Construction of pig farms and rapid restocking will ease tight pork supply from the fourth quarter, an official at China’s Ministry of Agriculture and Rural Affairs said on Monday, reported Reuters.

Stocks of productive sows have increased by 28.6% compared with the level in September 2019, official news agency Xinhua cited Yang Zhenhai, director of the animal husbandry and veterinary bureau under the ministry, as saying at a media briefing. Sow stocks last September had fallen by 39% from a year earlier, ministry data showed, after African swine fever killed off millions of pigs.

Since then, farmers have been trying to rebuild the herd. Sow stocks in 15 provinces have recovered to more than 85% of their 2017 levels, Yang said, while live pig inventories are at more than 80% of their 2017 levels in 13 provinces. Nationwide, live hog stocks are up 20.9% from January, he said.

Tight supply of pork will gradually ease after the third quarter, he added, with help from higher imports and an increase of more than 1.2 million tons of poultry meat.

The week saw lots of action, and the trend remains set in the direction of decoupling. There are now doubts over whether China will meet its purchase commitments of US goods under the “phase one” trade deal agreed earlier this year, and the signs are getting stronger that the US plans to ban the app TikTok, following in the footsteps of India last month. Statements by officials from both sides over the past few days have tended to indicate that, on one side, the Trump administration is determined to push through as much as possible of its China agenda ahead of the November election, while on the other, the Chinese leadership are determined to take every opportunity to demonstrate their determination to hold to their course, whatever the reaction is. We can expect more developments at an even a faster pace in the weeks ahead. 

The Shanghai stock market shot up this week, and the RMB hit its highest level since March largely on the basis of urgings in the state media to buy. The Shanghai stock has long been one of the world’s most disconnected from wider economic trends, but economic indicators are showing continuing signs of a China recovery from the virus hole, while the US falls deeper into the morass created by Mr Trump. With less than four months now to go to the presidential election, the odds that he will lose are getting stronger, and the prospect of that alone is unleashing changes in many aspects of the world. We still don’t know precisely how Biden’s team would deal with China, and there is a chance that it would swing back towards the Obama era general approach of a softer touch. But Biden has started to roll out specific policies, and definitive platform planks on foreign policy should be forthcoming pretty soon.

Meanwhile, Beijing announced it would accept a WHO team to visit China to assist in investigating the source of the virus. Who will produce a vaccine first? The race is on. Maybe the British?

Enjoy the weekend.

White House trade adviser Peter Navarro said on Monday that the trade deal with China is “over,” and he linked the breakdown in part to Washington’s anger over Beijing’s not sounding the alarm earlier about the coronavirus outbreak, reported Reuters.

“It’s over,” Navarro told Fox News in an interview when asked about the trade agreement. He said the “turning point” came when the United States learned about the spreading coronavirus only after a Chinese delegation had left Washington following the signing of the Phase 1 deal on Jan. 15.

“It was at a time when they had already sent hundreds of thousands of people to this country to spread that virus, and it was just minutes after wheels up when that plane took off that we began to hear about this pandemic,” Navarro said.

Trump on Thursday renewed his threat to cut ties with China, a day after his top diplomats held talks with Beijing and his trade representative said he did not consider decoupling the US and Chinese economies a viable option.

US exporters reported sales of 720,000 tonnes of soybeans to China, the US Department of Agriculture (USDA) said on Thursday, as active purchases by the world’s top soy importer continued for a second straight week, reported Reuters.

The USDA confirmed the sales after reporting that weekly US soybean export sales last week were the largest in at least 16 months, with the majority slated for shipment to China or undisclosed destinations widely believed to be China.

China has been ramping up US soybean purchases as supplies in Brazil, China’s top soy supplier, are tightening and Brazil’s strengthening currency has driven up prices.

China also vowed in a Phase 1 trade deal signed in January to dramatically increase purchases of US farm goods. But sales of key commodities like soybeans, America’s biggest agricultural export by value, remain well below levels before the US-China trade war that began in 2018.

The week was dominated by the protests in the US, played up on China media to compare with similar protests in other places and in other eras. But some incidents of looting, the demonstrations and the Trump reaction pointed to an ever-greater likelihood of him losing in November. Silver linings appear from strange places. Biden is now well ahead in the polls and there is a prospect of Team Biden taking the full trifecta, including the Senate. This has huge implications for not only the US-China relationship but also for the US-world relationship, and the China-world relationship. 

Meanwhile, the virus is marching on, and the full force of the economic impact has yet to be felt. China’s economy is coming back, and Beijing is reported to be pouring money into the private sector to key unemployment in check. This is going to be the toughest year for Chinese school and college graduates in a very long time. Exports and consumer demand continue to be very weak. People are saving rather than spending. The massive property group Vanke announced it was going to do a share listing in Shanghai to raise funds to meet foreign debt obligations amounting to $1 billion, which is not a good sign. But the overall poverty eradication goals, due to be met this year, will be declared as having been met. When China will open its borders again is an increasingly important question. A special flight arrived last Friday from Germany carrying engineers needed to maintain production at factories in China. But for others? Who knows? August, maybe?

The US-China relationship became even more rocky, with Hong Kong and Huawei being among the top irritants. But there are indications both sides have decided to agree that the first phase trade deal will remain in place, with China placing at least some orders for US agricultural products in spite of rhetorical battles raging alongside. There were signs of the financial relationship also heading for a ruction – and HSBC was amazingly thrust into the decoupling headlights. How that makes sense for Those in Command is difficult to fathom, but there it was, an ultimatum, which presumably will have short-term and long-term implications. But is either side in a position to try a financial nuclear option? Unlikely. Nevertheless, the decoupling continues apace, with consequences that can only be guessed at. This year of surprises has more in store for us yet.

Have a good weekend.