The run-up to the G20 meeting between Trump and Xi has been exhaustingly long, but the meeting is due to be held tomorrow China time. Our gut feel, a concept growing in popularity in terms of political analysis, is that some kind of ceasefire will be announced, with a delay on the imposition by the U.S. of higher tariffs on Chinese imports in return for concrete progress by China on U.S. demands. Giving China some time, in other words, and extending the agony for the rest of us.
The next most likely scenario is Trump sticking to the hardline policy, our logic being that he wouldn’t want to face the opposition and anger from his hardline China team if he was to declare some deal. But it’s all speculation and will be old news by the time of our next weekly missive.
Meanwhile, there has been a huge flood of news about concessions and reforms and improvements in terms of access to the China market for foreign goods and foreign investors, but the timing makes it difficult to get excited about any of it. It depends on implementation. And how much will the Chinese leadership will be willing to shift their position on maintaining the separateness of the China model? Unless, of course, Trump just makes a deal.
In other news, Alibaba founder Jack Ma was named by the People’s Daily as a member of the Communist Party. This indicates just how integrated these large so-called “private” companies now are into the system, and amongst many other things provides fodder for the China hawks in Washington who complain about the non-levelness of the playing field.
Lots of other talk about the property market and the state of the economy, but nothing really compares to the importance of the G20 chat. So let’s wait for that in the calming knowledge that there’s nothing any of us can do about it. Have a good weekend.