ECB keeps banking supervision and monetary policy quite separate. But the president will set the tone of its response to political pressure, argues Sir Paul Tucker, a former deputy governor of the Bank of England who has written a book on the power of central banks in democracies. And Mr Draghi’s successor will need great skill to nudge governments to speed up fiscal and banking reforms, he says, to avoid monetary policy being the only game in town.
That person will have to direct the bank’s efforts to return inflation to target, and perhaps deal with a recession, while balancing competing political interests. If its only functioning economic institution stumbles, so too will the euro zone.
Bruised Retailers Face More Pain
Retail stocks, already down on tariff worries, could be hit further this week as retailers begin reporting earnings
By Michael Wursthorn
Macy’s reports quarterly earnings this week. Like other retailers, it must decide how to respond to increased tariffs on goods from China. Photo: paul j. richards/Agence France-Presse/Getty Images
Shares of retailers, buffeted by rising trade tensions in recent sessions, face a key test this week when Macy’s Inc., M -0.87%▲ Walmart Inc. WMT +0.00%▲ and others begin reporting quarterly earnings.
The S&P 500 Retailing index fell another 3.2% Monday, extending last week’s 3% slide after President Trump pushed ahead with tariff increases on billions of dollars of Chinese imports. That outpaced the broader S&P 500’s 2.4% decline Monday, as shares of Macy’s, J.C. Penney Co. JCP -2.38%▲ , Best Buy Co. BBY +0.21%▲ and Ralph Lauren Corp. all fell more than 3%.
The slides could worsen later this week once retailers begin reporting earnings, analysts said.
Investors will want details on how merchants plan to absorb 25% tariffs on more than $40 billion of goods that are imported from China and directly purchased by U.S. consumers. Macy’s and Walmart are among the first to release results, with reports due Wednesday and Thursday, respectively.
The tariffs, which took effect Friday, hit clothing, luggage, handbags and furniture, among other consumer products. And retailers have few options: They can absorb the added costs themselves, spread them across their vendors or pass them on to customers.
None of those options is particularly attractive, analysts said, and retailers’ pain could signal broader implications for the U.S. economy. Initial estimates project the additional tariffs will shave 0.3% from U.S. growth this year.
Investors wrongfooted by downturn at emerging Asian economies
Some analysts expect the headwinds facing the region to last for some time
Jonathan Wheatley in London
Analysts expect the Indonesian central bank to join the rate-cutting club by the end of the year © Bloomberg
The engines of the world economy are sputtering. Last week the central banks of Malaysia and the Philippines cut their interest rates, to the surprise of many observers. Indonesia, which begins a two-day policy meeting on Wednesday, is expected to stay on hold. But, increasingly, analysts expect the central bank to join the rate-cutting club by the end of this year.
This is not what many investors expected from emerging Asia, often seen as one of the few parts of the world able to deliver solid and sustainable economic growth.
Capital Economics, a consultancy, blamed a “sharp slowdown” in Malaysian growth and “underwhelming” growth in the Philippines, along with benign inflation, for last week’s rate cuts. It said its proprietary growth tracker also pointed to a sharp slowdown in Indonesian output in the last quarter of 2018, and saw gross domestic product growth slowing further this year.
Adam Wolfe at Absolute Strategy Research, a consultancy, expects the headwinds facing the region’s economies to last for some time. “You still have significant drag from [negative] global export growth and we haven’t seen the bottom yet,” he said.
Widely followed data on world trade volumes from CPB of the Netherlands show that global exports, on a rolling three-month basis, began contracting in December and were down more than 2 per cent in February, the most recent month of data.
ASR’s proprietary leading indicator for Asia ex-Japan, meanwhile, has just turned negative for the first time in more than three years. Industrial production in the region, too, has taken a downward turn in recent months, to its lowest level in more than a decade.
Mr Wolfe says the semiconductor cycle is especially problematic, as the industry awaits the roll-out of 5G mobile internet technology. “Until semiconductor prices firm up and feed into the electronics supply chain, it is hard to see a pick-up in regional growth,” he said.
China’s economy has a dominant influence. Steel production there, Mr Wolfe notes, has been propping up economies in the rest of emerging Asia but has slowed significantly this year.
“If that were to turn over, it would point to further downside risk,” he said. Such concerns are fed by weak housing demand in China, and limits on the ability of Chinese local governments to raise finance for infrastructure investment, he added.
Others say fears of a regional downturn have been exaggerated. Sergi Lanau of the Institute of International Finance expects Chinese growth to stabilise around its current level and for other countries to keep up a healthy clip.
“Unless you think the world is really going to deglobalise and Asia won’t be central to the supply chain any more, I don’t see why that picture would change in the next four or five years,” he said.
Tales From The Casino, Part 1: Funds That Bet On Volatility Might SPIKE Volatility, Crashing The Markets
by John Rubino
Volatility Could Cause More Pain as Funds Betting on Quiet Sell Down Stocks
Recent swings in the stock market are threatening to unravel multibillion-dollar bets that rely on calm markets, potentially adding to investors’ jitters over the past week.
Computer-driven volatility-target funds generally scoop up riskier assets like stocks during calmer periods, hoping to gain as markets grind higher. When volatility hits, it sends them scrambling to sell their stocks and move into safer assets like Treasurys.
Asset managers like Vanguard Group and insurance companies run some of the bigger strategies of this type.
Because markets have been so quiet this year, with the exception of episodes like Tuesday’s trade-driven pullback, the funds are especially loaded up on stocks. That has left volatility-target funds carrying the highest level of exposure to U.S. stocks since the fall, a troubling sign for those who believe the funds exacerbated some of the market’s worst selloffs in 2018.
Volatility-targeting funds had an estimated 44% equity exposure Tuesday. That marked their highest level of equity exposure since early October, when they had a more-than 60% exposure to stocks, according to Pravit Chintawongvanich, an equity derivatives strategist at Wells Fargo Securities.
After stocks tumbled Tuesday, Mr. Chintawongvanich estimates those funds sold about $10 billion in stocks a day later, knocking their allocations down to 41%—still around their highs for the year.
“If the next spike [in volatility] is higher, then you’ll see a more extended downmarket and we’d remove equities. You can get easily whipsawed,” said Duy Nguyen, a portfolio manager and chief investment officer of Invesco Solutions, who helps manage these strategies.
That’s especially true because analysts estimate volatility-target funds manage as much as $400 billion in assets—giving them considerable heft in the stock market.
Critics argue that such funds, along with the growing prevalence of automated trading, have altered the market’s natural tendencies, from sharpening moves in the S&P 500 to fueling historic stretches of tranquility, like in 2017.
With dozens of volatility-targeting funds employing similar, but nuanced, automated approaches around insulating investors from the stock market’s shocks, they typically sell stocks simultaneously during the worst downdrafts, analysts said. The group’s equity allocations swung from 83% in late December 2017 to 21% in February following 2018’s initial selloff, according to Wells Fargo. Allocations rose again in subsequent months, hitting 67% in early October, prior to the market’s decline, and bottomed out at 16% in late December.
Those moves weren’t spread over a long period. Instead, funds sold most of those assets over a few trading sessions, making their impact on the market that much more apparent, analysts said. If Tuesday’s decline had been more severe, on the scale of a 3% pullback in the market, Wells Fargo estimates that volatility-targeting funds would’ve sold roughly $36 billion worth of stocks.
“You can see these funds moving together,” said Damian McIntyre, a portfolio manager at Federated Investors, who manages a volatility-targeting fund that is near the top of its equity-allocation range. “That can exacerbate any selloff.”
How to Fix the Federal Reserve
By Matthew C. Klein
The U.S. Federal Reserve building in Washington. Photograph by Win McNamee/Getty Images
The U.S. is now experiencing one of the most benign economic environments in decades. That better last, since it is unclear how effectively the Federal Reserve can respond to a future downturn.
Historically, the Fed has fought recessions by lowering real short-term interest rates at least five percentage points. It will probably not have that option next time. Today, the policy rate is just under 2.5% and unlikely to rise much further. A study published by Fed economists in January warned there is at least a 40% chance the central bank won’t be able to cut interest sufficiently in response to a downturn before the end of 2027.
This explains why America’s central bank is spending this year reviewing “the strategies, tools, and communication practices it uses to pursue its congressionally assigned mandate of maximum employment and price stability.” It is never too soon to prepare for future trouble.
As Fed Vice Chairman Richard Clarida explained in a speech on Tuesday, policy makers will try to answer three basic questions. First, should the Fed aim for 2% inflation each year, or should it “aim to reverse past misses of the inflation objective” so that prices rise by 2% a year on average? Second, does the Fed need to expand its “toolkit” to boost the economy? Finally, how should the Fed communicate to traders and the general public?
Clarida’s first question is motivated by the concern that persistent shortfalls have permanently altered people’s confidence in the Fed’s existing 2% inflation target. That sounds worrying, but in practice, the price index tracked by the Fed is so divorced from most Americans’ lived experience that small differences in measured inflation probably don’t matter much. Income growth matters far more, and incomes are only loosely related to consumer prices.
According to the Fed’s preferred measure of inflation, health-care costs are based on what doctors, hospitals, and pharmaceutical companies receive, not what consumers pay in premiums and deductibles. Most Americans own their own homes, but their housing costs are based on estimates of how much they would pay to rent their residences rather than their actual mortgage payments. The cost of bank accounts is imputed from the spread between what banks pay savers and what they earn at the Fed. These three categories account for nearly half of the Fed’s index. At the same time, the government’s estimates of the costs of manufactured goods, computer software, and internet services are all sensitive to judgments about quality improvements over time.
The answer to Clarida’s second question is clearly “yes.” The same Fed study warning about the risk of hitting the lower bound on interest rates also warns that none of the “unconventional policies” deployed since the crisis “meaningfully contains the sharp rise in the unemployment rate” in their recession simulations.
Before joining the Fed, Clarida had suggested capping long-term interest rates, which the Bank of Japan has been doing since 2016. Mike Konczal and J.W. Mason of the Roosevelt Institute argue the Fed should lend to state and local governments and give banks cheap funding in exchange for boosting credit supply. In addition to these options, the Fed could also lend directly to households and small businesses, depreciate the value of the U.S. dollar by buying foreign currency, and potentially purchase hard assets such as real estate and precious metals. (Many of these ideas would require tweaks to the Federal Reserve Act.)
As to Clarida’s last question, the Fed’s recent embrace of “transparency” has likely created at least as many problems as it has solved. Despite claiming that monetary policy works by setting expectations of future interest rates, Fed officials frequently complain that traders overreact to their projections. Stephen Morris of Princeton University and Hyun Song Shin, now the head of research at the Bank for International Settlements, warned about this problem shortly before the financial crisis and compared modern central bankers to Soviet planners whose interventions corrupted market signals.
Those are our thoughts. The Fed will publish its conclusions sometime in the first half of 2020. •
Rip-Roaring Chinese Exports Less Than They Appear
Investors shouldn’t read too much into stronger March data from China
By Nathaniel Taplin
The bounce back in Chinese exports in March may be due in part to the timing of the Lunar New Year holiday. Photo: Chinatopix /Associated Press
To everything there is a season – especially in China.
Friday’s very strong March export figure, up 14% on the year after falling 20% in February, wasn’t exactly a surprise. Much ink was spilled on very weak Chinese exports and industrial profits in February, so expect more on this big export rebound.
Yet all the figures were heavily distorted by last year’s Lunar New Year holiday, which came on Feb. 16, the second latest in a decade. The timing of the weeklong holiday in 2018 meant a strong February and a weak March for China last year. In 2019, the Year of the Pig, investors should be expecting the opposite, and not read too much into it.
Public Policy
Is the Fed’s Independence on the Line?
Wharton and other experts discuss the risks posed by the most recent nominees to the Federal Reserve Board.
President Trump’s choice of Herman Cain, a businessman, and economist Stephen Moore as his nominees for the Federal Reserve Board is raising questions about White House’s attempts to influence central bank policy.
Cain is a business executive who is best known for his aborted bid for the Republican presidential nomination in the 2012 election and as the former CEO of Italian fast-casual restaurant chain Godfather’s Pizza. He also served on the Federal Reserve Bank of Kansas City in alternating roles as chairman and deputy chairman between 1995 and 1996. Moore is an economic commentator who was an adviser to the 2016 Trump campaign and the 2012 Herman Cain campaign. He has also worked as chief economist at The Heritage Foundation, a conservative think tank, and on the editorial board of The Wall Street Journal.
“There is a constitutional duty the president has that should be respected, and that is … a very important role in shaping policy, including that at the central bank,” said Peter Conti-Brown, Wharton professor of legal studies and business ethics. The president can nominate candidates to the Board of Governors, which are confirmed by the Senate. Thus far, Trump has made “stellar appointments” to the Federal Reserve, he said, noting that four of his six nominations have been approved.
However, the Cain and Moore nominations are “very different,” Conti-Brown continued. “President Trump is now abandoning what has been a bipartisan consensus stretching back at least 40 years that says although Democrats and Republicans will appoint different kinds of central bankers, they come with a baseline of competence and experience where they’re not going to prize partisan loyalty over the work of central banking. Stephen Moore and Herman Cain do not fit that historical consensus.” The two nominations represent “a big departure even for President Trump,” he added. “The Senate Republicans and the Senate Democrats need to rally together and vet these candidates and reject them.”
If Cain and Moore were to become Fed governors, “they could poison the conversation,” said Lisa D. Cook, associate professor of economics and international relations at Michigan State University. She noted that Moore has called for the elimination of the Commerce Department as well as the Bureau of Labor Statistics, which is problematic because “for a sophisticated, multitrillion-dollar and very advanced economy like ours, we need all the information we can get.”
Dire Scenarios
“I’m pretty sure these nominees, if they get officially nominated, would do what [Trump] wants on interest rates — particularly Moore, who has said as much,” noted David Zaring, Wharton professor of legal studies and business ethics, in a separate interview. “Cain has in the past advocated a return to the gold standard, so he might not be as enthusiastic about low interest rates as is the president.”
Wharton finance professor Krista Schwarz is worried about “repeated public interference” in the Fed’s setting of monetary policy, which she said is unprecedented. “The current nominees threaten the nonpartisan nature of the Federal Reserve.”
The seven members of the Board of Governors of the Federal Reserve System are nominated by the president and confirmed by the Senate. They sit on the 12-member Federal Open Market Committee (FOMC) along with five other members, who are presidents of Federal Reserve Banks.
Conti-Brown pointed to “a litmus test” in 2021, when current Fed chair Jerome Powell’s term ends, after which he could be nominated for a second term or replaced. He said that Trump or another president could push to have “a loyalist” in that role. “This idea of rigor in the personnel that are appointed at the Fed is the heart of Fed independence,” he said. “It’s very fragile. It’s very important. For the Republicans, this is the line in the sand they need to draw.”
Conti-Brown appreciated that Cain had been a CEO and served at the Kansas City Fed as well. However, what is “disqualifying” about Cain is that the central bank ideology differs from a partisan ideology, he said. Moore lacks Cain’s experience, and “he’s unequivocally not a good nominee,” he added. “Congress designed the Fed so that partisans can’t use them for electoral ends. And that’s the thing we have to preserve.”
Risks of Doubting Data
When she was a staff economist in the Obama Administration’s Council of Economic Advisers, Cook said she saw Moore, Trump and Cain questioning the Bureau of Labor Statistics and its unemployment data. “I was incensed,” she said. The BLS has “professional, nonpartisan, and very hardworking economists who … are free from political persuasion,” she said. “You can imagine [what could happen] if they’re not protected. A fundamental disbelief in this independent agency producing independent data … mars how the data will be interpreted.”
The risks involved in suspecting the quality of the data while making decisions at the Fed could also have consequences globally. “The Fed’s influence in the world is profound,” said Conti-Brown.
Cook agreed. “In terms of fundamental decision making and using the kind of data that would, say, stem the flow of a financial crisis, that would be bad not just for the U.S. but for the rest of the world.”
The Case for Independence
Schwarz explained why she believes the Fed needs to be run in a nonpartisan fashion. “The credibility of the Federal Reserve, which stems from its apolitical policy approach, strengthens the transmission mechanism of monetary policy and thus its effectiveness,” she said. “Credibility takes a long time to build, but can be quickly destroyed. It is not in either political party’s interest to put this in jeopardy.”
To be sure, the Fed has routinely faced political pressures, said Conti-Brown, who is also a financial historian and author of the 2016 book The Power and Independence of the Federal Reserve. “The Fed is a political institution, but it’s not a partisan institution, and it is indeed influenced by a political process,” he added.
However, previous administration insiders who went on to take up top jobs at the Fed, such as Ben Bernanke (Fed chair, 2006-2014) and Alan Blinder (Fed vice chair, 1994-1996) were experts on economic issues who also shielded their roles at the Fed from partisan politics, Conti-Brown noted. “A baseline of competence, experience and expertise disciplined both Blinder and Bernanke to say, ‘We’re not going to put this midterm or presidential election at the forefront of our monetary policy.’
“A partisan is only asking the question: ‘Is this good for us or bad for us in the next election?’” Conti-Brown continued. “A central banker has to ask the opposite question, which is: ‘Forget elections. Is this good or bad for America?’ Moore and Cain lack that baseline competence to be able to say, ‘the partisan noise is noise. Let’s focus on the short-, medium- and long-term economic effects of these policies for America as a whole.’”
Schwarz said no clear solution exists to insulate the central bank from partisan politics in the U.S. or elsewhere globally. “In many situations, the central bank is the only part of the government that is capable of responding quickly to crises,” she noted. “This puts them in the crosshairs of populist politicians.”
At the same time, there are “many degrees of political meddling,” Schwarz added. “Appointing two unconventional nominees to the Board is probably something that the Federal Reserve System can accommodate, even if it introduces a temporary partisan tone to the policy process.
But, if Trump were then to attempt to fire Powell and replace him with one of his nominees, that would be much worse, and could have a lasting impact on the market’s confidence in the institution.”
Not All the President’s Men
Trump has often stirred controversy in his comments about Fed policy. For example, just last week, he urged the Fed to lower interest rates. “I think they really slowed us down. There’s no inflation. I would say, in terms of quantitative tightening, it should actually now be quantitative easing.”
According to Conti-Brown, Trump’s utterances are hurting the Fed, whether or not it heeds him. “President Trump should never have been making these kinds of noises and criticisms because … the narrative is now about the Fed reacting to the president, and that in itself undermines the Fed’s credibility,” he added. “When you heap political loyalists on top of that pile, then the narrative starts to get shaped in that way because for at least two members of the 12 members voting on the Federal Open Market Committee, that is the lens through which they see the world.”
The ideology of a central banker is one of empiricism and uncertainty, Conti-Brown observed. “A partisan does not truck in uncertainty. The world is always clear — ‘We’re always right, our opponents are always wrong,’ and they don’t deal with nuance.”
Cook noted that notwithstanding Trump’s push for lower interest rates, Powell and others on the FOMC are asking “serious intellectual and scholarly questions” on interpreting economic data before making their decisions. “I don’t think that they are bowing to the pressure of the president. Jay Powell has been somewhat defiant, and that’s a good thing.”
Protecting a Tradition
The longstanding tradition that has preserved Fed independence would be at risk if these two candidates were nominated and then appointed, said Cook. “This could threaten the [Federal Reserve’s] dual mandate of maximizing employment and growth.”
According to Zaring, Trump has “broken with a number of traditions that help to guarantee” central bank independence. “He’s hectored the Fed, had board members to dinner at the White House, and now mused about making these pretty political appointments. I’m not worried yet — the Fed should be able to take a little criticism, the board should absolutely talk to the White House and President Trump’s previous Fed appointments have been beyond reproach.”
What are the likely scenarios? Schwarz expects Cain and Moore to face pushback at confirmation hearings. Zaring predicted that they either will not get nominated, or if they do, they will be confirmed only by voting along party lines. Already, three Republican senators have said they won’t back Cain, and a fourth in opposition “would sink a nomination,” Bloomberg reported.
China’s Auto Market Will Be Hard to Jumpstart
Investors counting on Beijing to reverse the slide in Chinese car sales may be disappointed
By Jacky Wong