US-China remained the top issue this week, and it will be the same next week too. Is it a relationship in free fall? It sometimes seems pretty close. Trump talked again about the possibility of a complete decoupling of the US economy from China, and Biden took a hard line as well, saying American companies need to manufacture in America and would be penalized for not doing so if he becomes president. So from the perspective of the Chinese leadership, it doesn’t look there is too much to be gained either way.
On tech decoupling, September 15 is the deadline for TikTok’s Chinese owner to find a buyer, or risk losing billions of dollars of value if the app is banned in the US, as it has been banned in India. And September 14 is the deadline for semi-conductor manufacturer TMSC to stop selling chips to Huawei. All this is of course speeding up the determination of Beijing to make China self-sufficient.
Self-reliance was also visible in the area of financial decoupling too, with Yum China and Nongfu spring water both doing successful IPOs not in the US markets, but in Hong Kong.
On the domestic front, Secretary-General Xi declared victory in the virus fight, and in terms of China’s response to the economic fallout of the pandemic, that is absolutely justified. China’s economy is feeling remarkably normal, and exports are also doing better than expected. Consumption number released were down a bit, however, and the finances of key developers in the property sector are under some pressure. It’s all manageable stuff for Those in Command. The trickier issues that are visible are external, not domestic. Speaking of which, the EU and China are scheduled to meet next week for another round of talks on a long-related investment treaty. The prospects are not good for a clear resolution of the one.
Enjoy the end of summer as history rockets along.