The week has been dominated by suggestions that the US and China are “90%” there in terms of a trade deal emerging from talks on the edge of the G20 meeting currently being held in Osaka. And what that precisely means we will only know when there is an announcement, and not before. All eyes are on the Japanese city, and the drama of a meeting between China’s Mr Xi and Trump. The randomness of a man who flew to the meeting over the Pacific means there is always a chance that the Chinese pull out something unexpected. As we said last week, anything is possible. A suspension of any escalation of US tariffs on Chinese goods and a resumption of full tasks remains the most likely outcome, but that 90% is tantalizing. Has one side or the other decided to pull back? We’ll find out soon enough.
Meanwhile, Xi met with Japanese Prime Minister Abe, creating a photograph which reminds us of the long-term scenario of a settlement of issues between the two countries and the creation of an East Asian bloc that really could aspire to global leadership. While obvious changes need to take place on the Chinese side of the equation for it to be possible, don’t rule it out during our lifetimes.
In other news the armymen caterpillars and moths are continuing to advance through China’s food-growing regions, increasing the possibility of an impact on food supplies and inflation. And Carrefour, the most successful of the external hypermart operators in the last era, announced it is pulling out of China, and selling virtually all of its business to Suning.
Have a pleasant weekend.