China has substantially increased purchases of US farm goods and implemented 50 of 57 technical commitments aimed at lowering structural barriers to US imports since the two nations signed a trade deal in January, the US government said on Friday, reported Reuters.

In a joint statement, the US Trade Representative’s (USTR) office and the US Department of Agriculture (USDA) said China had bought over $23 billion in U.S. agricultural goods to date, or about 71% of the target set under the so-called Phase 1 deal.

“Since the Agreement entered into force eight months ago, we have seen remarkable improvements in our agricultural trade relationship with China, which will benefit our farmers and ranchers for years to come,” US Trade Representative Robert Lighthizer said in a statement.

Kirin Holdings and China Mengniu Dairy said on Tuesday they have given up on the sale of the Japanese company’s wholly owned Australian dairy firm Lion-Dairy and Drinks to the Chinese company, reported Reuters.

The announcement follows a media report last week that the Australian government could block the deal in what would mark its first veto since it announced a shake-up of the country’s foreign investment laws in July.

Kirin said in a statement that the two companies had agreed to terminate the A$600 million ($430 million) transfer deal, signed last November, because approval from the Foreign Investment Review Board (FIRB) was unlikely to come.

What to say about the decoupling process? It’s a train that is picking up speed, from whatever angle you view it. The related steps being taken by both China and the US are too numerous to list out, but there is a sense of serious determination on both sides to hold to existing positions, and little room for compromise, apart from some bulk purchases of soybeans. Let’s look more closely at tech and territorial issues. 

Last week we mentioned TikTok, which is a Chinese app that is insanely popular in the US and many other places. It has been banned in India, and the signs seem to suggest that the US is going to require Bytedance to hive it off and make it an “independent” American company. Would it/could it be independent? The posting of a few “red flag” photos or comments to see if they were left in place or not would answer the question quickly and conclusively. So… unlikely. The whole thing is immensely problematic. Sell it to another company? Who could afford it? Google and Facebook, almost no one else. WeChat has also been mentioned as an app under review, and that’s much less of an issue because it is hardly used at all outside of the Chinese mainland community in the US. And how about Zoom? Good question. Of course, the whole issue could be resolved easily with reciprocity. How nice it would be to use Google and Dropbox without having to fire up a VPN.

As to territorial issues, the US announced a new policy, or a clarification of its position, on the South China Sea and sent a number of naval ships through to emphasize the point that it considers most of those waters to be international. China meanwhile announced sanctions against Lockheed Martin over sales of military equipment to Taiwan. Where is all this going? The senior Republican on the US House of Representatives foreign affairs committee for Asia, Ted Yoho, would have access to quite a lot information, and he was quoted a few days ago saying he would predict a clash in a timeframe of 3 to 6 months. Coincidental or not, that is about the period from November 3 and January 20, the date of the US presidential election and the formal handover of power from one administration to another. Damn. This is already a summer of discontent, and the prospects for the winter are looking even worse.

On the domestic front, China reported GDP growth for Q2 of 3.2%, which is a solid number, but the detailed figures showed a further shift in the economic balance with SOEs up and private enterprises down in terms of investment. Plus weak household consumption data. Meanwhile, with virus stimulus funds now ricocheting through the economy, China’s stock market and property market are both bubbling away. Could there be a connection, perchance?

This really is an awful year. Have a great weekend and burn some incense for better days ahead. 

China booked deals to buy 522,000 tons of soybeans, the US Agriculture Department said on Thursday, the latest in a string of purchases by the world’s top buyer of US agricultural products, reported Reuters.

In a separate report on Thursday, the USDA said that export sales of corn to China totaled 1.37 million tons in the week ended July 9, the biggest weekly total on record. China also bought 323,739 tons of wheat that week, its biggest weekly total since March.

China said on Thursday it will stick to the Phase 1 trade deal it reached with the United States earlier this year but warned that it will respond to “bullying” tactics from Washington, as relations continue to deteriorate.

But China would need to dramatically ramp up buying of US farm products in the coming months to fulfill its Phase 1 commitment to import $36.5 billion in the first year of the deal, signed in January. US government data shows that China imported just over $6 billion worth of US farm goods from January to May.

China booked its biggest single-day US corn purchase on record on Tuesday, its second massive deal for the yellow grain in less than a week, as it tries to meet its trade deal commitments even as tensions between Washington and Beijing rise, reported Reuters.

China on Friday increased its corn and soybean import forecasts for the current season, as the country was expected to step up purchases from the United States. The US Agriculture Department said that private exporters reported that China bought 1.762 million tons of corn for shipment in the 2020/21 marketing year that begins on Sept 1.

The sale eclipsed the previous single-day record sale to China of 1.45 million tons of corn, set in December 1994, according to USDA data. The deal follows a sale of 1.365 million tons to China, spread out over two marketing years, that the USDA announced on July 10.

China also booked deals to buy 129,000 tons of soybeans in the 2020/21 marketing year.