Trump/Biden/Kissinger and Xi on China

[Randy W]

from the NY Times

 

 

Before Talks With Trump, Xi Promotes His Image as a Leader With Friends

 

 

 

 

By the time China’s leader, Xi Jinping, sees President Trump on Saturday, he will already have met with the leaders of Russia, India, Japan and some African nations, appearances the Chinese choreographed to portray Mr. Xi as a man of the world with enough friends to offset the animosity of the United States.

That depiction of Mr. Xi as the leader of a great power at the Group of 20 meeting is important for his home audience in the face of slowing economic growth. The meeting with Mr. Trump is expected to produce little more than a fragile truce in the trade conflict, and probably the start of a new round of talks, so Mr. Xi needs to be shown as pursuing a bigger agenda, Chinese and Western analysts said.

. . .

From Mr. Xi’s viewpoint, the best outcome of the encounter with Mr. Trump would be to slow-walk negotiations for the next 18 months, said David Lampton, a fellow at Stanford University’s Asia-Pacific Research Center. “The point for Xi is: don’t be seen to lose, weaken Trump’s support with other countries and his domestic base.”

 

 

[Randy W]

from the SCMP

 

US-China trade war: ignore the hype, Trump and Xi are no closer to a deal, even if they are ‘friends’

• Neither leader has agreed to anything more than they had previously
• The lack of a deadline to negotiate the final ‘10 per cent’ of sticking points betrays a lack of confidence that doing so is even possible

 

 

Neither leader has agreed to anything more than they had previously, despite their agreement to return to the bargaining table. That says only that negotiators will continue to confront the same tough issues that derailed negotiations two months ago.

Trump has said “in any event, China wants a deal”. But he has also ignored US interests in his desire to secure a deal. His surprising unilateral decision to partially reverse the block on Huawei may prove his eagerness, despite his decision receiving bipartisan opposition domestically over the threat posed by the Chinese telecoms giant.

 

. . .

 

The talks are said to be focused on the overhaul of China’s party-led state capitalism. But negotiators have not been able to agree on the critical structural problems, including the role of state-owned enterprises and state-subsidised industrial policies such as “made in China 2025”; as well as the party’s tight grip on economic activities, which is related to politics, ideology and the legitimacy of communist rule. This is what the US means when Trump described his hoped-for agreement as “the largest ever deal made of any kind, not only trade”.

 

[Randy W]

Another potential weapon for China to use

 

Will Macau casinos be targeted in US-China trade war? The odds are shortening for Sheldon Adelson, Trump’s ‘Patron-in-Chief’

• American casino licences may be brought into play as trade tensions worsen
• Even if they are not revoked, there are other ways Beijing can squeeze them

 

 

 

How will the US-China trade war affect American casino licences in Macau?

That thought has kept gnawing away at the back of the minds of investors and analysts ever since trade tensions started a little more than a year ago.

Initially, they did not appear overly worried as the majority view was that the trade war would not go on much longer and American casino operators played an important role in Macau’s thriving development.

Since last month, such upbeat assessments have started to sour. The odds are getting shorter that American casino licences will be brought into play, not least because one of the owners is the biggest political donor to US President Donald Trump and reportedly carries extraordinary influence with him.

. . .

Since 2002 when the Macau government ended Stanley Ho’s monopoly and gave three American operators the casino concessions, Macau’s gaming industry has changed dramatically.

The three American operators, Sands China, Wynn Macau, and MGM China (a joint venture with Stanley Ho’s daughter, Pansy Ho), are estimated to account for about 60 per cent of Macau’s US$37.6 billion market. Gambling revenue in Macau is estimated to be six or seven times that of Las Vegas.

All their concessions, along with those of three Macau and Hong Kong operators, will expire in June 2022, and the local government has already said it is “actively working” on terms for a new licensing system for the casinos.

More importantly, Sands China is owned by Sheldon Adelson, chairman and majority shareholder of the world’s largest casino operator, Las Vegas Sands.

 

 

[amberjack1234]

I don't gamble so that won't bother me. Well, I guess that I lied there a little bit the stock market is nothing but gambling.

[Randy W]

from the SCMP

 

China’s ‘weaponised’ yuan, report of suspended US farm purchases create grim outlook for trade talks

• Beijing allowed the yuan to weaken beyond the political significant exchange rate of 7 to the US dollar on Monday morning
• China has also reportedly cancelled orders for US farm products in response to Donald Trump’s threat of increased tariffs on Chinese goods

 

 

 

The abrupt weakness of the yuan underlined China’s ability to allow the yuan to depreciate to offset the effect of higher US tariffs after Trump threatened on Friday to impose a 10 per cent levy on US$300 billion of Chinese imports from the start of September.

The move raises the prospect of a currency war, dimming hopes for the world’s two largest economies to continue talks which resumed in Shanghai last week. Earlier, it was reported that China had cancelled orders for farm products from the United States having vowed on Friday to make necessary countermeasures against the threat of tariffs.

 

 

[Allon]

The exchange rate and the giving away of trade secrets are the two biggest issues where the market cannot compete to settle differences. And the exchange rate directly affects the citizens of China who are already being hit with rising prices otherwise. I think the ugly word "deflation" will be coming up soon, at least in China.

[Randy W]

from the Asian Review

 

China's power struggle lies behind global market turmoil

Xi's inability to convene long-delayed economic meeting at heart of uncertainty

 

 

 

To many, Trump and his many flip-flops on policy are the primary cause of the global market turmoil. But this reading misses the forest for the trees.

"Most people do not understand the true nature of this phenomenon," a Chinese source involved in economic policy said. "What is happening now is based on the tug of war in Chinese politics that has continued for the past year and a half."

. . .

No progress has been made since early May, when China slashed the draft text of a trade deal compiled during five months of talks from 150 pages to 105 and sent it back to the U.S.

The crux of the matter, one Chinese political researcher said, is that the fourth plenary session of the 19th Central Committee of the Communist Party, a key gathering which sets the basic five-year policy on economic management, has been delayed for nearly a year.

"Under such circumstances," the researcher said, "it is difficult for China to bring negotiations with the U.S. to a conclusion."

Astonishingly, China has gone almost a full year with no basic policy on future economic management. Such a plan cannot be formally adopted without holding the fourth plenary session.

. . .

But the second and third plenary sessions were both held in early 2018 to prepare for an annual session of the National People's Congress, China's parliament, in March that year.

During the parliamentary session, the national constitution was revised, eliminating presidential term limits.

Since then, Xi seems to have prioritized cementing his grip on political power. This is why the constitutional revision, which paved the way for Xi to remain "president for life" was so important.

Emboldened by the elimination of presidential term limits, a group of close aides to Xi last summer blatantly pushed ahead with measures that built what strongly smacked of a "personality cult" around the president.

These efforts drew a strong backlash from elders and rival party factions, and began to lose steam after last summer's Beidaihe conclave.

If the fourth plenary session had been held last fall, immediately after the Beidaihe conclave, various demands might have surfaced regarding the personality cult, Xi's successor and the economy. Such a situation would have put Xi and his allies at a disadvantage.

This group wanted to let the dust settle before convening the fourth plenary session.

 

[Greg.D.]

He just called XI Jinping our enemy. That also means no longer his friend.

 

If he says anything about HongKong Xi might just say “well, what the hell, let’s just get this over with”

 

Really not making things better, I don’t think.

[Randy W]

from Dan Harris - China Law Blog

 

BREAKING: Alleged US-China “Micro” Deal Does Not Mean a Thing for Most

By Dan Harris on October 11, 2019

 

 

 

But what about today’s deal? Is it not a good thing? It sort of is, but it appears to be little more than financially induced stop-gap. I say “appears” because neither side has come out and explained the deal and supposedly nothing will be memorialized in writing for another 3-4 weeks — which I have to say is not something I would ever recommend to anyone negotiating a deal with a Chinese company! In any event, it seems the heart of the deal is a financial swap, whereby China buys more farm products from the United States (which it desperately needed) and agrees to limit its weakening of the RMB. In return for this, the United States has agreed not to increase tariffs next week, as originally planned.

Without any deal on existing tariffs or on China’s unfair treatment of foreign companies in China or its technology theft, this deal (if outlined properly above) should be viewed as a “nice” deal overall, but not a core change that should lead anyone to believe that much at all will change. Sure, President Trump will tout the deal as a major coup on his part and he will no doubt keep repeating that in an effort to try to bolster the market and his own popularity, but if this is in fact all we have we do not have much. In the short term, America’s farmers will benefit from this deal and many will benefit from the agreement by the U.S. not to increase tariffs further and the agreement by China not to manipulate its currency further. But beyond the increased farm sales, all we really have is an agreement not to make things worse by escalating.

 

[Randy W]

Are we priced out of the trade war? From the SCMP

 

Trump’s US$50 billion China farm deal ‘not possible’ after trade war market shift

• US President has repeatedly called for China to buy US$50 billion of American farm goods, which is more than double the US$24 billion record in 2012
• African swine fever has killed demand for biggest US export, soybeans, while other countries have supplanted America in agricultural supply chain

 

 

 

China has never confirmed this figure and has pushed back on committing to any fixed number, stating repeatedly that it would only buy in accordance with market conditions. Agricultural analysts have said that even if China agreed to such a massive purchase, it would be extremely difficult to make it work in reality.

China imported US$137 billion in agricultural goods in 2018, but it has never bought more than US$25.9 billion from the United States, which it did in 2012. That figure shrank to US$9.2 billion last year, as tariffs weighed heavily on the bilateral farm trade.

. . .

“With the African swine fever, there's just not much demand for the stuff that the US has to offer in terms of corn or soybeans to feed pigs – because we just do not have any pigs. We’ve lost half of them!” said Darin Friedrichs, senior Asia commodity analyst at trading house INTL FCStone in Shanghai.

The crisis has driven soybean prices from US$13 per bushel two years ago to just US$9 today. “So even if they bought the same amount they did before the trade war, it's just not going to make the same dollar value,” Friedrichs added.

 

[eseum]

The deal is just putting lipstick on a pig and saying it's beautiful. From what I have read China would buy 20 billion the first year of the trade agreement. Some accounts say that they will then up purchases the second year, but it won't be above any historical level. So looking at more like 50 billion over two years. Of course they might want to increase their import of pork, which will raise the price for us. Americans eat to much red meat anyways

[Randy W]

The deal is just putting lipstick on a pig and saying it's beautiful. From what I have read China would buy 20 billion the first year of the trade agreement. Some accounts say that they will then up purchases the second year, but it won't be above any historical level. So looking at more like 50 billion over two years. Of course they might want to increase their import of pork, which will raise the price for us. Americans eat to much red meat anyways

 

 

My guess is that China will make every appearance of being eager to "negotiate" while doing what they can to line up and maintain more reliable trading partners, And then agree only to mutual reductions in tariffs, while being ready to respond tit-for-tat with any trade war escalations.

[Randy W]

from the SCMP - https://www.scmp.com/news/china/article/3039012/trump-says-very-good-chance-make-trade-deal-china-hong-kong-unrest?utm_content=article&utm_medium=Social&utm_source=Facebook&fbclid=IwAR2sfv6By3SWAjay-6F-AlmUNVUHWnpXfEBb0TCRn3lun62rZs4Q5FqltMQ#Echobox=1574439855

“I told Xi this can’t be like an even deal because we’re starting off from the floor and you’re already at the ceiling so we have to have a much better deal,” he explained. “The bottom line is we have a very good chance to make a deal.”

[Randy W]

from the WaPo - the view from China

 

China hopes Trump will be reelected: He’s ‘easy to read’

 

“Trump is a businessman. We can just pay him money and the problems will be solved,” said a politically connected person in Beijing, speaking on the condition of anonymity to talk frankly about sensitive international issues. “As long as we have money, we can buy him. That’s the reason why we prefer him to Democrats.”

 

Trump’s unfiltered tweets help China in negotiations because he is “easy to read,” said Long Yongtu, a former vice minister of foreign trade and China’s point man during its accession to the World Trade Organization in 2001, at a conference in Shenzhen this month. “We want Trump to be reelected; we would be glad to see that happen.”

Another influential voice in Beijing, Tsinghua University international relations professor Yan Xuetong, wrote recently that, thanks to Trump, China was facing “the best strategic opportunity” since the Cold War.

“Trump has undermined the U.S.-led alliance system, which has improved China's international environment,” Yan said in Southern Review.

. . .

“Taiwan, Hong Kong, Xinjiang, the free and open Indo-Pacific, all of these are issues that President Trump does not typically address,” Economy said. “If I’m correct in my assumption that he doesn’t care about these issues, because he never talks about them, then he will be more willing to just trade them out in discussions with the Chinese.”

As if to prove that point, Trump declared Friday that he would be willing to veto legislation designed to support pro-democracy protesters in Hong Kong — despite its near-unanimous support in the House and Senate — to pave the way for a trade deal with China.

 

[eseum]

From TheHill: China wants removal of US tariffs in first phase of trade deal: report

 

https://thehill.com/policy/international/china/472528-china-eyes-removal-of-us-tariffs-in-first-phase-of-trade-deal

 

Nothing will happen this year if this is for real.