A meeting between Chinese President Xi Jinping and U.S. President Donald Trump at the G20 summit this weekend will be eagerly watched in China for any signs of a let-up in the trade war between the two countries.
China’s currency, the yuan, has weakened on global currency markets to its lowest value since 2015. Trade tensions are to blame, as well as a divergence in monetary policy between Beijing and the U.S. with rising American interest rates and a credit loosening by Beijing to reinvigorate the economy.
Without a G20 bounce, the yuan looks headed to a psychologically important CNY 7.00 to the U.S. dollar. The yuan is currently CNY 6.94 to the dollar, compared to CNY 6.26 to the dollar in April. A stronger yuan has proven a boon for seafood importers in China, while a weaker currency helps Chinese seafood exporters who settle most international trades in U.S. dollars.
Meanwhile, China’s large distant-water fishing fleet has been warned to be on best behavior for this weekend’s meeting of the G20 in Argentina. In an extraordinary move, the country’s Ministry of Agriculture has sent a missive to all fishery companies operating in the Atlantic warning them to stay three nautical miles away from the exclusive economic zone of the summit’s host country. Many Chinese vessels operate just outside of Argentina’s territorial waters, fishing for squid in particular.
China has to “preserve an image of a responsible large power fishing nation,” warned the ministry’s letter, which also called on the national Distant Water Fisheries Association to make “unceasing efforts to monitor every ship’s position” during the G20 meeting.
The communication demonstrates how closely government agencies can monitor and direct China’s distant-water fleet. Several of the leading fishing firms active in Argentinean waters are state-owned.
The Ministry of Agriculture’s missive warns vessels and fishing companies not to evade inspections by local authorities, while “excessive law enforcement” should not be resisted violently but rather reported to the ministry of Association to be handled “through diplomatic channels.” The ministry, which administers licenses as well as fuel subsidies to the distant water fleet, said it will issue “heavy punishment” to any transgressors.
