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U.S. President Donald Trump and China's President Xi Jinping meet business leaders at the Great Hall of the People on November 9, 2017 in Beijing, China.

Thomas Peter-Pool | Getty Images

U.S. President Donald Trump and China’s President Xi Jinping meet business leaders at the Great Hall of the People on November 9, 2017 in Beijing, China.

China plans to set a lower economic growth target of 6 percent to 6.5 percent in 2019 compared with last year’s target of “around” 6.5 percent, policy sources told Reuters, as Beijing gears up to cope with higher U.S. tariffs and weakening domestic demand.

The proposed target, to be unveiled at the annual parliamentary session in March, was endorsed by top leaders at the annual closed-door Central Economic Work Conference in mid-December, according to four sources with knowledge of the meeting’s outcome.

Data later this month is expected to show the Chinese economy grew around 6.6 percent in 2018 — the weakest since 1990. Analysts are forecasting a further loss of momentum this year before policy support steps begin to kick in.

“It’s very difficult for growth to exceed 6.5 percent (this year), and there could be trouble if growth dips below 6 percent,” said one source who requested anonymity due to the sensitivity of the matter.

As the world’s second-largest economy loses steam, China’s top leaders are closely watching employment levels as factories could be forced to shed workers amid a trade war with the United States, despite a more resilient services sector, policy insiders said.

Growth of about 6.2 percent is needed in the next two years to meet the ruling Communist Party’s longstanding goal of doubling gross domestic product and incomes in the decade to 2020, and to turn China into a “modestly prosperous” nation.

“Considering employment, income and stability, we need growth of at least 6 percent this year,” said one of the sources.

Adopting a range as a target would give policymakers room to maneuver amid uncertainties caused by a tit-for-tat tariff war with the United States, as the two sides strive for a possible deal to settle their differences before March.

The government plans to maintain a 3 percent consumer inflation target for 2019 despite a recent softening in price rises, leaving some space for the government to stimulate weaker consumption.

Data this week showed China’s consumer inflation eased to 1.9 percent in December from 2.2 percent in November, below the government’s full-year target.

The State Council Information Office did not immediately respond to a Reuters request for comment.

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US allies defy Washington’s please to ban Huawei



But its not just Germany that is defying the U.S. Italy’s government has said that it won’t ban Huawei from its telecommunications industry, saying there is no proof of any security threat.

And in the United Kingdom, intelligence officials said that any risks posed by Huawei can be mitigated, according to an FT report in February. Even individual carriers have expressed their concern over excluding Huawei from the 5G rollout. U.K.-headquartered carrier Vodafone said banning Huawei could cost it millions of pounds and slow the rollout of 5G.

Experts say that while the American rollout of 5G would not be affected by a Huawei ban, Europe could suffer. Nikhil Batra, senior telecommunications research manager at IDC said European carriers’ businesses have struggled compared to those in the U.S., so they want the cheapest possible deal for 5G equipment — something that Huawei can provide.

“When you look at the industry as small as network equipment providers, excluding Huawei will have a big impact on the industry. If I am going from three major vendors to two major vendors, competition decreases, prices will increase as a result. A lot of countries, including specific telcos, are looking at Huawei as a better-cost option,” Batra told CNBC on Thursday.

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Boeing confirms changes to the 737 Max’s software and training



Boeing says it is working on changes to the training and operation of its 737 Max plane that has suffered two major crashes within six months.

The U.S. plane maker is under huge pressure to satisfy regulators after the crash of Ethiopian Airlines Flight 302 on March 10, which killed all 157 people on board. Investigators have said there are “clear similarities” between that flight and a 737 Max crash in Indonesia in October that killed all 189 on board.

Boeing’s vice president for commercial plane marketing, Randy Tinseth, told a Bank of America Merrill Lynch conference in London on Thursday that he expected the Federal Aviation Administration (FAA) to certify updates to the jet’s flight control software, on board displays, flight manual and training.

“We have gone through steps such as working with it in a simulator, we flight tested the improvements and we are working with the FAA towards certification, and we believe that will happen in coming weeks,” said Tinseth.

Boeing’s chief salesman said data from the Ethiopian crash was still filtering through and it was still to draw full conclusions about the crash.

As investigations continue, the plane has been grounded by several jurisdictions around the world.

Crash investigators in both accidents are focusing on the plane’s stall-prevention system, known as the maneuvering characteristics augmentation system. It has been reported that the system may have forced the plane’s nose down following erroneous data from just one sensor.

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Fed this week ‘not reassuring,’ S&P 500 still in bear market



Wapner: Were you surprised by Fed’s dovish double-down on Wednesday?

Gundlach: I think you have to be. I predicted they would go from two hikes this year to 0.5, and everyone told me there was no way they would downgrade it that far. But they went even further!

And what the heck is that “1 hike in 2020” thing about? It seems almost desperate.

Fed has gone from “we got this” to “we’ll get back to you”. Not reassuring.

Wapner: Do you still think we’re in a bear market or has the Fed’s pivot (and double-down) changed the game?

Gundlach – Yes to bear market. In 2007 the Fed went from “biased to tighten” to an “emergency ease” in just a few weeks. The S&P celebrated with a push to essentially a double top over the ensuing several weeks.

This pivot from December’s hawkishness seems metaphorical to that period.

Fed says oil down is part of their motivation. Oil is up substantially from the December meeting.

Why won’t they give a reason for this that is at least factually correct?

Say Trump demanded it. Say you are worried about Europe, or China, or the yield curve, or retail sales, or GDP now.

But stop with the gaslighting.

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