It’s all waiting at the moment. Apart from an X-factor event, there is the impending conclusion of the China-U.S. talks, which appear to have moved in a direction of sunshine, if one is reading correctly the tea leaves. The likelihood of a deal of some sort which puts the trade war on hold appears more likely, but with Trump in the mix anything is possible, and the robust members of the U.S. side are presumably going to be looking for some solid ways of locking in promises. Who knows, we just have to wait for the announcement.
We also have to wait for what is rumored to be a big meeting, and maybe a party central committee plenum, before the end of January to address the Big Economic Questions. That China is facing unprecedented and fundamental economic challenges is not news; what exactly Those in Command plan to do about it is what the markets are interested in, and this meeting if it occurs might provide some of the answers beyond urging state banks to hand out more money to SMEs. Will there be a big stimulus package? We would bet on a small-to-middling one. Will there be moves which shift China away from the trend of the past few years and back on a track towards greater economic diversity? We expect lots to be said, but as to concrete steps? It’s hard to see. We live eternally in hope.
Meanwhile, Huawei ran into more trouble in terms of the extent of its business dealings with Iran, and a Chinese diplomat accused Canada of racism and “white supremacy” over its extradition detention of Huawei’s CFO Ms Meng, while also effectively confirming that the seizure of several Canadians in China really was a tit-for-tat measure. How that all helps in terms of presenting China as a upholder of the rule of law is not clear.
But the sweet spot award of the week goes to Coca-Cola, which was named in two respected research reports as having put huge effort over the past few decades into shaping China’s policies on obesity and diabetes, shifting in effect the emphasis from controlling sugar-based intake to encouraging exercise. Just put out a green tea product, for god’s sake! Watching the growth of obesity in China over the past few decades makes us even, just a little teeny bit, feel nostalgic for the Cultural Revolution era.
Have a sugar-free weekend.