A lot of the key news for the week related to the US in various strange ways. Bloomberg reported that China was planning to stop buying US treasury bonds, and the People’s Bank reacted with a testy denial. “Fake news,” it said. Whether it was a balloon by Beijing to rattle Washington, or an error of some sort, it is impossible to say. But the fact is that given the size of China’s forex reserves – still growing, according to the latest December data released this week – there is really nowhere else to park a significant portion but in US treasuries.
Then came Huawei, which has been going gangbusters in the past year or two everywhere except the United States. They thought they had nailed access to the American market – and then this week the deal was nixed by the US federal government. Meanwhile, also on the digital front, Apple is about to hand over all the data of all its domestic China user accounts to a state-run company in Guizhou.
The French president visited Beijing and used the word “reciprocity”, a concept which should have been pushed by the United States long ago but was not thanks to the appeasement approach of Kissinger and others. The signs of ever-more difficult economic relations between the US and China are the inevitable consequence of that. But too little too late? Who knows?
And finally – GDP growth rates. We learned that the official number for 2017 was 6.9 percent, ahead of the target, and the number for this year is 6.5 percent, presumably also chosen because they believe they can come up with a higher number.
Have a great weekend.