Giant pandas arrive in US after Trump-Xi summit: What is China’s ‘panda diplomacy’?
Two giant pandas sent by China arrived at Zoo Atlanta, reviving Beijing’s ‘panda diplomacy’ — using the animals as symbols of friendship and soft power. From diplomatic gifts to long-term loans, pandas have played a role in China’s ties with countries including the US.
Shanghai, China saw the yuan slip against the dollar on Monday, as growing economic imbalances emerged in the backdrop of President Xi Jinping's visit to Washington. Despite this, analysts remain optimistic about the yuan's long-term strength, primarily driven by robust Chinese exports. The yuan has been appreciating steadily, though at a slower pace, due to potential higher U.S. interest rates boosting the dollar's allure.
Huatai Futures, a market analyst, noted that following the meeting between Chinese and U.S. leaders, trade and geopolitical factors have taken a backseat for now. The onshore yuan ended Monday's trading session at 6.7142 per dollar, a 0.03% decline from the previous day's close. Simultaneously, the dollar index edged up to 101.09, inching closer to a two-month peak.
The United States and China reached an agreement to reduce tariffs on $30 billion of goods each, and initiated discussions on artificial intelligence. COFCO Futures, another brokerage, anticipated that the tariff reduction would help maintain China's strong export momentum, keeping the yuan stable in the fourth quarter. However, they cautioned about the risks of a widening US-China yield spread and shifts in external demand.
The dollar's rise can be attributed to rising interest rates and inflation expectations, which provide additional support. While the yuan has become less responsive to dollar strength, the prospect of rising U.S. Treasury yields could dampen its appreciation further. On Thursday, the People's Bank of China aimed to stabilize market expectations, warning against market herd behavior. The central bank had set the yuan's midpoint at 6.7399 per dollar, the strongest level since February 3, 2023.
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