When shock tactics are used too often, they cease to have a shock effect. While President Trump’s tactics are certainly distracting and overwhelming the daily news cycle, their longer-term impact is dulled. It is easy to recognise these are rather unsophisticated bargaining methods that may work well in real estate but are less effective when applied internationally to friends and foes alike.
However, that is not to deny the ongoing irritation that it inflicts on business. Among the petty nuisances are the suspension and then lifting of the duty-free de minimis treatment for products with country of origin from China and Hong Kong.
This covers goods imported from China and Hong Kong into Singapore and then re-shipped to the US as a customer order. This may be apparel or textiles made in China sent by a Singapore company to fill a US customer order.
To avoid unnecessary delays in this confusing environment, many logistics companies strongly recommend that customers who ship products with country of origin from China and Hong Kong provide the 10-digit HS code and the Manufacturer Identification Code (MID) for eligible shipments.
For companies shipping to the US, it is recommended they provide the 10-digit HS code for all products with country of origin from China and Hong Kong, regardless of where shipments are made. It is wise to ensure that even shipments below US$800 ($1,083) containing textile and apparel products have an MID. All other commodities below US$800 do not need MID.
See also: China’s Two Sessions set development directions
It is recommended that customers provide the US taxpayer ID of the recipient or consignee if it needs to be paid by the recipient.
For the US, the real battlefield of trade remains focused on stopping China’s advances, although tariffs will do little to achieve this. In recent months, we have seen China launch a satellite network to rival Starlink and an artificial intelligence (AI) model that has its Western counterparts very worried.
China introduced a high-speed maglev train capable of reaching speeds up to 700 km/h, which puts China at the forefront of high-speed rail technology.
See also: The wind beneath China’s wings — new productive forces
Chinese scientists achieved a new milestone with their “artificial sun” project, bringing the world closer to sustainable nuclear fusion energy, which is the ultimate expression of clean and green.
Additionally, the Chinese tested the A2A hypersonic missile travelling at speeds exceeding Mach 5. This comes alongside a sixth-generation hypersonic jet with unprecedented speed and manoeuvrability. The Chinese navy commissioned its largest amphibious assault ship to date. This vessel is designed to support a range of operations, from humanitarian assistance to amphibious combat missions.
These advanced achievements are indicative of growing economic strength which continues to offer new types of business opportunities in China. Trump’s tariff war is unlikely to halt this progress.
However, irritating trade impediments will continue beneath the tariff bluster, so the challenge is to ride these out by finding new markets, adopting advanced products that improve lifestyle and productivity and ignore the bluster of daily “shocks” that are coming from the West.
Technical outlook of the Shanghai market
The rebound from support in the Shanghai Index is developing into a genuine trend breakout. This is a slow and steady rise, which is stable and sustainable. There is a low degree of volatility as the market moves smoothly in the uptrend.
The Guppy Multiple Moving Average (GMMA) relationships are the best guide to trend development.
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The long-term group of averages shown in red have compressed and are turning up. This shows that investors have stopped selling and are now coming into the market as buyers. The compression shows that many investors think the current market condition shows a combination of correct pricing and good value.
Inevitably, there are investors who see a stronger opportunity and their increased buying to outbid competitors means the long-term group will begin to expand. This expansion shows strong investor buying, which is essential for any sustainable uptrend.
The short-term group of averages provides an idea of how short-term traders are thinking. They always lead trend changes because they are more aggressive in their approach to the market. The short-term group has already compressed, moved upwards, and is expanding. This shows increasing confidence in the market.
The lower edge of the short-term GMMA is moving above the upper edge of the long-term GMMA. This is bullish. A completed move above the long-term GMMA is usually a signal of trend strength and continuity.
The moving average crossover is not important. What is important is the behaviour and character of the two groups of moving averages because they show the level of confidence in the developing trend.
The GMMA tells us about the behaviour of the market. Support and resistance and trend line analysis provide the structure of the market and help set index objectives.
The Shanghai Index has the first significant barrier to a rising trend at the value of the old uptrend line. This now acts as a resistance feature. Moving above that, the next resistance level is the value of the upper edge of the trading band.
This is a bullish breakout environment.
Daryl Guppy is an international financial technical analysis expert. He has provided weekly Shanghai Index analysis for mainland Chinese media for two decades. Guppy appears regularly on CNBC Asia and is known as “The Chart Man”. He is a former national board member of the Australia China Business Council
