Tapes are in the news in Washington – Trump’s conversations with his former lawyer – which brings to mind another tape which allegedly exists in the hands of Mr Putin, and is also a reminder that there are no such tapes, and therefore no leverage, that the Chinese can bring to bear on the man who occupies the White House. So there is nothing to hinder his irrational randomness with regards to China, which for sure is driving Those in Command crazy. Their response, or at least their declared response, is eye for an eye, no blinking.
But if it is true, as appears to be the case, that China in the end needs the West more than the West needs China, then that’s a dangerous way to play the game. On the other hand, Those in Command are among the best bluffers in the world and Trump is one of the worst, so the fact their hand is weaker may not determine how this round plays out.
Trump, anyway, has decided to help China in other ways by sowing discord among the Western alliance and with Japan, giving an opening that they will not be slow to leverage. That is the backdrop to Mr Xi’s current trip to Africa to bolster the underlying theme of China being a credible replacement for the United States as the global leader.
The China markets, meanwhile, are being rigorously propped up: stimulus packages and no doubt big sums into the currency and stock markets to maintain the perception of stability. But other problems are lurking round the edges, most notably the vaccination scandal, local government debt rumors, and the P2P lending crisis. Confidence in the system is fundamental to this drama, and the vaccine issue is a particularly clear example of the problems implicit in a system lacking transparency and accountability. But all can be absorbed, as long as the economy remains buoyant.
Have a good weekend.