<div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="20" style="height:20px; font-size:0">&nbsp;</td></tr><tr><td style="vertical-align:top"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="padding-left:3.5%" a=""><a href="" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank" rel="noopener noreferrer" title="CHINADebate"><img width="100%" src="https://assets.website-files.com/5c864c33af62620dca1373ac/5d86577f82aa6e55afacb4ea_cd%20long-fit.png" alt="CHINADebate" style="width: 110px;"></a></td><td align="right" style="padding-right:3.5%"><a href="" target="_blank" rel="noopener noreferrer" style="color:#001544; font-size:13px; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;"></a></td></tr></tbody></table></td></tr><tr><td height="30" style="height:30px; font-size:0">&nbsp;</td></tr><tr><td style="text-align:center; line-height:1"><span style="font-size: 42px; font-family: gorditamedium, sans-serif; color:#0970b3; letter-spacing: -1px; line-height: 1;">China Macro Reporter</span></td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:30px; padding-top:10px;color:#001544; font-size:0.8125em; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;"><span style="color:#001544; font-size:13px; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;">by Malcolm Riddell<span style="margin:0 6px">·</span>Dec 21, 2019</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:20px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">Opening Statement</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/6vg7Ga?track_p_id=5MTFiA5dfDXK_MJnypz4Asm" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/4x73lYAycA6tlG4fEtV_j0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/6vg7Ga?track_p_id=4TaeG5dfDXK_ozlVmKb2RtR" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Ho Ho Ho!</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h1 style="display: inline-block;font-size: 1.35em;margin-top: 0em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;"><strong style="font-weight: bold">Holiday Greetings!</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The China Macro Reporter</strong> will off for the holiday break and back with regular issues on <strong style="font-weight: bold">January 8, 2020.</strong></p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">In the meantime, </strong>however, we will send you our picks for best analyses and reports from 2019. Watch your inbox.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Two pieces of news</strong> added to our broad coverage of China's default problems.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">One is the huge increase</strong> in vulture funds looking to snap up corporate bonds that have defaulted or are about to default.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Second is that Chinese prosecutors</strong> are dropping criminal charges owners of private business to help prevent their companies from defaulting on bonds.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Sometimes a couple of anecdotes</strong> explains a situation better than pages of analysis.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">More inside.</strong> Let me know what you think.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">And as always,</strong> please forward the China Macro Reporter to your friends and colleagues.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Best,</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Malcolm</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;            </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:7px; border-left:0px solid #c80000; text-align:center; font-size: 1.5em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">1. ‘Front &amp; Center’</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/8hRtaq?track_p_id=dp5Tas1uUtkvid5kg9eA_Hi" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/TiISon2f36FD5_ms-2WONki__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/8hRtaq?track_p_id=6O%40i2Al5kg9eA_KEV%40viXRs" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Phase One China Deal: Steep Tariffs Are the New Normal</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Peterson Institute for International Economics</h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Chad Bown | PIIE</h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘Steep US tariffs on imports from China are the new normal.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Nearly two years</strong> after President Donald Trump fired the opening shot in his&nbsp;<a href="https://www.piie.com/blogs/trade-investment-policy-watch/trump-trade-war-china-date-guide" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">trade war</a>&nbsp;with China, the smoke is clearing on what seems to be the new normal in the troubled US-China economic relationship: steep US tariffs on imports from China.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Even after the deal goes into effect,</strong> Trump's tariffs will still cover nearly two thirds of all US imports from China.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘He will also</strong> have increased the average US tariff on imports from China to 19.3 percent, as compared to 3.0 percent before the trade war started.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘China also&nbsp;</strong><a href="http://gss.mof.gov.cn/zhengwuxinxi/zhengcefabu/201912/t20191215_3441954.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">announced</strong></a>&nbsp;modifications to its tariff plans.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The December announcements</strong> imply that China's applied tariffs will also remain at elevated levels. Retaliation stemming from Trump's tariffs means that China will have increased its average tariffs on US exports to 20.9percent, as compared to 8.0 percent before the trade war (see figure 1).’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Overall, 56.7 percent of China's imports</strong> from the United States will remain covered with retaliatory tariffs (figure 4).’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The major escalation</strong> of trade coverage of China's retaliatory tariffs was timed to coincide with many of the same basic inflection points as the Trump administration's actions during the trade war.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;            </td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/hCQA8mQ1FsqutPu-6Vhfizl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/t9vnwxAcUGPX8-a7axTQ9zl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/6eXZDs?track_p_id=3jDN5UnCak_wP5LumFbgKx3" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/qAD7kBqLceF6aukL4-Brm0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/6eXZDs?track_p_id=2n65UnCak_Z6joNC2gbpczE" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">The Chinese economic miracle: How much is real… how much is a mirage?</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">American Enterprise Institute</h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Michael Beckley | Tufts &amp; AEI</h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘The United States is several times wealthier than China, and the gap may be growing by trillions of dollars every year.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The</strong><strong style="font-weight: bold">United States</strong> is several times wealthier than China, and the gap may be growing by trillions of dollars every year.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘This conclusion</strong> may surprise many people, given that China has a bigger GDP, a higher investment rate, larger trade flows, and a faster economic growth rate than the United States.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘How can China</strong> outproduce, outinvest, and outtrade the United States—and own nearly $1.2 trillion in US debt—yet still have substantially less wealth?’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The reason</strong> is that China’s economy is big but inefficient. It produces vast output but at an enormous expense.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Chinese businesses</strong> suffer from chronically high production costs, and China’s 1.4 billion people impose substantial welfare and security burdens.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘GDP and other standard measures</strong> of economic heft ignore these costs and create the false impression that China is overtaking the United States economically.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘In reality,</strong> China’s economy is barely keeping pace as the burden of propping up loss-making companies and feeding, policing, protecting, and cleaning up after one-fifth of humanity erodes China’s stocks of wealth.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘For decades,</strong> analysts have measured national wealth in gross rather than net terms, relying primarily on GDP and its components, such as trade and financial flows and investment spending.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘These gross indicators,</strong> however, overstate the wealth of populous countries because they count the benefits of having a large workforce but not the costs of having many people to feed, police, protect, and serve.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘These costs add up.</strong> In fact, they consume most of the resources in every nation.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Analysts,</strong> therefore, must deduct them to accurately assess the wealth of nations.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The World Bank and the UN</strong> have recently published rough estimates of countries’ net wealth stocks in three areas: produced capital; human capital; and natural capital (water, energy resources, arable land). In addition, Credit Suisse, a private firm, has published data on countries’ private stocks of wealth.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Despite using different data and methods,</strong> these three databases show a similar and surprising result: the United States is several times wealthier than China, and the absolute gap may be growing by trillions of dollars each year.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;            </td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/lgh9SIv4Ml5935oIPn8eCDl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">2. ‘Keep an Eye On’</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/549NKK?track_p_id=7Kc3h43t9HzXDS_haHHv1Z3" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/zxbyrGBKPhFFZLzMYqfYnUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/549NKK?track_p_id=8PjOmhtOK9HzXDS_yfYSu4C" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">China vulture funds feast as corporate defaults rise</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Financial Times</h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">'A record 176 corporate bond issuers have&nbsp;reneged&nbsp;on debt repayments this year, an increase from 125 in 2018.'</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br>'<strong style="font-weight: bold">A new breed of Chinese vulture funds</strong> has emerged as rising corporate defaults drive up bond yields, creating a fast-growing junk bond market worth more than Rmb1.2tn ($171bn).'               </p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'The boom</strong> has been fuelled by a sell-off in debt markets as issuers ranging from private factories to government investment vehicles, hurt by a slowing economy, run into trouble.'&nbsp;</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'A record 176 corporate bond issuers</strong> have&nbsp;<a href="https://www.ft.com/content/9f2f2370-15a1-11ea-9ee4-11f260415385" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">reneged on</a> debt repayments this year, an increase from 125 in 2018.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'More than 100 junk bond-focused investment firms</strong> have emerged since corporate defaults skyrocketed last year.'&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'There were fewer</strong> than 40 such launches in the previous five years combined.'&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'Many high-yield investors</strong> are banking on the assumption that Beijing will bail out troubled issuers to protect jobs and the economy, market-watchers say.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'Yet state-led bailouts</strong> appear to be in jeopardy, as central and local governments struggle with shrinking revenues.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'Some vulture funds</strong> have already suffered heavy losses, after an expected rescue package failed to materialise.'&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;            </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/6R5q08?track_p_id=dzyahqmd32sQav9LxcvG_cd" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/zxbyrGBKPhFFZLzMYqfYnUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/6R5q08?track_p_id=6JnMx3P9LxcvG_ymhy453tB" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">China grants immunity to executives to bolster private sector</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Financial Times</h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘Eight out of nine convicted corporate executives worked for private businesses.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">We’ve noted</strong> the many ways that State-Owned Enterprises are favored over private companies.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Here’s one</strong> we haven’t seen.</li></ul><p style="text-align: center;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">________________________________</p><p style="text-align: left;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br><strong style="font-weight: bold">‘Chinese prosecutors</strong> are dropping criminal charges against business owners in a desperate effort to rescue the country’s ailing private sector and to help companies grappling with one of the country’s worst debt crises.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“We should refrain</strong> from making arrests or prosecutions or giving harsh sentences whenever possible, because arresting or prosecuting business owners will immediately cause their firms to go under and dozens or hundreds of workers to lose their jobs,” said Zhang Jun, procurator-general of the Supreme People’s Procuratorate, in a televised speech last month.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘China’s private businesses</strong> face more legal risks than state-owned or foreign companies.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘A study</strong> by Beijing Normal University this year showed that between 2014 and 2018, eight out of nine convicted corporate executives worked for private businesses.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Their plight</strong> became particularly worrying this year with private companies, the main employers and taxpayers in China, struggling with a surge in defaults.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘A record 4.9 per cent of China’s private bond</strong> issuers reneged on payments in the first 11 months of this year, an increase from 0.6 per cent in 2014, according to Fitch Ratings.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;            </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">3. ‘Below the Radar’</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/8jUf8i?track_p_id=56xaTt8Fsc3y_tZAAjlBymP" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/Q7K3LvBpUHwYzkoXdXm2WUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/8jUf8i?track_p_id=c2M3IHM5uZeAn8Fsc3y_f6A" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">How China’s Communist Party Quietly Built a Real Estate Empire in Hong Kong</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Bloomberg</h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘China's Liaison Office in Hong Kong owns properties in more than 20 buildings across the city, with an estimated value of more than $1.5 billion.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘China's Liaison Office⁠—</strong>the Communist Party leadership’s main presence in Hong Kong and a primary target of protesters who have accused the institution of operating a “shadow government” in the semi-autonomous territory.’&nbsp;</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It precursors</strong> operated covertly during the late 1930s by posing as a wholesale tea company, and later under the guise of the Xinhua News Agency.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘In recent years</strong>, the office has used subsidiary companies to steadily grow an array of businesses that includes media holdings and most of Hong Kong’s bookstores⁠—provocative moves in a city where the 2015 jailing of booksellers triggered public outrage.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘But real estate</strong> is the most valuable piece of the Liaison Office’s portfolio.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The office</strong> owns properties in more than 20 buildings across the city, with an estimated value of more than $1.5 billion.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The properties⁠—</strong>most of which were acquired after Hong Kong’s 1997 handover from Britain—include office towers and upscale apartments used to house staff.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The Liaison Office and its subsidiary</strong> companies have received more than HK$206.5 million ($27 million) of stamp-duty exemptions on at least 91 property deals, according to data provided by Hong Kong’s Inland Revenue Department on deals dating to 2012.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;            </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;"> explainers</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/9HmYF6?track_p_id=8P4XgxBEh4joHNu_Iir3ch%40" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/Q7K3LvBpUHwYzkoXdXm2WUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/9HmYF6?track_p_id=bxUoR3OZtCPO4joHNu_KsVZ" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Why Hong Kong’s Property Tycoons Are Beijing’s Scapegoats</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Bloomberg</h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘Communist Party-controlled media outlets have repeatedly called Hong Kong’s housing crisis the&nbsp;“root cause”&nbsp;of the protests.'</strong></h2><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Great interactive article,</strong> but a little tricky to view - just keep scrolling.</h3><p style="text-align: left;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘After six months of unrest in Hong Kong,</strong> China’s main scapegoat has been four local property dynasties who control firms with assets worth more than the special administrative region’s gross domestic product.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The Kwok, Li, Lee and Cheng families</strong> control four of the city’s biggest property developers—“the Big Four”—and developed some of the most expensive buildings in the main business areas of Central and Tsim Sha Tsui, along Victoria Harbour.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Communist Party-controlled media outlets</strong> have repeatedly called Hong Kong’s housing crisis the&nbsp;<a href="http://www.globaltimes.cn/content/1165852.shtml" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">“root cause”</a>&nbsp;of the protests, and pressured the government to seize idle land from property developers to build affordable housing.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The government</strong> has its eyes on their sprawling agricultural land banks. The four developers hold about a fifth of Hong Kong’s farmland, most of which is near the border with China.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Chinese state media</strong> and others have accused the tycoons of using these holdings to manipulate the already scarce supply of available land, a main driver of Hong Kong’s sky-high property prices.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Hong Kongers largely&nbsp;</strong><a href="https://www.hkupop.hku.hk/english/report/greensense_housing2018/index.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">blame policies</strong></a>&nbsp;that brought an influx of about 1 million mainland immigrants since the 1997 handover for the 5-year wait for public housing.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'An average flat in Hong Kong</strong> is 484 square feet—the smallest in the world and about half the average in New York or London.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘About a&nbsp;</strong><a href="https://www.censtatd.gov.hk/hkstat/sub/sp150.jsp?productCode=D5250033" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">million</strong></a><strong style="font-weight: bold"> families</strong> are in public housing, and another&nbsp;<a href="https://www.housingauthority.gov.hk/en/flat-application/allocation-status/index.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">quarter million</a>&nbsp;applicants are on waiting lists.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘That is </strong>roughly half of all households in one of the world’s most expensive cities.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Note the pink line</strong> in the graphic below: 'Median household income.'</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;            </td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/5oaNFcQc0qumWFKbTwzRAzl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/98HZc8?track_p_id=06p48tC_kOlUo4lUyTyIzDU" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/Tad6xj_ebVw7qqeNRLm3H0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/98HZc8?track_p_id=4FqwA6p48tC_bg4slHPYz1S" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Xi Jinping’s Annus Horribilis</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Project Syndicate</h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Minxin Pei | Claremont McKenna College</h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘As Xi has concentrated political power in his own hands, however, decision-making has been transformed.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">&nbsp;‘China’s strongman leader</strong> can’t seem to catch a break.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘From the trade war</strong> with the United States to the crisis in Hong Kong to international criticism of his human-rights record, President Xi Jinping suffered major setbacks in 2019, and his prospects for 2020 appear even worse.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Xi can blame only himself</strong> – or, more specifically, his excessive centralization of power – for the challenges of the last year.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'Before China’s collective leadership, </strong>however corrupt and indecisive, managed to limit the escalation of these crises, thanks largely to their aversion to risk.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘As Xi has concentrated political power</strong> in his own hands, however, decision-making has been transformed.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Those hoping to influence policy</strong> must gain access to Xi himself, and they have every incentive to cherry-pick information to support his preferences.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Likewise,</strong> Xi’s colleagues on the Politburo Standing Committee, fearful of appearing disloyal, are loath to share information that may contradict his view.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘They know</strong> that proposing an alternate approach could be seen as a direct challenge to Xi’s authority.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Xi’s intolerance of dissent</strong> and vulnerability to bad information has made his government much&nbsp;<a href="https://www.project-syndicate.org/commentary/xi-china-centralized-leadership-policy-mistakes-by-minxin-pei-2019-04" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">more prone</a>&nbsp;to policy blunders.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;            </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/9A2ywq?track_p_id=3zD46pSZ2s_LjwUzu5i6usV" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/Tad6xj_ebVw7qqeNRLm3H0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/9A2ywq?track_p_id=4XN3h6pSZ2s_BwNIwPu%401%40M" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">China’s Civilizational Challenge&nbsp;</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Project Syndicate</h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘Far from enabling China’s peaceful reunification, the “one country, two systems” model is undermining it.’</strong></h2><p style="text-align: left;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘China’s “one country, two systems” formula</strong> in Hong Kong is failing miserably.'</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘A similar backlash</strong> against mainland China is now also occurring in Taiwan.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Having enjoyed&nbsp;</strong><em style="font-style: italic">de facto&nbsp;</em>independence since 1949, Taiwan was supposed to be drawn back into the Chinese fold by the “one country, two systems” model.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But that model’s failure</strong> in Hong Kong has hardened anti-China sentiment, and turned many voters away from the pan-Blue political parties, which favor closer ties with the mainland.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Far from enabling</strong> China’s peaceful reunification, the “one country, two systems” model is undermining it.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The Chinese state,</strong> built on a millennia-old paradigm of political order, cannot cope with intergovernmental conflict.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Modern democracy</strong> is based on division, within society and the state.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘In society,</strong> different groups, each with its own interests and priorities, compete for representation.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘In the state,</strong> there is a horizontal separation of powers (among the legislative, executive, and judicial branches) and a vertical division of powers (among national and sub-national governments).’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘For countries with a history of foreign domination,</strong> such divisions may seem like weaknesses that can be exploited by outsiders using a “divide-and-rule” strategy.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘And, indeed,</strong> according to China’s cyclical worldview, the commonwealth (<em style="font-style: italic">Tian Xia</em>) rotates between division (marked by chaos and war) and unity (which restores peace and order).’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘To be sure,</strong> China does maintain a separation of powers. But it is much more comfortable with horizontal checks and balances than vertical ones.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘For more than 2,000 years,</strong> Chinese imperial courts appointed a censor-in-chief to&nbsp;<a href="http://www.chinaknowledge.de/History/Terms/yushidafu.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">manage&nbsp;</a>ministers and bureaucrats, and grandmasters of remonstrance to&nbsp;<a href="http://www.chinaknowledge.de/History/Terms/menxiasheng.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">criticize</a>’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The Song dynasty</strong> even&nbsp;<a href="https://www.osgeo.cn/post/d6319" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">divided provincial-level power&nbsp;</a>among military, administrative, fiscal, and judicial officials.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Conflicts between national and sub-national governments,</strong> however, were historically divided into three categories – warlordism (割据,&nbsp;<em style="font-style: italic">ge ju</em>), insubordination (不臣,&nbsp;<em style="font-style: italic">bu chen</em>), and foreign threat (外患,&nbsp;<em style="font-style: italic">wai huan</em>) – all of which are unambiguously negative.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘To this day,</strong> China’s rulers distrust leaders with a local base, often choosing outsiders to serve as provincial governors and party bosses, and reshuffling them regularly.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘From the Chinese government’s perspective,</strong> “Hong Kong ruled by Hong Kongers” (港人治港,&nbsp;<em style="font-style: italic">gang ren zhi gang</em>) was already a risky concession.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘So it ruled out a directly elected</strong> chief executive and worked to suppress the opposition, fearing that local dissidents would act as foreign agents to challenge the central government’s authority.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘This effort has failed.</strong>’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;            </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div>

<div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="20" style="height:20px; font-size:0">&nbsp;</td></tr><tr><td style="vertical-align:top"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="padding-left:3.5%" a=""><a href="" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank" rel="noopener noreferrer" title="CHINADebate"><img width="100%" src="https://assets.website-files.com/5c864c33af62620dca1373ac/5d86577f82aa6e55afacb4ea_cd%20long-fit.png" alt="CHINADebate" style="width: 110px;"></a></td><td align="right" style="padding-right:3.5%"><a href="" target="_blank" rel="noopener noreferrer" style="color:#001544; font-size:13px; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;"></a></td></tr></tbody></table></td></tr><tr><td height="30" style="height:30px; font-size:0">&nbsp;</td></tr><tr><td style="text-align:center; line-height:1"><span style="font-size: 42px; font-family: gorditamedium, sans-serif; color:#0970b3; letter-spacing: -1px; line-height: 1;">China Macro Reporter</span></td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:30px; padding-top:10px;color:#001544; font-size:0.8125em; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;"><span style="color:#001544; font-size:13px; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;">by Malcolm Riddell<span style="margin:0 6px">·</span>Dec 18, 2019</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:20px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">Opening Statement</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/7Rkmxs?track_p_id=cJeWgC42UYQvN5dfDXK_3ld" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/uhp7CvL-kYuJYdwsZTPG2Ui__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><span style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Next Stop: U.S.-China Financial War?</span></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h1 style="display: inline-block;font-size: 1.35em;margin-top: 0em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">&nbsp;The Phase One trade deal</strong> already seems so last week.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Details are sketchy</strong> but the deal and its implications are still being debated by experts, so we've included a few here.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">One way</strong> to look at the deal is in context:</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘President Trump</strong> claimed a multi-front victory last week in&nbsp;his bid to reshape U.S. trade policy, extracting fresh commercial concessions from Mexico and China while stripping the World Trade Organization of its powers to restrain the tactics he used to secure them.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Of these,</strong> what is of most interest to me - and what will probably have the broadest impact - is the gutting of the WTO appeals court.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">With that, Mr. Trump</strong> has given himself an even freer hand to pursue unilateral 'America First' trade policies. EU watch out.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Another way to look</strong> at the deal is to ask: What's next in U.S.-China relations.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">And here</strong> the answer is we may be shifting from a trade war to a financial war.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">If you thought </strong>the trade war disrupted markets and economies, hold on to your hat.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Speaking of what's next,</strong> we have included here the first part of Gordon Orr's annual analysis of the upcoming year in China.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">For decades</strong> Gordon was McKinsey's Chairman Asia based in Shanghai.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">And his annual predictions</strong> are most often correct - great insights with more to come.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Let me know</strong> what you think.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">And as always</strong> please <span style="color: #d0021b">forward</span> the China Macro Reporter to your friends and colleagues.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Best,</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Malcolm</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; height: 30px; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="auto" style="border-bottom: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 8px 40px 8px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;">          Trade Deal</span></td></tr><tr><td width="40" height="auto" style="border-top: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/7jv7I0?track_p_id=1E5aXZyY_zaatk%40eCZL2iYS" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/qAD7kBqLceF6aukL4-Brm0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/7jv7I0?track_p_id=41xn55aXZyY_sK1yv36ut6u" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Parsing the China Deal facts (sheet)</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">American Enterprise Institute</h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Derek Scissors</strong> | AEI</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘It strains belief that, on account of a not-very-big tariff break, the PRC will stop pushing multinationals to share.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">“Fact sheets”</strong> are public relations efforts.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘So it’s telling</strong> that the&nbsp;<a href="https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/december/united-states-and-china-reach" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">fact sheet</a> for the US-China trade deal announced last week is not convincing — phase 1 is in fact a small deal.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The twist:</strong> small is beautiful in this case.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘While Chinese concessions</strong> will almost surely fall short, the US didn’t give up leverage (as some wanted) and can respond either to meaningful progress by China or the lack.’’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘That the Trump administration’s version of the deal</strong> is exaggerated is seen most simply in the balance of the two sides’ actions.’&nbsp;</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘</strong><a href="https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/december/united-states-and-china-reach" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">All the US has acknowledged it will do</strong></a><strong style="font-weight: bold">,</strong> at least, is cancel planned tariffs and halve the rate on one block of existing tariffs.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘In exchange the PRC</strong> is supposed to both make very sizable purchases and change fundamental technology practices, where one of those would&nbsp;be a large step.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Unfortunately,</strong> neither looks entirely real.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Take the American description </strong>of the pivotal matter&nbsp;of coerced technology transfer “China has agreed to end its long-standing practice of forcing or pressuring foreign companies to transfer their technology to Chinese companies as a condition for obtaining market access.”</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'Technology transfer</strong> has always been, for good reasons, a crucial part of China’s development model.'&nbsp;</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It strains belief that,</strong> on account of a not-very-big tariff break, the PRC will stop pushing multinationals to share.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The second major issue is purchases:</strong> “commitments from China to import various U.S. goods and services over the next two years in a total amount that exceeds China’s annual level of imports for those goods and services in 2017 by no less than $200 billion.” <strong style="font-weight: bold">Highly unlikely.’</strong></p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Say farm exports</strong> hit&nbsp;the high end&nbsp;<a href="https://www.reuters.com/article/us-usa-trade-china/us-china-trade-deal-totally-done-will-expand-us-exports-lighthizer-idUSKBN1YJ0GL" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">given by the administration</a>, exceeding $40 billion in 2020 and&nbsp;touching $50 billion in 2021. That’s $40 billion or so combined over 2017.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Where’s the other</strong> $160 billion coming from?’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The biggest American export</strong> to China in 2017 was aircraft,&nbsp;<a href="https://www.stlouisfed.org/publications/regional-economist/third-quarter-2018/closer-look-exports-china" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">at $16.3 billion</a>.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It’s hard to see</strong> a plausible, positive path to $300 billion in 2021 exports.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘That’s not so bad.’</strong></p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Unlike the United States-Mexico-Canada</strong> trade treaty, the China agreement won’t be ratified by Congress and is best viewed as a&nbsp;<a href="https://www.youtube.com/watch?v=rvEr7XlsaEY" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">memorandum of understanding</a>.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The US</strong> should use it to test Beijing’s intentions.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Will American</strong> exports soar $200 billion and coercive technology practice halt – no.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But clear progress</strong> on both fronts would be an excellent outcome.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘In this light,</strong> complaints the deal doesn’t go far enough smack of preferring American capitulation.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Sizable tariffs</strong> were applied barely six months ago; the PRC won’t undertake major change at the convenience of an&nbsp;<a href="https://www.nber.org/papers/w25769https:/www.nber.org/papers/w25769" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">increasingly shrill American investor class</a>.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The US can now</strong> wait to see how China’s deeds fit its words — a good position in an election year.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/825Rc8?track_p_id=5D2VZ4856AIg_bZ2hH3gicR" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/CR-ApauK-9CAi7DFNjVVBUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/825Rc8?track_p_id=2iJ856AIg_ETSBCSFwbpqiQ" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">China Deal: ‘a Real Breakthrough’</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Fox Business</h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Mike Pillsbury | </strong>Hudson Institute</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘The President told me this basically has to do with his relationship with Xi Jinping.’</strong></h2><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><a href="https://www.hudson.org/research/15550-china-deal-a-real-breakthrough" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Watch</strong></a><strong style="font-weight: bold"></strong>Mike Pillsbury’s video interview (9m)</h3><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">LOU DOBBS: ‘The Phase One deal</strong> is an extraordinary step forward. It is, however, still clearly unformed. Your thoughts.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">MIKE PILLSBURY: ‘I think the Phase One deal</strong> is a tremendous achievement by the President.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The President told me this basically</strong> has to do with his relationship with Xi Jinping.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘This has been part</strong> of his strategy – to focus over the last three years on the authoritarian leader who has the power to be able to deliver the kind of results that President Trump promised during the campaign.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It looks like</strong> he's done that. It looks like the President is quite delighted that the Chinese have agreed to his terms.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The most important thing</strong> is this very clever idea to have a Phase One and then wait a year to sign Phase Two - that’s what the President told me today - after the election in 2020.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The talks can go on,</strong> but they won't be public and there won't be exchanges of information publicly. ‘</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The idea is with Phase Two</strong> is to have a real signing ceremony with President Trump and the Chinese a year from now and try to cover everything that isn't covered today.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">DOBBS: ‘I want to establish</strong> first whether there is text to all of it.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">PILLSBURY: ‘There are some limited texts.</strong> Whether the President wants to announce the whole thing with the long, written agreement, I'm not sure.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘There's a matter here</strong> that the Chinese may have given him so much that he doesn't really want to embarrass them by making it all public.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘So it may be a lower level signing agreement</strong> - not between the President and Xi and not some sort of long 20-page deal - but there's enough detail about what's been agreed to.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘I personally am very astonished</strong> really at this success of these talks - they've gone up and down, as you know - now it looks like a real breakthrough.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/8cQ6GO?track_p_id=b3YBbecfcNCX6V21uQ_YcyE" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/3QKIJ28TXRxlm_PNLipujEi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/8cQ6GO?track_p_id=7sOa6YaR6V21uQ_itnG1OqO" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">China’s Hard-Liners Win a Round in Trump’s Trade Deal -&nbsp;</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">New York Times</h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Keith Bradsher</strong> | New York Times</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘A year and a half into the trade war, China seems to have a winning strategy: Stay tough and let the Trump administration negotiate with itself.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'The White House</strong> called the Phase One deal a win.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But President Trump’s initial retreat</strong> from his trade-war threats has handed hard-liners in China a victory.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘In essence,</strong> a year and a half into the trade war, China seems to have hit on a winning strategy: Stay tough and let the Trump administration negotiate with itself.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘This spring </strong><a href="https://www.nytimes.com/2019/05/09/us/politics/china-trade-tariffs.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">a previous pact struck by Chinese moderates fell apart</a>.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Since then, </strong><a href="https://www.nytimes.com/2019/11/07/business/china-trade-trump.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">China has asked</a>&nbsp;that even a partial deal include tariff rollbacks. American officials resisted, debated, then relented.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Even before Friday,</strong> Trump had&nbsp;<a href="https://www.nytimes.com/2019/12/10/business/china-tariffs-december.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">delayed or canceled tariffs four times this year</a>.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The Phase One deal</strong> may be seen by Xi Jinping,&nbsp;<a href="https://www.nytimes.com/2018/02/26/world/asia/xi-jinping-thought-explained-a-new-ideology-for-a-new-era.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">China’s top leader</a>, and his hard-line supporters as vindication of the intransigent stance they have taken since they killed the spring deal.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘For this reason,</strong> Friday’s Phase One deal announcement makes it likelier that China will resist any further concessions next year, and perhaps beyond.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It also seems to affirm the belief,</strong> held by many Chinese officials, that Mr. Trump will back off from his trade-war threats if markets tumble, or if his supporters in agricultural states suffer too much.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘All together</strong> this could mean a longer, pricklier trade war going forward.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/8KFlwG?track_p_id=6UzN1IV7JcknO_kc6dl3GqF" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/gdOaMp6kNDu8DduDUAQeR0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/8KFlwG?track_p_id=b%40oZzNb%40iwOZ7JcknO_jOHH" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">‘The financial side is going to be the next U.S.-China battleground.’</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Fox Business</h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Leland Miller</strong> | China Beige Book</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘The financial side is going to be the next U.S.-China battleground.’</strong></h2><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">&nbsp;</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><a href="https://www.youtube.com/watch?v=FG_5Ho-bl0w" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Watch</strong></a><strong style="font-weight: bold"></strong>Leland’s video interview (8m<strong style="font-weight: bold">) - terrific</strong></h3><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘You're going</strong> to have to constantly deal with the evolving U.S.-China landscape on cyber, and across the board.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘This isn't something</strong> you can solve, and then take five years off, and come back to the problem, and then reevaluate. This is a rolling stone.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘We're going to have go back and challenge China</strong> each and every time they do something we object to. There’s going to continually be a push and shove in the relationship.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘And that's why</strong> you're never really going to have a true detente.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘For example,</strong> people have not been paying attention the problems of China’s involvement in U.S. capital markets to because they've been watching tariffs.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But as we move into 2020</strong> we're going to see less about trade and going to see more things on the financial side.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘That's going</strong> to be the next U.S.-China battleground.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘I've never really</strong> put much faith in this snapback mechanism to punish China if it doesn’t live up to the Phase One deal because nothing's going to snap back.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It's going to go to President Trump.</strong> The White House is going to look and see whether the political environment is such that it could allow for a market reaction to putting the tariffs back on.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Instead</strong> we’re going to have to develop whole new ways to deal with China. And that's the big issue here.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘You're not going</strong> to always be able to punish the Chinese with tariffs.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘2020 is a year</strong> in which tariffs will be mostly off the table as a response mechanism, but there's going to be lots of pushing and shoving regardless.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; height: 30px; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="auto" style="border-bottom: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 8px 40px 8px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;">Trade Policy</span></td></tr><tr><td width="40" height="auto" style="border-top: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/8uaQaW?track_p_id=7fjR4G3%4063i8di_OZEQR%40VX" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/8uaQaW?track_p_id=3eCR63i8di_wnqu3341dMhK" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Trump’s ‘America First’ Trade Vision Comes Into Focus on Three Fronts</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Wall Street Journal</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">“This&nbsp;was the week where the first three years of Trump administration trade policy all came together.”</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘President Trump</strong> claimed a multi-front victory last week in&nbsp;his bid to reshape U.S. trade policy, extracting fresh commercial concessions from Mexico and China while stripping the World Trade Organization of its powers to restrain the tactics he used to secure them.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“This&nbsp;was the week</strong> where the first three years of Trump administration trade policy all came together,” said <strong style="font-weight: bold">Clete Willems</strong>, who worked as a White House trade adviser until April.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“The latest deals</strong> show that the United States has a great deal of leverage, when that leverage is used effectively,” said <strong style="font-weight: bold">Stephen Vaughn</strong>, who worked until April as an administration trade negotiator.&nbsp;“The U.S. is actively making its own trade policy right now, and that’s going very well.”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Skeptics saw in last week’s activity</strong> the limits of unilateral American might in bending the global trading system to its will.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“Trump was right to call China out</strong> on their violations of rules and norms,” said <strong style="font-weight: bold">Fred Bergsten</strong>, a trade expert at the Peterson Institute for International Economics.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“But he has been going at them</strong> for three years, unleashed a lot of firepower, and has gotten essentially nowhere on the big issues.”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Many economists, business leaders and members of Congress</strong> from both parties say Mr. Trump’s efforts have done little so far to boost economic activity—other than by defusing the uncertainty he himself stoked with his disruptive acts.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“If your metric</strong> is that we’ve stopped bleeding ourselves, then these have been a plus,” said <strong style="font-weight: bold">Robert Zoellick</strong>, a former chief trade negotiator in the Bush administration from 2001 to 2005.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“If your metric</strong> is whether we’re expanding trade, opening markets and setting higher standards, then these have been a total waste of time.”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/9Ckkue?track_p_id=1m5WV4QA_zGDnQYFgyIMb1h" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/9Ckkue?track_p_id=cL5ocOeWceLSe5WV4QA_2gR" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Without the WTO Trade Court, Trump is Free to Act Unilaterally</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Wall Street Journal</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">By effectively eliminating the WTO trade court President Trump has given himself a free hand in trade to act unilaterally without challenge.</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘President Trump’s tactics </strong>in pursuing the USMCA and China deals marked a sharp break from his recent predecessors. In both, he imposed tariffs unilaterally to force concessions.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Mexico and Canada</strong> agreed to rewrite Nafta in part to get Mr. Trump to remove steel and aluminum tariffs he had placed on them, and to respond to Mr. Trump’s threats to add new levies on cars.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘China import pledge</strong> was given in part to get Mr. Trump to drop new tariffs on $156 billion in Chinese goods scheduled to take effect Sunday, and in part for other tariff relief.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘And after Mr. Trump’s</strong> neutering of the trade court last week, other countries will have a harder time using the WTO to challenge his unilateral actions.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Since the WTO’s creation</strong> a quarter-century ago, U.S. presidents have avoided using those unilateral powers, instead taking their complaints to the WTO and letting the judges there determine whether the U.S. had a legitimate grievance and, if so, the proper response.’&nbsp;</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Mr. Trump</strong> has regularly said the Geneva trade court treats the U.S. unfairly, arguing American interests were better served by undermining the institution.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">By effectively eliminating </strong>the WTO trade court President Trump has given himself a free hand in trade to act unilaterally without challenge.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; height: 30px; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="auto" style="border-bottom: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 8px 40px 8px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;">Is a U.S.-China Financial War Next?</span></td></tr><tr><td width="40" height="auto" style="border-top: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/5htDXM?track_p_id=333S4tzPp8_JICrY2QNFHgt" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/KMsz5uqZD32hxx-2Lz89r0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/5htDXM?track_p_id=a3vhQIO3daW4tzPp8_U2XXt" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Look Out: Some Chinese Thinkers Are Girding for a “Financial War”</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Politico</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘The next front line of the U.S.-China conflict may already be taking shape, with an ominous name: Financial War.</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The next front line</strong> of the U.S.-China conflict may already be taking shape, with an ominous name: Financial War.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘A U.S.-China financial war</strong> fundamentally would be a contest over the ability of the United States to use its centrality in global finance to exert its power over its competitors and adversaries faster than they can find alternatives.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Many members</strong> of the Chinese elite are indicating, subtly but unmistakably, that they see global finance as a rising theater of conflict.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“The trade war</strong> is evolving into a financial war and a currency war,” Chen Yuan, former central bank deputy governor, declared.'&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘After the U.S. officially labelled China</strong> a currency manipulator in August 2019, both Zhou Xiaochuan, the longtime central bank governor, and&nbsp;<a href="https://www.bloomberg.com/news/articles/2019-08-10/china-ex-central-bankers-warn-of-lasting-currency-war-with-u-s?cmpid=socialflow-twitter-business" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">Chen Yuan</a>, called for China to find new ways to use the yuan instead of the dollar in many more international transactions.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But challenging</strong> the dollar is daunting.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘China accounted</strong> for more than 25 percent of global GDP growth in 2018, but its currency still makes up less than 2 percent of all assets held by central banks and only 1 percent of the international payments market.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Another target</strong> of Chinese concern is the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the international financial messaging system used widely for cross-border payments.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It’s based in Belgium</strong> and claims to be “a global and neutral service provider,” but because of the massive power of the United States, it has complied with&nbsp;<a href="https://www.ft.com/content/8f16f8aa-e104-11e8-8e70-5e22a430c1ad" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">sanctions</a> (such as sanctions to shut out Iranian banks) even over the objections of the European Union.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘This makes</strong> it a very effective tool of U.S. influence over global financial markets.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘It’s not clear that China</strong> would be able to develop a real alternative anytime soon.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘China started</strong> its own Cross-border Interbank Payment System in 2015, but it has not gained traction.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Some Chinese academics</strong> have acknowledged that&nbsp;<a href="http://www.globaltimes.cn/content/1168382.shtml" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">replacing SWIFT</a> may be “utterly impossible.”&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Of more immediate concern,</strong> the Trump administration and Congress is considering measures that would mark a significant escalation in the emerging “financial war.”</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘These include attempts</strong> to restrain foreign purchases of U.S. financial products and assets by imposing a “market access charge,” long-overdue requirements that companies listed on U.S. exchanges comply fully with&nbsp;<a href="https://www.rubio.senate.gov/public/index.cfm/2019/6/rubio-colleagues-introduce-bipartisan-bicameral-bill-to-ban-chinese-foreign-firms-that-flaunt-u-s-laws-from-u-s-exchanges" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">auditing standards</a>,&nbsp;<a href="https://www.bloomberg.com/news/articles/2019-09-27/white-house-weighs-limits-on-u-s-portfolio-flows-into-china-k12ahk4g?utm_content=business&amp;cmpid=socialflow-twitter-business&amp;utm_campaign=socialflow-organic&amp;utm_source=twitter&amp;utm_medium=social" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">limiting portfolio&nbsp;</a>flows into China, and even delisting Chinese firms from U.S. exchanges.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; height: 30px; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="auto" style="border-bottom: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 8px 40px 8px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;">Gordon Orr: China 2020</span></td></tr><tr><td width="40" height="auto" style="border-top: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0; border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/5PitDE?track_p_id=4e1Lt4j3rJe_eaymm3g33Ir" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/nBbgEGMz1SA-R0H73QoZZ0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/5PitDE?track_p_id=1j4j3rJe_UDxxxBJdoiUVby" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">China in 2020: Trade, technology, and the path ahead for US-China relations</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Gordon Orr</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0;margin-bottom: 0;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘Among new areas of US-China separation that will come into focus in 2020, financial markets will be front and center.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Each year Gordon Orr</strong> takes a look at the year ahead in China, most of time with uncanny accuracy.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Gordon spent decades</strong> as McKinsey Chairman Asia headquartered in Shanghai.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Here is his take</strong> on U.S.-China Relations. More of Gordon's insights to come.</p><p style="text-align: center;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;___________________________</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Multiple areas of growing separation</strong> between the US and Chinese economies predicted in last year’s note were largely realized – investment flows, supply chain, data flows, people flows, technology procurement, standards. In all these areas, further separation will occur in 2020.’&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Looking into 2020,</strong> if there is finally agreement it seems likely to be narrow and not likely to be long lasting.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Multinationals</strong> have suffered least from tariff volatility.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘They typically send</strong> no more than 15 percent of their China production to the US and have multiple factories around the world that they can move production for the US to. Almost none of these factories are or will be in the US.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Smaller businesses,</strong> often foreign-owned, that focuses solely on exports to the US, have been most hurt.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Factories do continue</strong> to move out of China. Manufacturers are also consolidating in China, doubling down on technology in their remaining factories.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Indeed,</strong> China is rapidly becoming the world center for the Internet of Things in factories.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘These trends</strong> preceded the US tariffs and have only been marginally accelerated by them.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘More non-Chinese companies</strong> than Chinese are shutting down factories in China, but not all move production out of China as they close.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘A good number</strong> outsource their manufacturing to a Chinese owned company producing in China, believing that the Chinese company will be lower cost than the foreign-owned factory, and just as good quality.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Among new areas of US-China separation</strong> that will come into focus in 2020, financial markets will be front and center.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The U.S.-China Economic and Security Review Commission’s</strong> 2019 report to Congress has as its first recommendation to delist Chinese companies on US exchanges that do not meet four criteria.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘No Chinese company</strong> listed in the US meets all four, many won’t meet any.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘This threat covers</strong> around 500 companies with a cumulative market capitalization of about US$ 1 trillion (dominated by Alibaba). It was smart of Alibaba to get its secondary listing in Hong Kong in place in November 2019.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Less than US$2 billion</strong> has been raised by Chinese companies on the NYSE and Nasdaq so far this year, down 74 percent from last year.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Some Chinese tech companies</strong> may list domestically within China where listings generally achieve higher earnings multiples and Chinese regulators have quietly made it possible for companies using the Variable Interest Entity (VIE) structure to list domestically.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div>

<div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="20" style="height:20px; font-size:0">&nbsp;</td></tr><tr><td style="vertical-align:top"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="padding-left:3.5%" a=""><a href="" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank" rel="noopener noreferrer" title="CHINADebate"><img width="100%" src="https://assets.website-files.com/5c864c33af62620dca1373ac/5d86577f82aa6e55afacb4ea_cd%20long-fit.png" alt="CHINADebate" style="width: 110px;"></a></td><td align="right" style="padding-right:3.5%"><a href="" target="_blank" rel="noopener noreferrer" style="color:#001544; font-size:13px; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;"></a></td></tr></tbody></table></td></tr><tr><td height="30" style="height:30px; font-size:0">&nbsp;</td></tr><tr><td style="text-align:center; line-height:1"><span style="font-size: 42px; font-family: gorditamedium, sans-serif; color:#0970b3; letter-spacing: -1px; line-height: 1;">China Macro Reporter</span></td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:30px; padding-top:10px;color:#001544; font-size:0.8125em; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;"><span style="color:#001544; font-size:13px; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;">by Malcolm Riddell<span style="margin:0 6px">·</span>Dec 14, 2019</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:20px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">Opening Statement</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/8wNYTg?track_p_id=34I15dfDXK_VkGJnmdwjKg1" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/4x73lYAycA6tlG4fEtV_j0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/8wNYTg?track_p_id=66GGgqH5dfDXK_t3JWZyWsz" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Phase One Opens to Mixed Reviews</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;/* border-bottom: 2px solid #c80000; */"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">As could be predicted,</strong> reaction to the Phase One deal is mixed, as you will in today's selections. For example:</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">WSJ:</strong><strong style="font-weight: bold">'The trade deal</strong> that President Trump announced with China on Friday isn’t VE Day, but it’s still welcome economic news.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">CSIS: ‘Pardon me </strong>if I don’t pop champagne.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">But welcome relief or waste of time,</strong> the deal does look pretty modest compared to the trade war’s original ambitions.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><em style="font-style: italic"><strong style="font-weight: bold">More inside.</strong></em><em style="font-style: italic"> Let me know what you think.</em></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">And as always,</strong> please <span style="color: #d0021b">forward</span> the China Macro Reporter to your friends and colleagues.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Best,</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Malcolm</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; height: 30px; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="auto" style="border-bottom: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 8px 40px 8px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;"> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Trade Deal: Pro &amp; Con &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</span></td></tr><tr><td width="40" height="auto" style="border-top: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/9EXsno?track_p_id=7cJu%40Uo36s5RGA_exUzwxdc" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/R2honJU3MXkzC1EUKtMivki__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/9EXsno?track_p_id=8VugOVbQf6s5RGA_Vuo1V6q" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Trump’s ‘Phase One’ China trade deal: 5 key takeaways&nbsp;</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Washington Post</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 0.8em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘China didn’t give up much.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The U.S. Trade Representative’s office</strong> released a short “<a href="https://ustr.gov/sites/default/files/US-China-Agreement-Fact-Sheet.pdf" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">fact sheet</a>” about the deal at 4:55pm on Friday.'<span style="color: #d0021b"></span><span style="color: #d0021b"><strong style="font-weight: bold">[You can read the “fact sheet” below]</strong></span></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Here are two of the five takeaways.</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br></p><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">1. ‘This is a modest deal.'&nbsp;</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'It’s called</strong> “phase one” for a reason.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Trump couldn’t get the big deal he promised,</strong> so he went with the easy stuff. It’s uncertain if there ever will be a phase two.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Trump says it will come</strong> after the 2020 presidential election, but much can change by then.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘What’s clear is Trump</strong> has&nbsp;<a href="https://www.washingtonpost.com/business/economy/trump-is-reshaping-us-trade-policy-but-not-at-the-scale-he-long-promised/2019/12/10/dcc6b254-1ab3-11ea-87f7-f2e91143c60d_story.html?tid=lk_inline_manual_9" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">not gotten China to fundamentally alter its economy</a>, as he promised.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘He launched the trade war </strong><a href="https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">in March 2018</a>&nbsp;by saying he wanted to reduce the trade deficit, stop the Chinese from stealing U.S. technology and secrets, and put an end to the Chinese government subsidizing major industries.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The phase one agreement</strong> does mean China is likely to buy close to $200 billion more of U.S. goods over the next two years (about half of which would be in agriculture), which should reduce the trade deficit.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But the deal does little</strong> to achieve Trump’s bigger goals.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Chinese leaders stress</strong> they will make changes on intellectual property at their own pace and that there is no commitment to scale back subsidies.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘President Xi Jinping’s</strong> “Made in China 2025” plan is still going forward at full speed.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br></p><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">2. ‘China didn’t give up much.'</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'The Chinese</strong> have long wanted to buy more American meat, crops and energy to fuel their growing economy and expanding middle class.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘That’s why China , </strong><a href="https://www.nytimes.com/2018/06/05/us/politics/china-trump-trade-tariffs.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">back in mid-2018</a>, offered to buy more of these goods in exchange for Trump holding off on tariffs.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Fast forward</strong> to the end of 2019, and that’s pretty much the deal Trump got.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Many were quick to blast Trump</strong> for not pressing China for more.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“The very fact</strong> that this is a ‘phase one’ deal is a reflection of utter defeat. Nothing gained but lukewarm purchases after 18 months of a costly trade war,”&nbsp;<a href="https://twitter.com/jmzbeijing/status/1205268845293793280?s=11" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">tweeted </a><strong style="font-weight: bold">James M. Zimmerman</strong>, the former chair of the American Chamber of Commerce in China.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘China did agree</strong> to finally open up to&nbsp;<a href="https://www.washingtonpost.com/business/economy/beijings-blockade-of-us-credit-card-companies-may-finally-end--now-that-chinese-companies-dominate/2019/01/20/d52d8ad4-1354-11e9-803c-4ef28312c8b9_story.html?tid=lk_inline_manual_18" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">U.S. banks and credit card companies</a>, so they can operate in China without needing to partner with a local firm.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But it’s likely China</strong> was ready to do this anyway now that its domestic banks are well-established and it wants more foreign investment.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The most substantive win</strong> for the White House is that if China fails to live up to its commitments, the United States is allowed to hit back with more tariffs and other penalties.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/4rBMS8?track_p_id=cpNOicZ4Xtbox5SErYE_E6p" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/EYofY-OFKco1BtKWpt6C3Ui__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/4rBMS8?track_p_id=dkSqMESs1ooXXI5SErYE_Xr" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">A U.S.-China Trade Detente</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Wall Street Journal</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">The Editorial Board</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 0.8em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">&nbsp;'Mr. Trump has done more to address Chinese cheating than any previous President.'</strong></h2><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">The Editorial Board of the Wall Street Journal</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'The trade deal</strong> that President Trump announced with China on Friday isn’t VE Day, but it’s still welcome economic news.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'This “phase one” pact</strong> doesn’t begin to settle all of the trade issues with China, and notably doesn’t include cybertheft or the Chinese telecom company <a href="https://quotes.wsj.com/CN/XSHE/002502" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">Huawei</a>.'&nbsp;</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'But it does step back</strong> from what could have been a bloody trade war that would damage both countries.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'As for China,</strong> the most significant concessions concern its predatory trade practices.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'China is promising</strong> to stop conditioning business licenses or other permits on tech transfers to joint-venture partners.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'China is also</strong> promising new protections against patent theft—notably requiring Chinese firms that inform a U.S. competitor if it is selling a product that includes technology that might infringe on the U.S. firm’s patent.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'Less impressive</strong> is China’s promise to lift restrictions on U.S. investment in financial services since China has been promising this for 20 years.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'In October,</strong> China committed to allowing foreigners to set up insurance subsidiaries and establish wholly-owned banks in the mainland.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight:bold">'China needs</strong> more competition in finance, so this concession is in its self-interest.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'Our sources say</strong> that China has committed to increasing U.S. exports in energy, manufacturing, agriculture and services by some $200 billion over the next two years.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'China imported</strong> $179 billion in U.S. goods and services last year, so this would represent an enormous increase.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'All of these are for now merely promises,</strong> and the problem with China trade is that Beijing and its state-protected industries routinely cheat. That makes the deal’s new dispute resolution process especially useful.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'Today</strong> when a U.S. company suffers an injury, it has no recourse but to appeal to the Chinese government. U.S. companies fear retaliation simply by speaking up.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'Businesses going forward</strong> will be able to consult the U.S. Trade Representative office, which would raise the complaints with Chinese officials for remedy.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'If the dispute can’t be settled,</strong> the U.S. can impose targeted slap-back tariffs.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'Mr. Trump</strong> has done more to address Chinese cheating than any previous President, and he is smart to step back and test if China will honor these new commitments.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'Trump is showing good faith</strong> in giving China a chance to show it can play by the rules of honest global trade.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/59LgmG?track_p_id=5u26Xg8JCexK_1qbSe423fS" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/LVEdRSpgxX4CbqTrlPycNEi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/59LgmG?track_p_id=ecb3UxU5XFY3gaz8JCexK_i" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Phase-One Deal Not Worth 'Stupid' Trade Conflict</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">CNBC</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Adam Posen | Peterson Institute for International Economics (PIIE)</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 0.8em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘It was a stupid exercise.’</strong></h2><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><a href="https://www.youtube.com/watch?v=dusUXiqHtlw" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Watch</strong></a> the video interview (2m)</h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">Adam Posen of PIIE</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Q: ‘What do you think</strong> of the Phase One trade deal? Do you think it was worth all the pain?’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">ADAM POSEN:</strong> ‘It was a stupid exercise.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘They went through</strong> a year and a half of unnecessary economic conflict to achieve almost nothing.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘I compare this</strong> to an economic Afghanistan - you spend a lot of blood and treasure with no clear war aim and no clear end game.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘So here we are,</strong> we're going to get some rhetoric about intellectual property rights; we're going to get back some soybean and pork purchases; and we will have achieved nothing.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘We’ve created an overhang</strong> for years to come about the U.S. is not supporting the trade regime the way it once was and is not able to push China.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘I think</strong> it's a terrible thing.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">Q: <strong style="font-weight: bold">‘Do you think we get a Phase Two,</strong> do you think that ever happens?’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">POSEN: ‘Ever’s a long time</strong>. Do we get to phase two before the election? No.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Do we get a meaningful Phase Two</strong> at some point early in the next president's term, whether it's Trump or someone else possibly?’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The hope,</strong> as some Democrats are expressing, is maybe if you line up with the EU and Japan and Australia and Canada, you might be able to push China on subsidies of state-owned enterprises.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘There is an actual deal</strong> to be had there. But this is all sideshow.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/5RW16O?track_p_id=daux23sUMukglZ9IFF4I_Sm" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/VcdAHHrWxK2Oai7z2r1MjUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/5RW16O?track_p_id=aUBo1pqG5kS9IFF4I_zTjMA" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">A Fragile and Costly U.S.-China Trade Peace&nbsp;</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Center for Strategic and International Studies (CSIS)</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Scott Kennedy | CSIS</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 0.8em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘Pardon me if I don’t pop champagne, but aside from a cessation of continued escalation, there is not much worth cheering.’</strong></h2><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">Scott Kennedy of CSIS</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Pardon me if I don’t pop champagne,</strong> but aside from a cessation of continued escalation, there is not much worth cheering.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Based on available information,</strong> in the short-term China and Xi Jinping are the clear winners.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘With only limited concessions,</strong> China has been able to preserve its mercantilist economic system and continue its discriminatory industrial policies at the expense of China’s trading partners and the global economy.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Trump could reverse course</strong> and renew tariffs, but Beijing has bought itself a likely respite from the daily uncertainty for at least a few months and perhaps for the remainder of Trump’s current term.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘President Trump can rightfully take credit</strong> for putting China and its economic system on the defensive and raising reasonable doubts about the historical U.S. approach toward China of patient multilateralism. This is no mean feat; yet by his administration’s own metrics, the trade war has not paid off.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Total U.S.-China</strong> trade and direct investment have slowed (see Figures 1 and 2), but these changes reflect the diversion of trade to others, not the movement of manufacturing back to the United States.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Moreover,</strong> far from abandoning its efforts to achieve technological independence, China is doubling down on what it calls “self-reliance.”</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The deal’s apparent big winners,</strong> farmers, were not in harm’s way before the trade war, and they likely would have sold just as much in aggregate to China had the trade war never commenced.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘More important</strong> than the immediate score are the long-term effects, and here, everyone fares poorly.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Beijing’s stubbornness and unpersuasive</strong> claims of victimhood have left most of the world agreeing with the U.S. analysis, if not policy approach, that its economic system is fundamentally unfair and needs to be heavily altered.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘In addition,</strong> the uncertainty from the extended tariff fight along with expanded export controls, investment restrictions, and steps against individual Chinese firms have sent everyone scrambling, accelerating the diversification of global supply chains away from China and likely hastening a broader effort by Western countries to limit technology sharing with the People’s Republic.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/SFbLVoxpf7Z5KMPhGt7zzTl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/PaHKobzZjC3VnrUPKP7EYTl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; height: 30px; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="auto" style="border-bottom: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 8px 40px 8px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;"> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;USTR 'Fact Sheet' &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</span></td></tr><tr><td width="40" height="auto" style="border-top: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/5jgLQW?track_p_id=byAMCknTkrYD9GO1Zm_T1oN" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/B9J8rg6p_n-JgOAHIWXBvUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/5jgLQW?track_p_id=8qlEauQaM9GO1Zm_YWZM12z" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">United States and China Reach Phase One Trade Agreement</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">United States Trade Representative</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 0.8em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.35em;background-color: #f6f6f6;font-weight:bold;"><span>Agreement Between the United States Of America<br>and the People’s Republic Of China </span><br><span style="display: inline-block; margin-bottom:0.5em; margin-top:0.5em;font-weight:normal; font-style:italic;">December 13, 2019</span><br><span style="margin-bottom:1em;">Fact Sheet</span></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The United States and China</strong> have reached an historic and enforceable agreement on a Phase One trade deal that requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">The Phase One agreement</strong> also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years. Importantly, the agreement establishes a strong dispute resolution system that ensures prompt and effective implementation and enforcement.</li><li style="margin-top: 0.5em;margin-bottom: 0em;">The United States has agreed to modify its Section 301 tariff actions in a significant way.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Information on specific chapters</strong> of the Phase One agreement is provided below:</p><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">Intellectual Property:</strong>&nbsp;</h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The Intellectual Property (IP)</strong> chapter addresses numerous longstanding concerns in the areas of trade secrets, pharmaceutical-related intellectual property, geographical indications, trademarks, and enforcement against pirated and counterfeit goods.</p><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">Technology Transfer:</strong>&nbsp;</h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The Technology Transfer chapter</strong> sets out binding and enforceable obligations to address several of the unfair technology transfer practices of China that were identified in USTR’s Section 301 investigation.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">For the first time in any trade agreement,</strong> China has agreed to end its long-standing practice of forcing or pressuring foreign companies to transfer their technology to Chinese companies as a condition for obtaining market access, administrative approvals, or receiving advantages from the government.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">China also commits</strong> to provide transparency, fairness, and due process in administrative proceedings and to have technology transfer and licensing take place on market terms.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Separately,</strong> China further commits to refrain from directing or supporting outbound investments aimed at acquiring foreign technology pursuant to industrial plans that create distortion.</li></ul><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">Agriculture:</strong>&nbsp;</h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The Agriculture Chapter addresses</strong> structural barriers to trade and will support a dramatic expansion of U.S. food, agriculture and seafood product exports, increasing American farm and fishery income, generating more rural economic activity, and promoting job growth.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">A multitude of non-tariff barriers</strong> to U.S. agriculture and seafood products are addressed, including for meat, poultry, seafood, rice, dairy, infant formula, horticultural products, animal feed and feed additives, pet food, and products of agriculture biotechnology.</li></ul><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">Financial Services:</strong>&nbsp;</h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The Financial Services chapter addresses</strong> a number of longstanding trade and investment barriers to U.S. providers of a wide range of financial services, including banking, insurance, securities, and credit rating services, among others.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">These barriers include</strong> foreign equity limitations and discriminatory regulatory requirements.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Removal of these barriers</strong> should allow U.S. financial service providers to compete on a more level playing field and expand their services export offerings in the Chinese market.</li></ul><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">Currency:</strong>&nbsp;</h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The chapter on Macroeconomic Policies and Exchange Rate Matters </strong>includes policy and transparency commitments on currency issues.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">The chapter addresses</strong> unfair currency practices by requiring high-standard commitments to refrain from competitive devaluations and targeting of exchange rates, while significantly increasing transparency and providing mechanisms for accountability and enforcement.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">This approach</strong> will help reinforce macroeconomic and exchange rate stability and ensure that China cannot use currency practices to unfairly compete against U.S. exporters.</li></ul><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">Expanding Trade:</strong>&nbsp;</h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The Expanding Trade chapter includes </strong>commitments from China to import various U.S. goods and services over the next two years in a total amount that exceeds China’s annual level of imports for those goods and services in 2017 by no less than $200 billion.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">China’s commitments</strong> cover a variety of U.S. manufactured goods, food, agricultural and seafood products, energy products, and services.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">China’s increased imports</strong> of U.S. goods and services are expected to continue on this same trajectory for several years after 2021 and should contribute significantly to the rebalancing of the U.S.-China trade relationship.</li></ul><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">Dispute Resolution:</strong>&nbsp;</h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The Dispute Resolution chapter sets forth</strong> an arrangement to ensure the effective implementation of the agreement and to allow the parties to resolve disputes in a fair and expeditious manner.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">This arrangement</strong> creates regular bilateral consultations at both the principal level and the working level.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">It also establishes strong procedures</strong> for addressing disputes related to the agreement and allows each party to take proportionate responsive actions that it deems appropriate.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; height: 30px; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="auto" style="border-bottom: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 8px 40px 8px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;"> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;China Official Comments &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</span></td></tr><tr><td width="40" height="auto" style="border-top: 7px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/61qfke?track_p_id=3MNb9C5W3S_LJtUZ1tKhp5S" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/yUDhnmGvtYZIocE2CyqlmEi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/61qfke?track_p_id=7ezbGEX39C5W3S_MLRdRCf1" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">China holding press conference on trade talks with the US</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong>PRC Ministry of Foreign Affairs</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">CNBC</strong></h3><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;/* border-bottom: 0px solid #c80000; */"><strong style="font-weight: bold">State Council Press Briefing</strong></h1><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><a href="https://www.cnbc.com/2019/12/13/china-is-awfully-quiet-amid-reports-it-has-agreed-to-phase-one-trade-deal-with-the-us-in-principle.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Watch</strong></a><strong style="font-weight: bold"></strong>the briefing in Chinese (41m)</h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><a href="https://www.youtube.com/watch?v=gXX2nZEcrPA" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Watch</strong></a> a short version dubbed in English</h3><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">CNBC: ‘</strong><a href="https://www.cnbc.com/china/" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">China</strong></a><strong style="font-weight: bold">&nbsp;was uncharacteristically quiet</strong> after news broke that the U.S. had agreed to a phase one trade deal in principle with the Chinese.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But that changed Friday morning</strong> when Chinese officials started a press conference regarding the trade talks.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘A notice to reporters</strong> had said China would discuss “issues on relevant progress of China-U.S. economic and trade consultation.”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The briefing</strong> was hosted by the State Council Information Office.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Chinese officials attending include</strong> Zheng Zeguang, vice minister of foreign affairs, Han Jun, vice minister of agriculture and rural affairs and Wang Shouwen, vice minister of commerce and deputy international trade representative.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘</strong><a href="https://www.cnbc.com/2019/12/12/stocks-are-set-to-add-to-thursdays-rally-as-us-and-china-near-signing-of-trade-deal.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">U.S. markets regained some steam</strong></a>&nbsp;once Chinese officials began speaking, saying they have agreed to the text in a trade deal with the U.S. and&nbsp;<a href="https://www.cnbc.com/2019/12/13/china-says-it-has-agreed-to-us-trade-deal-text-indicates-next-step-is-signing.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">indicated that the next step is signing a deal</a>.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br></p><h1 style="display: inline-block;font-size: 1.25em;margin-top: 0.25em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;border-bottom: 2px solid #c80000;"><strong style="font-weight: bold">Foreign Ministry Press Briefing</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">CNBC: ‘In a regular press briefing Friday,</strong> China’s Foreign Ministry spokesperson Hua Chunying said the Chinese “always insist consultations must be based on the principles of equality and mutual respect, and agreements must be mutually beneficial and win-win.”</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘She didn’t elaborate</strong> on the limited deal.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><a href="https://www.fmprc.gov.cn/web/fyrbt_673021/t1724372.shtml" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Ministry of Foreign Affairs.</strong></a><strong style="font-weight: bold"> Here is the</strong><a href="https://www.fmprc.gov.cn/web/fyrbt_673021/t1724372.shtml" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"> question and answer from briefing</a> translated from the Chinese:</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Q: “It is reported that today,</strong> Chinese Ambassador to the United States Cui Tiankai and US Trade Representative Lighthizer will sign the first-phase economic and trade agreement.&nbsp;Can you confirm?&nbsp;Has China agreed to purchase&nbsp;USD 50 billion of agricultural products in exchange for US tariff reductions?”</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Hua Chunying: “For details</strong> about China-US economic and trade negotiations, please contact the Commerce Department.”</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“I noticed</strong> that after the news that China and the United States were close to reaching the first stage of the economic and trade agreement, the three major US stock indexes and European stock markets generally rose.”</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“This again shows</strong> that the agreement reached between China and the United States through consultation is in the interests of both China and the United States and all parties, and is also the general expectation of the international community.”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">“China's position</strong> on China-US economic and trade consultations is consistent and clear.”</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“We are always committed</strong> to resolving and controlling differences between China and the United States through constructive dialogue.”</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“We always insist</strong> that consultations must be based on the principles of equality and mutual respect, and agreements must be mutually beneficial and win-win.”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div>

<div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="20" style="height:20px; font-size:0">&nbsp;</td></tr><tr><td style="vertical-align:top"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="padding-left:3.5%" a=""><a href="" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank" rel="noopener noreferrer" title="CHINADebate"><img width="100%" src="https://assets.website-files.com/5c864c33af62620dca1373ac/5d86577f82aa6e55afacb4ea_cd%20long-fit.png" alt="CHINADebate" style="width: 110px;"></a></td><td align="right" style="padding-right:3.5%"><a href="" target="_blank" rel="noopener noreferrer" style="color:#001544; font-size:13px; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;"></a></td></tr></tbody></table></td></tr><tr><td height="30" style="height:30px; font-size:0">&nbsp;</td></tr><tr><td style="text-align:center; line-height:1"><span style="font-size: 42px; font-family: gorditamedium, sans-serif; color:#0970b3; letter-spacing: -1px; line-height: 1;">China Macro Reporter</span></td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:30px; padding-top:10px;color:#001544; font-size:0.8125em; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;"><span style="color:#001544; font-size:13px; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;">by Malcolm Riddell<span style="margin:0 6px">·</span>Dec 11, 2019</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:20px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">Opening Statement</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/8VfatM?track_p_id=cdm5HKlDRXhAE5tdPaQ_UtD" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/4x73lYAycA6tlG4fEtV_j0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/8VfatM?track_p_id=ca4iV2I2xbFZm5tdPaQ_wIv" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">WTO: The Beginning of the End?&nbsp;</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h1 style="display: block;font-size: 1.5em;margin-top: 0.1em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">We have failed</strong> to adapt or just screwed up many of the international institutions that make up the world order.</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">If we have failed to adapt</strong>&nbsp;these institutions to the rise of China, new technologies, elite failure and populism's rise, and all the rest should we try now to rejig them or just scrap them (perhaps without institutional replacements) and return to what pessimists call the law of the jungle.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">It could be that the WTO,</strong> which has failed to adapt, may be on the latter route.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">We may mark December 11</strong> as the day WTO ceased to be an effective arbiter of trade disputes:</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">WSJ:</strong></p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Barring a last-minute reprieve, on Dec. 11</strong> the WTO’s trade court in Geneva will no longer have enough judges to issue binding rulings—because of vacancies and the Trump administration’s two-year effort to&nbsp;<a href="https://www.wsj.com/articles/trump-puts-the-wto-on-the-ropes-1531340083?mod=article_inline" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">block new appointments</a>. That will effectively cripple the institution.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘China and its rapid rise</strong> are <a href="https://www.wsj.com/articles/how-china-swallowed-the-wto-1509551308?mod=article_inline" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">central to the current stalemate</a>.&nbsp;Since Beijing joined in 2001, the trade court has struggled to apply its rules to the country’s state-driven capitalism, even as China emerged as the world’s largest exporter and became the WTO’s most disruptive member—often accused of flouting the WTO while pursuing cases against other members.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">hinrich foundation:&nbsp;&nbsp;</strong></p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘As China’s economic might</strong> continues to grow, the incompatibilities between its system and the assumptions about how trade would be conducted under a WTO rules-based system are coming into sharper relief.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘WTO rules</strong> – at least as currently constituted – have proven incapable of satisfactorily adjudicating these systemic frictions and incompatibilities.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Much of the trade dysfunction</strong> we are witnessing today – especially between the United States and China – is the consequence of the poor job we’ve done in developing rules and protocols to manage the acute points of philosophical and systemic divergence.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">My time as a U.S. delegate to the UN</strong> made me a skeptical supporter of international institutions.&nbsp;</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Skeptical</strong> because I questioned the resolve of member governments to step up to solve problems through the institutions.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">And a supporter</strong> because I could see no other way.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Today</strong> skepticism wins.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Much more inside.</strong> Let me know what you think.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">And as always,</strong> please <span style="color: #d0021b"><strong style="font-weight: bold">forward</strong></span> to your friends and colleagues.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Best,</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Malcolm</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">1. ‘Front &amp; Center’</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="20" style="border-bottom: 12px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 0px 40px 0px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;">USMCA versus Phase 1</span></td></tr><tr><td width="40" height="20" style="border-top: 12px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/5QZ9ZQ?track_p_id=3z6G8Yp88s_B11pZKHjQocy" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/qAD7kBqLceF6aukL4-Brm0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/5QZ9ZQ?track_p_id=5I%40vUc8Yp88s_g3Io5SoKef" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">USMCA “trumps” China</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">American Enterprise Institute</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Derek Scissors</strong> | AEI</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘Time to move on to better trade partners.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The likely ratification</strong> of the United States-Mexico-Canada agreement (USMCA) means we should discard a wildly overhyped deal with China in favor of the long process of expanding USMCA.'</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘A key contribution of USMCA</strong> is&nbsp;<a href="https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/Text/32_Exceptions_and_General_Provisions.pdf" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">Article 32.10</a>, which provides the option of locking out non-market economies.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It discourages</strong> any party from signing false “free trade” agreements with countries that do not allow open competition or full property rights and therefore cannot trade freely.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘This is obviously</strong> and correctly aimed at China.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘At the same time</strong> the Trump administration correctly pushed for a USMCA clause targeting China, it has sought a supposedly important trade deal with Beijing.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The seeming inconsistency</strong> is explained by the fact that the&nbsp;<a href="https://www.ft.com/content/07c0d99c-0706-11ea-a984-fbbacad9e7dd" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">“phase 1” agreement</a> with China is largely meaningless, unless you’re a stock market investor worried about triggering a sell-off.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘USMCA is bigger</strong> —&nbsp;<a href="https://www.bea.gov/data/intl-trade-investment/international-trade-goods-and-services" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">our top two</a>&nbsp;trading partners versus number three.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘USMCA improves</strong> intellectual property protection while the protection in phase 1 doesn’t cover the Chinese government’s theft and coercion, because&nbsp;<a href="https://news.bloomberglaw.com/ip-law/china-denies-accusations-of-stealing-us-intellectual-property" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">Beijing denies those occur</a>.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘USMCA improves</strong> agriculture market access for American farmers indefinitely while Chinese agriculture purchases in 2021 and beyond can’t be reliably guaranteed in phase 1.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘And a China deal</strong> leads nowhere.’’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Because it’s not ratified by Congress,</strong> phase 1 can be reversed at any time.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Illustration:</strong> the pledged increase in market access in financial services helps money head to China, a goal unlikely to be shared by any Democrat.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The expected rollback</strong> of American tariffs reduces Beijing’s incentives to go any further — there&nbsp;<a href="https://www.reuters.com/article/us-usa-trade-china-phasetwo/no-phase-two-u-s-china-deal-on-the-horizon-officials-say-idUSKBN1XZ00H" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">won’t be a substantial phase 2</a>.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The deal</strong> is primarily to reassure a stock market which has soared over the past decade.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It has no long-term value</strong> to the American economy – that can only come with meaningful Chinese reform.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘USMCA</strong> might bring such reform a bit closer, by limiting today’s China in lucrative markets.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Phase 1</strong> just clears the path for more of the same from Beijing.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Time to move on</strong> to better trade partners.’’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="20" style="border-bottom: 12px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 0px 40px 0px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;">WTO</span></td></tr><tr><td width="40" height="20" style="border-top: 12px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/5ijTtY?track_p_id=7x6VYqH37qua6g_U2FMjWsZ" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/5ijTtY?track_p_id=abCKZG3EwzC7qua6g_wO4di" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Will the U.S. Bring Down the WTO?</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Wall Street Journal</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">'By depriving the world’s trade court of new judges, the Trump administration may succeed in paralyzing the institution.'</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Barring a last-minute reprieve, on Dec. 11</strong> the WTO’s trade court in Geneva will no longer have enough judges to issue binding rulings—because of vacancies and the Trump administration’s two-year effort to&nbsp;<a href="https://www.wsj.com/articles/trump-puts-the-wto-on-the-ropes-1531340083?mod=article_inline" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">block new appointments</a>.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘That will effectively</strong> cripple the institution.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The WTO impasse</strong> hasn’t rattled markets the way that the U.S.-China trade war has, but its potential&nbsp;<a href="https://www.wsj.com/articles/risks-from-the-wtos-new-power-vacuum-1512921601?mod=article_inline" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">impact is broader</a>, upending decades of U.S. trade policy.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Messrs. Trump and Lighthizer</strong> prefer a more unilateral approach, with the WTO sidelined or defanged, in order to better leverage American economic might.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘To internationalists</strong> who built the old order, “it’s tragic,” says Carla Hills, who helped to launch the WTO when she held Mr. Lighthizer’s position under President George H.W. Bush. “You’ll replace rule of law with rule of the jungle.”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Though the WTO</strong> won’t disband its court on Dec. 11 or stop making initial rulings, it will lack the judges needed to decide on new appeals: Three are required for such rulings, but only one will be left on the seven-member appeals panel.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Countries that lose</strong> their cases can simply refer them to the inoperative panel and carry on their trade practices as before.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘China and its rapid rise</strong> are <a href="https://www.wsj.com/articles/how-china-swallowed-the-wto-1509551308?mod=article_inline" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">central to the current stalemate</a>.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Since Beijing joined in 2001,</strong> the trade court has struggled to apply its rules to the country’s state-driven capitalism, even as China emerged as the world’s largest exporter and became the WTO’s most disruptive member—often accused of flouting the WTO while pursuing cases against other members.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0;border-top:1px solid #ddd;"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/60toDg?track_p_id=5Fprd36cq5FO_JlzDusDiA6" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/60toDg?track_p_id=44DqV6cq5FO_oZJt5EPKLgi" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">How China Swallowed the WTO</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Wall Street Journal</strong></h3><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Most countries</strong> combine their WTO diplomatic corps with delegations to other global bodies in Geneva.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Beijing built</strong> a mammoth stand-alone “Permanent Mission of the People’s Republic of China to World Trade Organization” about a mile up the shore of Lake Geneva, flying the large red flag with yellow star.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The Chinese government</strong> was at first shy about using the WTO courts, modeled after the unfamiliar Western legal system, and filed just one complaint in its first five years after joining.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But the surge in Chinese exports</strong> following its WTO entry, which suddenly made it the world’s largest exporter, thrust Beijing into the center of the legal system.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Since 2007,</strong> China has been party to more than a quarter of all WTO cases, as trading partners scrambled to erect barriers protecting their industries while demanding better access to China’s markets.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Beijing’s lawyers</strong> started notching notable court wins over the Americans who shaped the system.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘In a series of rulings</strong> from 2011 through May 2017, the appellate body concluded that Washington had cut too many corners in asserting that the state underwrites Chinese exports.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Those decisions,</strong> covering four dozen industries, from off-road tires to wind towers to, literally, kitchen sinks, raised the bar for U.S. policy makers trying to block Chinese imports.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘And they complicated American efforts</strong> to impose higher duties on Chinese goods.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The losses rankled</strong> the Washington trade community.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘In May 2016,</strong> aides to then-President Barack Obama cited two rulings favoring China as part of a broader list of grievances designed to block the reappointment of a South Korean judge on the appellate body.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It was seen as a surprisingly hostile </strong>act in the genteel Geneva community. Thirteen veteran WTO jurists complained the U.S. had traversed “a Rubicon that must not be crossed,” putting “the very future of the entire WTO trading system at risk.”&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The Trump administration</strong> has escalated the Obama administration’s battle over the appellate body, blocking appointments of any new judges and sparking fights even with members sympathetic to the U.S. campaign against China.’&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/C4eMhiS1Jyy_bnRO_aZ4Ujl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/6J48Xo?track_p_id=6NA3VGV8SIxRe_cozO3si32" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/QIRL1tYIFC-rHH2ftRq920i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/6J48Xo?track_p_id=aHRZUxGVkiE8SIxRe_csBIk" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">WTO Reform: Will China Be Part of the Problem or Part of the Solution?</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">hinrich foundation</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Steve Olson | </strong>hinrich foundation</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘As China’s economic might continues to grow, the incompatibilities between its system and the assumptions about how trade would be conducted under a WTO rules-based system are coming into sharper relief.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘As China’s economic might</strong> continues to grow, the incompatibilities between its system and the assumptions about how trade would be conducted under a WTO rules-based system are coming into sharper relief.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘WTO rules</strong> – at least as currently constituted – have proven incapable of satisfactorily adjudicating these systemic frictions and incompatibilities.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Although the challenge</strong> is broader then reconciling China’s trade system to global trade rules, the WTO reform process cannot succeed unless all involved parties explicitly acknowledge and address the systemic tensions that have been brought to the forefront as a result of China’s economic rise.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Much of the trade dysfunction</strong> we are witnessing today – especially between the United States and China – is the consequence of the poor job we’ve done in developing rules and protocols to manage the acute points of philosophical and systemic divergence.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/6bESrw?track_p_id=3tcr7hKLPy_agiy%403Nvvg12" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/TiISon2f36FD5_ms-2WONki__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/6bESrw?track_p_id=6b34VEl7hKLPy_zGoSwcCcH" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Go Deeper on WTO Appellate Dispute Settlement Crisis&nbsp;</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The Peterson Institute on International Economics </strong>has produced a lot of analyses about the WTO appellate dispute settlement crisis.</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><a href="https://www.piie.com/publications/policy-briefs/dispute-settlement-crisis-world-trade-organization-causes-and-cures" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">The Dispute Settlement Crisis in the World Trade Organization: Causes and Cures</a></li><li style="margin-top: 0.5em;margin-bottom: 0em;"><a href="https://www.piie.com/publications/policy-briefs/wtos-existential-crisis-how-salvage-its-ability-settle-trade-disputes" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">The WTO's Existential Crisis: How to Salvage Its Ability to Settle Trade Disputes</a></li><li style="margin-top: 0.5em;margin-bottom: 0em;"><a href="https://www.piie.com/commentary/testimonies/can-we-save-wto-appellate-body" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">Can We Save the WTO Appellate Body?</a></li><li style="margin-top: 0.5em;margin-bottom: 0em;"><a href="https://www.piie.com/blogs/trade-and-investment-policy-watch/us-china-trade-disputes-wto-usually-sides-united-states" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">In US-China Trade Disputes, the WTO Usually Sides with the United States</a></li><li style="margin-top: 0.5em;margin-bottom: 0em;"><a href="https://www.piie.com/blogs/trade-investment-policy-watch/eu-proposals-resolve-wto-appellate-body-crisis-represent-partial" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">EU Proposals to Resolve the WTO Appellate Body Crisis Represent Partial Progress</a></li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="20" style="border-bottom: 12px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 0px 40px 0px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;">Trade Tensions &amp; Financial Markets</span></td></tr><tr><td width="40" height="20" style="border-top: 12px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/6tOnC4?track_p_id=24m5xOb3m_P3WJXRHCBvVnJ" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/-K8zDxoSS0xfT-QqzNOayUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/6tOnC4?track_p_id=5cjv2K5xOb3m_h4OxWkjdDH" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">BIS Quarterly Review, December 2019</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Bank forInternational Settlements</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Claudio Borio | </strong>BIS</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘During the latest quarter, it was the ebb and flow of trade tensions that dominated.’</strong></h2><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><a href="https://www.bis.org/publ/qtrpdf/r_qt1912.htm" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Read</strong></a> the Bank for International Settlements <strong style="font-weight: bold">‘BIS Quarterly Review, December 2019’</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The previous quarter</strong> saw financial markets torn between two forces’:</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Trade tensions</strong> pushed them down;’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Monetary policy easing</strong> pushed them up.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘During the latest one, </strong>it was the ebb and flow of trade tensions that dominated.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘To be sure,</strong> further monetary easing continued to support risky assets, and so did signs later in the period that recession concerns might have been overdone.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But it was the easing of trade</strong> tensions between the United States and China in mid-October that defined a regime shift in markets.’’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Until that point,</strong> the prices of risky assets had been range-bound; thereafter, a risk-on phase took hold.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Equity prices rose,</strong> the VIX - a gauge of risk aversion - fell to new lows, corporate spreads narrowed, yields on safe sovereign bonds edged up and the US dollar depreciated, supporting valuation gains in emerging market economies in particular.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘This meant that aggregate financial conditions</strong> in the United States and the euro area loosened and ended up easy by historical standards.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘In fact,</strong> they were at least as easy as in October 2018: it was then that they had started to become tighter, as market participants began to worry about a darkening macroeconomic outlook and the possibility that the Federal Reserve might not ease in response.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">2. ‘Keep an Eye On’</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="20" style="border-bottom: 12px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 0px 40px 0px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;">Pork &amp; Monetary Policy</span></td></tr><tr><td width="40" height="20" style="border-top: 12px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/7BZ7WC?track_p_id=3g637DSHpW_VkNoGSnJ%40Teq" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/zxbyrGBKPhFFZLzMYqfYnUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/7BZ7WC?track_p_id=3FWA7DSHpW_gSltvYwE3CG%40" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">China squeezed by high inflation and falling producer prices</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Financial Times</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘Soaring consumer inflation, powered by runaway pork prices, and falling raw material prices that pointed to weak industrial demand, are limiting China’s policy tools to fight the economic downturn.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘A surge in China’s consumer inflation</strong> to a seven-year high coupled with a decline in the producer price index are squeezing Beijing’s options to ease monetary policy.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The official consumer price index </strong>rose to 4.5 per cent in November, according to the National Bureau of Statistics, while the PPI fell 1.4 per cent, its fifth consecutive month of decline.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Analysts said</strong> soaring consumer inflation, powered by runaway pork prices, and falling raw material prices that pointed to weak industrial demand, were limiting China’s policy tools to fight the economic downturn.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The main driver</strong> of consumer inflation is pork prices, which jumped 110 per cent last month as African Swine Fever swept through China’s hog herds.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Swine fever</strong> is adding to the uncertainty surrounding China’s monetary policy, which is based in part on the inflation level.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The People’s Bank of China</strong> had been slow in cutting interest rates largely out of concerns over pork inflation said Zhou Hao of Commerzbank.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“The PBoC</strong> will be more cautious to ease monetary policy if pork prices exceed their previous high by a significant margin,” said Mr Zhou.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">3. ‘Below the Radar’</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="20" style="border-bottom: 12px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 0px 40px 0px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;">State Capitalism by any other name...</span></td></tr><tr><td width="40" height="20" style="border-top: 12px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/7TjRqK?track_p_id=9Q5aOZZXjb5gVW18_gMZfuV" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/dIOY3C9W8ZcGGK9O7T4q0ki__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/7TjRqK?track_p_id=dQVruOabe5KmBl5gVW18_Wp" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Mutuality with Chinese Characteristics</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">China Europe International Business School (CEIBS)</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘China often blurs the distinctions between the roles and responsibilities of private companies, government institutions and non-profits, in a deliberate attempt to build a modern socialist society.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">State capitalism</strong> by any other name...</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Economics of Mutuality (EoM)</strong> is&nbsp;a business innovation that helps companies to identify profitable avenues of growth by solving the problems of people and planet.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The EoM model</strong> introduces practical metrics for companies to measure and manage their&nbsp;natural,&nbsp;human&nbsp;and&nbsp;social&nbsp;capitals in addition to the traditionally emphasized&nbsp;financial&nbsp;capital.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Unlike western democracies</strong> that tend to differentiate the roles and responsibilities of private companies, government institutions and non-profits, China often blurs the distinctions in a deliberate attempt to build a modern socialist society.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Accordingly, “mutuality with Chinese characteristics”</strong> can be seen in the guise of state-owned enterprises (SOEs) that actively implement government policy while simultaneously seeking profits; charities and non-government organizations (NGOs) that are closely supervised and even staffed by government officials; and private companies that open new lines of business at the direct behest of government officials.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Overall, the Chinese government</strong> plays an important role in allocating resources and prioritizing various capital deficiencies (e.g., foreign currency, jobs, clean air, health care) for immediate development.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Five year plans (FYP)</strong> communicate the constantly evolving targets to local government officials, businesses and citizens, who eventually must deliver the results by means of collective action.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Aligning with FYP priorities</strong> may bring companies access to important markets &amp; projects, government funding, and various permits and operational licenses.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Companies pursuing</strong> mutually beneficial strategies struggle with issues of control, independence and alignment of short term financial and operational targets with those of local government leaders who can facilitate or hinder their progress.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Furthermore,</strong> government policies and incentives are subject to change on short notice, altering a program’s attractiveness or financial returns.&nbsp;</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Companies</strong> can expect surges, hiccups, reversals and retreats as Chinese priorities shift to meet emerging realities, and government leaders move to block the unintended exploitation of development programs by unscrupulous market players.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘In most cases,</strong> it is also necessary to gain the support of local NGOs to mitigate the challenges of goal alignment and coordination, and to smooth the process of program implementation.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Though charities</strong> and other non-profits are typically non-governmental in other parts of the world, in China they are subject to strong oversight and influence.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Most charities</strong> and non-profits operating in China are small, under-funded, and/or limited in capabilities.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The most professional</strong> and competent NGOs are therefore those with close governmental ties.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Often referred to as GONGOs</strong> (Government-Organized Non-Governmental Organizations), these organizations tend to focus on the needs of specific beneficiary groups (e.g., All China Women’s Federation and China Youth Development Foundation) or national development targets (e.g., China Foundation for Poverty Alleviation).’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;"> ‘Explainers’</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width: 600px; width: 100%; margin: 0 auto; padding: 0px; background-color: #001544; text-align: center;"><tbody><tr><td width="40" height="20" style="border-bottom: 12px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td><td rowspan="2" height="40px"><span style="font-family: Georgia, serif; padding: 0px 40px 0px 0px; font-size: 1.2em; font-weight: 900; color: #ffffff; line-height: 1.25em; letter-spacing: -0.1px; font-style: italic; text-transform: none;">Trump Trade Policy</span></td></tr><tr><td width="40" height="20" style="border-top: 12px solid #c80000;"><p style="font-size: 0px;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/7ltmAS?track_p_id=8xQJVschZ8pN5cE_b%40ia4Yl" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/Q7K3LvBpUHwYzkoXdXm2WUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/7ltmAS?track_p_id=ewHeNXbgLXs%40JUd8pN5cE_R" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">How Trump's Trade War Went From Method to Madness</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Bloomberg</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><a href="https://www.youtube.com/watch?v=6OD8LIqllwg" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Watch</strong></a> the video (13m 38s)</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘The model, though, didn’t account for the unpredictability of Trump.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom:0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Not long ago</strong> we flagged Bloomberg’s <a href="https://www.bloomberg.com/news/features/2019-11-14/how-trump-s-trade-war-went-from-method-to-madness" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">‘How Trump's Trade War Went From Method to Madness’</a> as a <em style="font-style: italic">must read</em>.</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">You’ve read the article,</strong> now see the movie. From must read to <em style="font-style: italic">must watch</em>.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">The video goes beyond the article</strong> with snippets from experts such as Derek Scissors of AEI and Wendy Cutler, former Acting Deputy U.S. Trade Representative, now with the Asia Society Policy Institute.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><em style="font-style: italic"><strong style="font-weight: bold">From the article:</strong></em></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘It started with a carefully calibrated trade weapon,</strong> an algorithm that spat out a list of targets for an assault on China ordered up by a U.S. president determined to rebalance the relationship between the world’s two biggest economies.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The goal:</strong> building leverage for negotiations aimed at forcing wholesale changes in China’s economic architecture while limiting the pain to businesses and consumers at home.’’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The model,</strong> though, didn’t account for the unpredictability of Trump.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Behind closed doors,</strong> the president took the modest number—equal to 7% of the $505 billion in goods the U.S. imported from China in 2017—almost as an affront. He didn’t want moderate or appropriate.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘He grumbled to aides</strong> the figure was too low and demanded it be rounded up to at least $50 billion.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Trump also asked his staff,</strong> almost as an aside: “Do you think I should put tariffs on everything from China?”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div>

<div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="20" style="height:20px; font-size:0">&nbsp;</td></tr><tr><td style="vertical-align:top"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="padding-left:3.5%" a=""><a href="" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank" rel="noopener noreferrer" title="CHINADebate"><img width="100%" src="https://assets.website-files.com/5c864c33af62620dca1373ac/5d86577f82aa6e55afacb4ea_cd%20long-fit.png" alt="CHINADebate" style="width: 110px;"></a></td><td align="right" style="padding-right:3.5%"><a href="" target="_blank" rel="noopener noreferrer" style="color:#001544; font-size:13px; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;"></a></td></tr></tbody></table></td></tr><tr><td height="30" style="height:30px; font-size:0">&nbsp;</td></tr><tr><td style="text-align:center; line-height:1"><span style="font-size: 42px; font-family: gorditamedium, sans-serif; color:#0970b3; letter-spacing: -1px; line-height: 1;">China Macro Reporter</span></td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:30px; padding-top:10px;color:#001544; font-size:0.8125em; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;"><span style="color:#001544; font-size:13px; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;">by Malcolm Riddell<span style="margin:0 6px">·</span>Dec 7, 2019</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:20px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">Opening Statement</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/4hhBq4?track_p_id=aXWzlGORIMk6OioZi_lbfdS" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/4x73lYAycA6tlG4fEtV_j0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/4hhBq4?track_p_id=a6XCnVGrngV6OioZi_VtLna" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Is the Pentagon Exaggerating the China Military Threat?</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h1 style="display: block;font-size: 1.5em;margin-top: 0.1em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">At one point in Fareed Zakaria’s ‘The New China Scare’</strong> he begs the question: does the Pentagon aim to label China an enemy to justify larger budgets?:</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">I am embarrassed</strong> to say that I hadn’t considered the possibility.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Then right afterwards,</strong> I read an article from the MIT Tech Review, which argues:</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'There is a number</strong> that floats around Washington, DC, circles about how much the Chinese government is projected to spend on AI: $70 billion by 2020, up from an estimated $12 billion in 2017.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'The figure</strong> was originally&nbsp;<a href="https://www.military.com/defensetech/2018/07/30/china-leaving-us-behind-artificial-intelligence-air-force-general.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">shared in a speech by</a> a top US Air Force general in 2018, but where it comes from is something of a mystery.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'Nonetheless,</strong> it has helped fan a deep-seated fear within the policy community that the US is sorely losing in the so-called AI arms race.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The article mentioned</strong> 'the report that underscores the amount of exaggeration and fear-mongering dominating DC’s conversations around AI strategy.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">So I read the report </strong>by the Center for Security and Emerging Technology at Georgetown University that persuasively if inconclusively shows that the amount of China’s AI spending cited by the General is wrong.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">I next read another article</strong> mentioned by the MIT Tech Review: ‘The Pentagon Is Using China to Scare Tech Companies Into Working With the Military.’ It noted:</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Secretary of Defense Mark Esper,</strong> who recently spoke at the National Security Commission on Artificial Intelligence conference in Washington, D.C., said that whether or not Silicon Valley chooses to work on U.S. defense projects could decide the future world order.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">All he needed </strong>was an Uncle Sam needs you poster.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">I am skeptic</strong> of the government with a soft spot for the military and intelligence communities. That said, I am certainly aware of the machinations surrounding the budget processes in those communities.</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">So these articles</strong> have at least made me alert to the possiblity of efforts to manipulate China policy for bureaucratic ends. If right, not surprising.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">With that my attention turned</strong> to U.S. national security policy itself. The articles I especially liked are included here, including a speech by Ambassador Robert Zoellick, where he said:</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘A slide into Sino-American conflict</strong>—whether intentionally or by accident—would lead to incalculable costs and dangers.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The 20th Century</strong> painted a shocking picture of industrial age destruction.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Do not assume that the cyber era</strong> of the 21st Century is immune to crack-ups or catastrophes of equal or even greater scale.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Which certainly puts</strong> manipulation of China policy for bureaucratic ends in sobering perspective.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Let me know</strong> what you think.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">And as always please forward</strong> the <em style="font-style: italic">China Macro Reporter</em> to your friends and colleagues.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Best</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Malcolm</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;"> ‘Explainers’</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#fff; font-family:Georgia, serif; padding:10px 0 10px 20px; border-bottom:1px solid #efefef; text-align:left; font-size: 1.175em; font-weight:700; color: #c80000; line-height:1.5em; letter-spacing:-0.1px; font-style:italic;text-transform: capitalize;">1. Is the Pentagon Exaggerating the China Military Threat? </span></td></tr><!--- end BLUE_BOX ---></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/4zrWAC?track_p_id=8xnXZg3ZY8BHqms_p4uQiY%40" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/2P2LxiV-sg54VayqL9X2F0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/4zrWAC?track_p_id=d1bKL1WXt%40pFns8BHqms_6O" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Why the Pentagon Wants China as an Enemy</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Foreign Affairs</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Fareed Zakaria</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘To make an enemy of China is to return to the halcyon days of the Cold War, when the Pentagon could raise large budgets.'</strong></h2><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">From Fareed Zakaria’s long-read </strong><a href="https://www.foreignaffairs.com/articles/china/2019-12-06/new-china-scare" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">‘The New China Scare:Why America Shouldn’t Panic About Its Latest Challenger’</strong></a></h3><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The Pentagon</strong> has embraced the notion of China as the United States’ top “strategic competitor.” From a bureaucratic point of view, this designation makes perfect sense.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘For the last 20 years</strong>, the U.S. military has fought against insurgencies and guerrillas in failed states, and it has time and again had to explain why its expensive machinery has failed against these underequipped, cash-strapped enemies.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘To make an enemy of China</strong>, by contrast, is to return to the halcyon days of the Cold War, when the Pentagon could raise large budgets by conjuring the specter of a war against a rich, sophisticated military with cutting-edge technology of its own.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘All the while,</strong> the logic of nuclear deterrence and the prudence of the great powers ensured that a full-scale war between the two sides would never take place.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Yet whatever the advantages for Pentagon budgets,</strong> the costs of such a cold war with China would be immense, distorting the United States’ economy and further inflating the military-industrial complex that U.S. President Dwight Eisenhower once warned against.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/5I1qUK?track_p_id=2YT7BTQAI_LWBKQWQrbjwze" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/c_SiTkiGen_SsT6cnw5F6Ei__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/5I1qUK?track_p_id=3R1F7BTQAI_JvKB55nJRYLg" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Us Military Spending Down Since 2010, But Continues To Lead The World</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Brookings</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">“We are a long way off from the burdensome arms races of the Cold War period.”</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘In their report “Managing the New Threat Landscape,”</strong> Bruce Jones, Charles T. Call, and Daniel&nbsp;Toubolets outline the global trends in military spending. While American spending has decreased since 2010,&nbsp;and&nbsp;<a href="https://www.brookings.edu/wp-content/uploads/2018/09/FP_20180919_prevention_agenda1.pdf" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">China has substantially increased its military expenditures</a>, U.S. military spending continues to outpace the world.’&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">“China and the United States</strong> are a long way off from&nbsp;parity&nbsp;but the directionality is clear,” the authors write.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">“Future increases</strong> in the U.S. and Chinese defense budgets would herald a shift [in total global expenditures].’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘But we are a long way off</strong> from the burdensome arms races of the Cold War period.”</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/-LEQGsKbbrB_kOU5cGVuXjl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff; border-top:1px solid #c80000;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#fff; font-family:Georgia, serif; padding:10px 0 10px 20px; border-bottom:1px solid #efefef; text-align:left; font-size: 1.175em; font-weight:700; color: #c80000; line-height:1.5em; letter-spacing:-0.1px; font-style:italic;text-transform: capitalize;">2. Is the Pentagon Exaggerating China's AI threat</span></td></tr><!--- end BLUE_BOX ---></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/5aCAoS?track_p_id=7VXPWM2Q6ifPVm_3ddbNBWq" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/J6Ju_10_jOTlqNM6_vjMj0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/5aCAoS?track_p_id=6kRzrNO6ifPVm_OwagSxITi" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Yes, China is probably outspending the US in AI—but not on defense</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">MIT Technology Review</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">'The report underscores the amount of exaggeration and fear-mongering dominating DC’s conversations around AI strategy.'</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><em style="font-style: italic"><strong style="font-weight: bold">“China has also published</strong></em><em style="font-style: italic"> an action plan for promoting development of a new generation of artificial intelligence and technology industry.”</em></p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><em style="font-style: italic"><strong style="font-weight: bold">“This is one of their main efforts</strong></em><em style="font-style: italic"> that was cited in the 19th Additionally, they recently announced they want to be the global leader in technology by 2030, with a domestic industry boasting $150 billion in cash.”</em></li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><em style="font-style: italic"><strong style="font-weight: bold">“Just to put this number into perspective,</strong></em><em style="font-style: italic"> we estimate the total spending for artificial intelligence systems in China for 2017 was $12 billion.”</em></p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><em style="font-style: italic"><strong style="font-weight: bold">“We also estimate</strong></em><em style="font-style: italic"> it will grow to at least $70 billion by 2020.”</em></li></ul><h3 style="text-align: center;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h3 style="text-align: center;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Speech by Lieutenant General VeraLinn “Dash” Jamieson to the Air Force Association</strong></h3><p style="text-align: center;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;_________________________________________</p><p style="text-align: left;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><a href="https://www.technologyreview.com/s/614842/china-us-ai-military-spending/" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">MIT Technology Review</strong></a><strong style="font-weight: bold">: 'There is a number</strong> that floats around Washington, DC, circles about how much the Chinese government is projected to spend on AI: $70 billion by 2020, up from an estimated $12 billion in 2017.</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'The figure</strong> was originally&nbsp;<a href="https://www.military.com/defensetech/2018/07/30/china-leaving-us-behind-artificial-intelligence-air-force-general.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">shared in a speech by</a> a top US Air Force general in 2018, but where it comes from is something of a mystery.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'Nonetheless,</strong> it has helped fan a deep-seated fear within the policy community that the US is sorely losing in the so-called AI arms race.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'As the narrative goes,</strong> China is greatly outspending the US not only in total research, but specifically in&nbsp;<a href="https://thehill.com/opinion/cybersecurity/455484-america-is-in-an-ai-fight-for-its-life" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">military AI</a>.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'If the US does not</strong> make aggressive moves to catch up, the country—and democracy—will be doomed.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'But&nbsp;</strong><a href="https://cset.georgetown.edu/wp-content/uploads/Chinese-Public-AI-RD-Spending-Provisional-Findings-1.pdf" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">new estimates</strong></a>&nbsp;from the Center for Security and Emerging Technology (CSET) show that China is likely spending far less on AI than previously assumed.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'Additionally,</strong> most of its AI money seems to be going to non-military-related research, such as fundamental algorithm development, robotics research, and smart-infrastructure development.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'By contrast,</strong> the US’s planned spending for fiscal year 2020 allocates the majority of its AI budget to defense, which means it could possibly outspend China in that category.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'In other words,</strong> the numbers directly oppose the prevailing narrative.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'The report underscores</strong> the amount of exaggeration and fear-mongering dominating DC’s conversations around AI strategy.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'As OneZero&nbsp;</strong><a href="https://onezero.medium.com/the-pentagon-is-using-china-to-scare-tech-companies-into-working-with-the-military-d788f58ff4a6" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">reported</strong></a> from this year’s National Security Commission on Artificial Intelligence conference, it has even become a primary tool for the Pentagon to recruit help from tech companies.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">'But experts have&nbsp;</strong><a href="https://www.wired.com/story/cold-war-analogies-are-warping-tech-policy/" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">warned</strong></a>&nbsp;that this attitude could ultimately hurt US AI development by focusing too much on military AI and too little on more fundamental research.’</p><h2 style="display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><span style="color: #d0021b"><em style="font-style: italic"><strong style="font-weight: bold">More below</strong></em></span><span style="color: #d0021b"><em style="font-style: italic"> on the reports from the Center for Security and Emerging Technology and OneZero.</em></span></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/L4GADf9rVhTFx0uF-UvrOjl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/5sMV8a?track_p_id=dpvey1GEbVPyi35NqfGQ_TR" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/4wTzPdpMV6PCXX2jfiGYTUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/5sMV8a?track_p_id=5XWgH%405NqfGQ_qboDsWfGxV" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">'Chinese Public AI R&amp;D Spending: Provisional Findings'</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Center for Security and Emerging Technology | </strong>Georgetown University</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘China’s government probably isn’t dramatically outspending the U.S. government on AI R&amp;D.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘China aims</strong> to become “the world’s primary AI innovation center” by 2030.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Toward that end,</strong> the Chinese government is spending heavily on AI research and development (R&amp;D).’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But China’s government</strong> probably isn’t dramatically outspending the U.S. government on AI R&amp;D.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘We assess</strong> with low to moderate confidence that China’s public investment in AI R&amp;D was on the order of a few billion dollars in 2018.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Our results indicate</strong> that China’s spending in 2018 was on the same order of magnitude as U.S. planned spending for FY 2020.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘With higher confidence,</strong> we assess that China’s government is not investing tens of billions of dollars annually in AI R&amp;D, as some have suggested.’ [citing General Jamieson’s speech, above]</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Given the pervasive</strong> uncertainties and assumptions in our analysis, we urge readers not to draw anything from these figures other than rough orders of magnitude.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/PHQbm-Yo8o41VQECdrLihTl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/6AWpSi?track_p_id=2kK8aKx14_Io5JwAEd5xWVh" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/N97AjlHaT3VlTMMO8bsfiki__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/6AWpSi?track_p_id=5gRnmy8aKx14_xnrIPJLdse" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">The Pentagon Is Using China to Scare Tech Companies Into Working With the Military</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">One Zero</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘Tech companies like Google and Amazon are facing new pressure from United States officials to build software for the American military.'</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘In China,</strong> the country’s largest A.I. companies, like Baidu, Tencent, SenseTime, and iFlytek, collaborate with the Chinese government to develop A.I. for national defense, according to a Center for New American Security&nbsp;<a href="https://www.cnas.org/publications/reports/understanding-chinas-ai-strategy" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">report</a>&nbsp;from earlier this year.'&nbsp;</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The U.S. </strong>government wants to see similar partnerships at home.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Tech companies </strong>like Google and Amazon are facing new pressure from United States officials to build software for the American military.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Without the aid of these companies,</strong> officials warn, the U.S. military could find itself outmatched in conflicts against countries like China, which is investing billions into artificial intelligence.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Secretary of Defense Mark Esper,</strong> who recently spoke at the National Security Commission on Artificial Intelligence conference in Washington, D.C., said that whether or not Silicon Valley chooses to work on U.S. defense projects could decide the future world order.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Esper framed</strong> the choice in dramatic terms: a future of global authoritarianism or global democracy.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“The real question</strong> is whether we let authoritarian governments dominate A.I., and by extension the battlefield,” Esper&nbsp;<a href="https://www.defense.gov/Newsroom/Transcripts/Transcript/Article/2011960/remarks-by-secretary-esper-at-national-security-commission-on-artificial-intell/" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">said</a>.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“Or whether industry,</strong> the United States military, and our partners can work together to lead the world in responsible A.I. research and application.”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">“We are engaged</strong> in an epic race for A.I. supremacy,” Rick Perry, secretary of the Department of Energy, said at the same conference as Esper.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“As I speak,</strong> China and Russia are striving to overtake us. Neither of these nations shares our values, or our freedoms.”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘In recent years,</strong> some of the biggest Silicon Valley firms have faced pressure from activists and their own employees for taking on federal contracts to develop military and law enforcement technologies.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Google workers&nbsp;</strong><a href="https://www.nytimes.com/2018/04/04/technology/google-letter-ceo-pentagon-project.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">revolted</strong></a><strong style="font-weight: bold">,</strong> after it was revealed that the company was using A.I. to automate analysis of military drone footage for the government.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The company</strong> ultimately decided not to pursue the renewal of the contract.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Earlier this year,</strong> employees of Chef, a startup that helps organizations manage their digital infrastructure,&nbsp;<a href="https://www.vice.com/en_us/article/qvg3q5/chef-not-renewing-ice-immigration-customs-enforcement-contract-after-code-deleting-protest" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">protested</a>&nbsp;the company’s contract with Immigration and Customs Enforcement.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Chef</strong> also decided not to renew the contract.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff; border-top:1px solid #c80000;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#fff; font-family:Georgia, serif; padding:10px 0 10px 20px; border-bottom:1px solid #efefef; text-align:left; font-size: 1.175em; font-weight:700; color: #c80000; line-height:1.5em; letter-spacing:-0.1px; font-style:italic;text-transform: capitalize;">3. NATO...Not So Fast</span></td></tr><!--- end BLUE_BOX ---></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/6Sh9mq?track_p_id=8YbLTz3Xp67KsrG_lRrQrWN" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/fpGU-wSZv6h37ihY1x6e3Ui__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/6Sh9mq?track_p_id=dcpSkTEizhxcUM67KsrG_Qp" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Nato allies single out China and its policies as a strategic ‘challenge’</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">South China Morning Post</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">“We recognise that China’s growing influence and international policies present both opportunities and challenges that we need to address together as an alliance.”</strong></h2><h3 style="text-align: center;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">NATO statement December 2019</strong></h3><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The United States</strong> has steered Nato allies in Europe to define China as a strategic challenge for the first time in the military alliance’s 70-year history.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Washington’s effort</strong> is coupled with increasing geopolitical concern shared by some Central and Eastern European countries.’’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘A Central European</strong> diplomatic source, speaking on condition of anonymity, said smaller nations in this region “are increasingly feeling the heat of China’s presence”.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“The US and smaller European nations</strong> having been working together to bring up the topic of China in the Nato summit,” he added.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘But other major European leaders</strong> were quick to keep China on their side – at least to a certain extent – after the Nato summit in Britain came to a close on Wednesday.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘China,</strong> Macron said, should not “be the object of our collective defence … in strictly military terms” for Nato.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘And, Nato Secretary General</strong> Jens Stoltenberg said ahead of the meeting that China’s rise was “coming closer” to shifting the global balance of power, but the alliance did not want to “create new adversaries” or get involved in the South China Sea.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff; border-top:1px solid #c80000;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#fff; font-family:Georgia, serif; padding:10px 0 10px 20px; border-bottom:1px solid #efefef; text-align:left; font-size: 1.175em; font-weight:700; color: #c80000; line-height:1.5em; letter-spacing:-0.1px; font-style:italic;text-transform: capitalize;">4. U.S. &amp; China's Strategies </span></td></tr><!--- end BLUE_BOX ---></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/6krU6y?track_p_id=7HpoN22E8cB4JS_seVzcUOs" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/VcdAHHrWxK2Oai7z2r1MjUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/6krU6y?track_p_id=bsVaVhG6juWw8cB4JS_E6JD" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Bad Idea: China-Driven U.S. Strategy</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Center for Strategic and International Studies</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘U.S. strategy has gone from being too unrealistic and underweight in its policy towards China to being overly consumed with it.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘U.S. national security </strong>strategy is overly consumed with China to the detriment of broad global interests.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘A strategic overcorrection</strong> has put China at the center of virtually every U.S. national security conversation and consideration.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘That positioning</strong> is at once distracting the United States from appropriately responding to growing trans-regional geopolitical volatility while also failing to achieve outcomes in U.S. China policy.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘U.S. strategy</strong> has gone from being too unrealistic and underweight in its policy towards China to being overly consumed with it.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'That is caused</strong> by two principal factors.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘First, U.S. policymakers</strong> fell comfortably back into a Cold War paradigm with China when it became abundantly clear that China was developing contrary to U.S. interests around 2013-2014.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The only reference point</strong> in U.S. history for enduring hostilities or threat is the U.S.-Soviet Cold War.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It is therefore understandable,</strong> if regrettable, that U.S. policymakers have placed China into a Cold War paradigm complete with efforts to economically decouple.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Second, the U.S. foreign policy community</strong> is hobbled by a simplistic, commonly held model of the current outlay of geopolitical power.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘That model understates</strong> the relative capacity of the United States and its allies and partners and overstates that of a rising China.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘’In reality</strong> the United States and its allies still constitute more than two-thirds of global GDP,&nbsp;<a href="https://chinapower.csis.org/china-research-and-development-rnd/" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">control the lion’s share of proven technology innovation and R&amp;D capacity</a>, and still possess a combined qualitative and quantitative conventional military edge over China.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'And they give less</strong> consideration to the increasing obstacles facing China, from demographics to global pushback to its outward activities, nearly all of which it must face alone without any meaningful alliances.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The United States and its allies</strong> preserve remarkable advantages to exercise global leadership through shared action.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/731oR6?track_p_id=aZjBT1wUInz8nScjW_UjM31" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/2P2LxiV-sg54VayqL9X2F0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/731oR6?track_p_id=91n1Xv%40ROW8nScjW_4eeKua" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Some Marathon</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Foreign Affairs</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Fareed Zakaria</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘If this is a marathon, it has taken some strange twists and turns, many of which could have ended it altogether.’</strong></h2><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">From Fareed Zakaria’s long-read </strong><a href="https://www.foreignaffairs.com/articles/china/2019-12-06/new-china-scare" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">‘The New China Scare:Why America Shouldn’t Panic About Its Latest Challenger’</strong></a></h3><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Some American observers</strong> talk of China’s long view, of its patient, secret plan to dominate the world, consistently executed since 1949, if not before.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The scholar</strong> and former U.S. Defense Department official Michael Pillsbury has called it China’s “hundred-year marathon,” in a book often praised by the Trump administration.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘But a more accurate picture</strong> is that of a country that has lurched fitfully from a tight alliance with the Soviet Union to the Sino-Soviet split, from the Great Leap Forward to the Cultural Revolution to a capitalist success story, and from deep hostility toward the West to close ties with the United States and back to a flirtation with hostility.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If this is a marathon,</strong> it has taken some strange twists and turns, many of which could have ended it altogether.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Meanwhile, since 1949,</strong> the United States has patiently put in place structures and policies to create a more stable, open, and integrated world; has helped countries enter that world; and has deterred those that sought to destroy it—all with astonishing success.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Washington</strong> has been the opposite of vacillating or overly focused on the short term.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘In 2019,</strong> troops are still on the banks of the Rhine, they are still safeguarding Seoul, and they are still in Okinawa.'&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; border-bottom: 0px solid #ddd; text-align:left; background:#fff;"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-left: 20px; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/7LC8lE?track_p_id=4UGax6gbXlm_Jy4kqYc%40exs" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/tYs11nu25u2uGqSHHEsD7Ei__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; padding-right:3.5%; line-height:1.425"><a href="http://sco.lt/7LC8lE?track_p_id=7hhvsOQv6gbXlm_lJUWcSd5" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">“Can America and China be Stakeholders?”</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">U.S.-China Business Council</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Ambassador Robert Zoellick</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘Do not assume that the cyber era of the 21st Century is immune to crack-ups or catastrophes of equal or even greater scale.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Ambassador Robert Zoellick’s address to the U.S.-China Business Council</strong></p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><a href="https://www.uschina.org/sites/default/files/ambassador_robert_zoellicks_remarks_to_the_uscbc_gala_2019.pdf" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Read</strong></a><strong style="font-weight: bold"> the entire statement - terrific analysis!</strong></li></ul><p style="text-align: center;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">____________________________</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The speeches of Administration principals</strong> herald rivalry, but with no sense that the United States can shape China’s international behavior—whether through diplomacy, negotiation, competition, building coalitions to pressure Beijing, or deterrence.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The Chinese</strong> have listened.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘President Xi</strong> has reportedly told his politburo colleagues in closed sessions that they need to prepare for 30 years of sustained struggle with the United States. “Struggle” is China’s new watchword of strategy.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Frankly,</strong> the Administration itself seems divided.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The principal negotiators</strong> are pressing for sales to China and greater openness; if successful, they would further economic integration.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Others</strong> in the Administration issue diplomatic indictments that can only lead to <strong style="font-weight: bold">decoupling with China</strong>, even if officials eschew the word.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Kevin Rudd</strong>—former Prime Minister of Australia, a good friend of the United States, and a close student of China—recently warned’:</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“A fully</strong><strong style="font-weight: bold">‘decoupled world’</strong> would be a deeply destabilizing place, undermining the global growth assumptions of the last 40 years, heralding the return of an iron curtain between East and West and the beginning of a new conventional and nuclear arms race with all its attendant strategic instability and risk.”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Are you ready for this?’</strong></p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘A slide into Sino-American conflict</strong>—whether intentionally or by accident—would lead to incalculable costs and dangers.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The 20th Century</strong> painted a shocking picture of industrial age destruction.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Do not assume that the cyber era</strong> of the 21st Century is immune to crack-ups or catastrophes of equal or even greater scale.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div>

<div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="20" style="height:20px; font-size:0">&nbsp;</td></tr><tr><td style="vertical-align:top"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="padding-left:3.5%"><a href="" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank" rel="noopener noreferrer" title="CHINADebate"><img width="100%" src="https://assets.website-files.com/5c864c33af62620dca1373ac/5d86577f82aa6e55afacb4ea_cd%20long-fit.png" alt="CHINADebate" style="width: 110px;"></a></td><td align="right" style="padding-right:3.5%"><a href="" target="_blank" rel="noopener noreferrer" style="color:#001544; font-size:13px; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;"></a></td></tr></tbody></table></td></tr><tr><td height="30" style="height:30px; font-size:0">&nbsp;</td></tr><tr><td style="text-align:center; line-height:1"><span style="font-size: 42px; font-family: gorditamedium, sans-serif; color:#0970b3; letter-spacing: -2px; line-height: 1;">China Macro Reporter</span></td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:30px; padding-top:10px;color:#001544; font-size:0.8125em; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;"><span style="color:#001544; font-size:13px; font-family:'gordita', sans-serif; text-decoration:none; border-bottom:none;">by Malcolm Riddell<span style="margin:0 6px">·</span>Dec 4, 2019</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:20px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">Opening Statement</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; padding:0 3.5% 0% 3.5%; border-bottom: 0px solid #ddd; text-align:left; background:#fff"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/5UTTqy?track_p_id=aOOAvPcIXLn8hGEUY_W3ULa" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/4x73lYAycA6tlG4fEtV_j0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; line-height:1.425"><a href="http://sco.lt/5UTTqy?track_p_id=8mPpxAgGR8hGEUY_4qFuHGX" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Opening Statement</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:558px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h1 style="display: block;font-size: 1.5em;margin-top: 0.1em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The China Macro Reporter </strong>aims to help you understand what’s happening in China, not what’s happening itself.</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">But three recent </strong>pieces of news fit our ongoing themes.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">First, regarding the trade deal,</strong> President Trump said: “In some ways, I think it’s better to wait until after the election, you want to know the truth.”</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">As just another market-moving statement,</strong> it’s not important. But given that new major tariffs are coming up on December 15, it is significant.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">While we don’t follow the ups-and-downs,</strong> we do follow the impact of tariffs.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">And, with this statement,</strong> is President Trump sending a signal that the December 15 tariffs are more likely than most of us thought?</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">If those tariffs are imposed,</strong> the impact on the U.S., China, and global economies will be tremendous.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Second, ‘the Caixin-Markit purchasing managers’</strong><strong style="font-weight: bold">index</strong> hit 51.8 in November, nudging up from 51.7 in the previous month, in its quickest acceleration since December 2016.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">While this may</strong> just be a one-off, it gives pause.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Many of our posts</strong> have shown that China’s weakening economy comes much more from internal problems than from the trade war.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">And, because of this,</strong> China doesn’t have as much of an incentive to bend to President Trump’s will to end the trade war to get rid of tariffs.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Now if, in fact,</strong> internal economic problems are easing, then China has even less incentive to do a deal it doesn’t want.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">And the trade war damage </strong>to economies will continue.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Third, 'Huawei is now building smartphones without U.S. chips.'</strong></p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">As we have also covered</strong> at some length, China is driving for self-sufficiency, especially in tech. (A Party priority in fact since the founding of the PRC, as Jude Blanchette points out below.)</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">U.S. attacks on Huawei</strong> and efforts to inhibit China’s tech sector have only caused China to accelerate that drive.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Now, with this report,</strong> we see that Huawei itself - and by inference China's tech industry - is closing the gap to self-sufficiency – perhaps faster than we thought might happen.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Send me your thoughts</strong> on these and the other issues covered today.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">And be sure to forward</strong> the <em style="font-style: italic"><strong style="font-weight: bold">China Macro Reporter</strong></em> to your friends and colleagues.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Best,</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Malcolm</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">&nbsp;</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">1. ‘Front &amp; Center’</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; padding:0 3.5% 0% 3.5%; border-bottom: 0px solid #ddd; text-align:left; background:#fff"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/5mdoB6?track_p_id=eWWJwxIb3%40GH6j15UQDsM_V" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; line-height:1.425"><a href="http://sco.lt/5mdoB6?track_p_id=1m5UQDsM_jQytlMj3chV6dV" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">More Drama on Trade—but the Plot Stays the Same</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:558px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Wall Street Journal</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Nathaniel Taplin | </strong>WSJ</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">“In some ways, I think it’s better to wait until after the election, you want to know the truth.”&nbsp; President Trump</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Investors hoping for a feel-good ending</strong> to season two of the hit drama “U.S.-China Trade War” are once again on the edge of their seats.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘President Trump</strong> on Tuesday startled investors by saying he was willing to wait until after the next election for&nbsp;<a href="https://www.wsj.com/articles/trump-says-trade-war-could-drag-on-stokes-france-spat-11575374711?mod=article_inline" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">a trade deal with China</a>.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Stock markets,</strong> predictably, weren’t happy: The Dow Jones Industrial Average fell 400 points after the open, and ended off 1%.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;">[<strong style="font-weight: bold">But the markets</strong> are up on Wednesday – go figure.]</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Some nervousness</strong> is justified.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Looming December 15 U.S. tariffs</strong> on China-made consumer goods, including popular items like the iPhone, would be bad news for a global economy that is only just perking up after a rocky 2019.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘On the other hand,</strong> just as was the case last month when bullish comments from China on a trade deal briefly lifted markets, it’s worth asking how much new information Mr. Trump’s statement really provides. <strong style="font-weight: bold">The answer: not much</strong>.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Mr. Trump may simply be posturing</strong> to raise the pressure on his Chinese counterparts.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘But even if one takes</strong> the president at face value, it’s worth examining what he didn’t say.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘He didn’t say outright</strong> that new tariffs would start if negotiators can’t hammer out an agreement by the Dec. 15 deadline, although Commerce Secretary Wilbur Ross has struck a hawkish tone in recent interviews.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘And he didn’t rule out</strong> big exemptions if tariffs do come into force—potential&nbsp;<a href="https://www.wsj.com/articles/trump-says-he-is-looking-at-exempting-apple-from-china-tariffs-11574288711?mod=article_inline" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">carve outs for Apple&nbsp;</a>have been under discussion for months.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; padding:0 3.5% 0% 3.5%; border-bottom: 0px solid #ddd; text-align:left; background:#fff"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/64o8VE?track_p_id=1s6XT79S_TnERsVFxVBJqz2" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/zxbyrGBKPhFFZLzMYqfYnUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; line-height:1.425"><a href="http://sco.lt/64o8VE?track_p_id=6ZIQ3vJ6XT79S_p4LCOtgMW" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Chinese manufacturing expands at fastest pace in three years</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:558px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Financial Times / Bloomberg</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">&nbsp;‘The Caixin-Markit purchasing managers’ index hit 51.8 in November, nudging up from 51.7 in the previous month, in its quickest acceleration since December 2016.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘A gauge of China’s manufacturing sector jumped unexpectedly in November.’</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The Caixin-Markit purchasing managers’</strong> index hit 51.8 in November, nudging up from 51.7 in the previous month, in its quickest acceleration since December 2016.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The 50-point level</strong> separates expansion from contraction.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But ‘the Caixin-Markit research</strong> also showed business confidence fell to a five-month low.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The official PMI</strong> looks at larger, state-owned companies, while the Caixin survey examines smaller, private companies.’&nbsp;</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘China’s official non-manufacturing</strong> PMI also ticked higher to 54.4 resulting in a composite PMI of 53.7.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><a href="https://www.bloomberg.com/news/articles/2019-11-30/china-s-manufacturing-is-back-in-expansion-as-outlook-brightens" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Bloomberg.</strong></a><strong style="font-weight: bold"> “It’s important to</strong> emphasize that considerable downward pressures remain on the economy. And it’s unwise to read too much into a single month’s reading.”</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“Large jumps</strong> in activity are not unusual following China’s week-long holidays, such as the Chinese New Year and in October.”</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“The trade talks</strong> with the U.S. will be a crucial swing factor for the outlook."</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">"Policy support</strong> is likely to be kept up.” - Chang Shu, Bloomberg Chief Asia Economist</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/rEYdb7hQsaKlluZgQdbj9Dl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; padding:0 3.5% 0% 3.5%; border-bottom: 0px solid #ddd; text-align:left; background:#fff"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/6MySpM?track_p_id=2Vr7ly0hq_G3ixaZIveHg3T" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; line-height:1.425"><a href="http://sco.lt/6MySpM?track_p_id=7slpo3SO7ly0hq_lKgaep4s" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Huawei Manages to Make Smartphones Without American Chips</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:558px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Wall Street Journal</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><em style="font-style: italic"><strong style="font-weight: bold">'Huawei is now building smartphones without U.S. chips.'</strong></em></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘American tech companies</strong> are&nbsp;<a href="https://www.wsj.com/articles/u-s-begins-granting-exemptions-to-huawei-blacklist-11574271237?mod=article_inline" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">getting the go-ahead to resume business</a>&nbsp;with Chinese smartphone giant Huawei Technologies Co., but it may be too late: It is now building smartphones without U.S. chips.'</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Huawei</strong> has made significant strides in shedding its dependence on parts from U.S. companies. (At issue are chips from U.S.-based companies, not those necessarily made in America; many U.S. chip companies make their semiconductors abroad.)'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Check out </strong>the chart below.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/K4ooRss5xsDCzi_bWazJ_jl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">2. ‘Keep an Eye On’</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; padding:0 3.5% 0% 3.5%; border-bottom: 0px solid #ddd; text-align:left; background:#fff"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/6f8n9U?track_p_id=8FiXNWHa%407rD2Vy_K2jdM2l" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/A7ksJ9vacWg-MZcRwzLMR0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; line-height:1.425"><a href="http://sco.lt/6f8n9U?track_p_id=3NVp7rD2Vy_GtCvbvmp3gvy" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">To stimulate or not to stimulate, that’s the question</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:558px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Trivium China</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><em style="font-style: italic"><strong style="font-weight: bold">'The report recommended that the 2020 economic growth target be 5.5-6.0%, the lowest target in decades.’</strong></em></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘</strong><a href="https://triviumchina.com/" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Trivium</strong></a><strong style="font-weight: bold"> is a team of strategic advisors</strong> focused on policy research and public affairs in China’s political, econ and tech spaces.’ &nbsp;One the top China advisory firms providing first-rate service to its clients</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Trivium</strong> also puts out a great newsletter - <span style="color: #d0021b"><strong style="font-weight: bold">'The Tip Sheet '</strong></span> - that I have come to depend on. You will too.</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><a href="https://triviumchina.com/trivium-daily-newsletter/" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Subscribe</strong></a><strong style="font-weight: bold"> now</strong> – it’s free.</li></ul><p style="text-align: center;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">___________________________________</p><p style="text-align: left;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br><strong style="font-weight: bold">‘The year’s most important economic policy meeting</strong> – the Central Economic Work Conference (CEWC) – will be held in around two weeks.’&nbsp;<br></p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="text-align: left;margin-top: 0.5em;margin-bottom: 0em;">'<strong style="font-weight: bold">That means that policy advisors </strong>are piping up in the hopes of shaping the thinking of top leaders.'<br></li></ul><p style="text-align: left;display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Last Friday,</strong> Renmin University published a <a href="https://mp.weixin.qq.com/s/SfWgePHuUextE7UPUNxcnQ?mc_cid=0f3de9f104&amp;mc_eid=c1bf18e9ce" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">2020 macroeconomic report.</a>’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The big news:&nbsp;</strong>The report recommended that the 2020 economic growth target be 5.5-6.0%, the lowest target in decades.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘But not everyone agrees.'</strong><br></p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Yu Yongding</strong>, a member of the Chinese Academy of Social Sciences, argued that policymakers should not let growth fall below 6% (Sina).’</li><li style="margin-top: 0.5em;margin-bottom: 0em;">&nbsp;[<strong style="font-weight: bold">Yu’s argument</strong> made in a Project Syndicate essay is immediately below.]</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Get smart:&nbsp;</strong>The debate about whether or not to stimulate will continue rage up until the CEWC.’&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; padding:0 3.5% 0% 3.5%; border-bottom: 0px solid #ddd; text-align:left; background:#fff"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/6xJ7Tc?track_p_id=1W67d4DW_t3DYkcAHRaRBIc" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/Tad6xj_ebVw7qqeNRLm3H0i__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; line-height:1.425"><a href="http://sco.lt/6xJ7Tc?track_p_id=bHfBhLjDAj%40o67d4DW_fwf2" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">China Needs Economic Stimulus&nbsp;</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:558px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Project Syndicate</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Yu Yongding</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><em style="font-style: italic"><strong style="font-weight: bold">“It’s approaching 6%. Time to brake.”</strong></em></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Yu Yongding </strong>is once again bucking conventional wisdom: <em style="font-style: italic">“It’s approaching 6%. Time to brake.”</em></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘While structural adjustment is crucial, </strong>slower economic growth is not a&nbsp;<a href="https://www.project-syndicate.org/commentary/china-fiscal-monetary-stimulus-by-yu-yongding-2019-04" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">prerequisite</a>&nbsp;for success; on the contrary, it would impede reform.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘In recent years,</strong> the prospect of slower Chinese growth has gained widespread acceptance, both within and outside China.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘A shrinking working-age population</strong> means that 8% growth is no longer essential for full employment, it is argued, so introducing more fiscal or monetary stimulus isn’t worth the risk.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Instead,</strong> China’s policymakers should focus on improving the quality of growth through supply-side structural reforms – an objective that, most economists in China argue, may in fact be easier to achieve in a lower-growth environment.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘This approach is misguided.’</strong></p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘While structural adjustment is crucial, </strong>slower economic growth is not a&nbsp;<a href="https://www.project-syndicate.org/commentary/china-fiscal-monetary-stimulus-by-yu-yongding-2019-04" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">prerequisite&nbsp;</a>for success; on the contrary, it would impede reform.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Moreover,</strong> given that the complexity of China’s labor market impedes data collection, it is likely that China’s employment situation is not as strong as many believe.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘In this context,</strong> the Chinese government’s top priority should be to arrest the decline in GDP growth – not least to prevent a kind of snowball effect that will make restoring growth far more difficult later.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘After nearly a decade of continuous deceleration,</strong> with no end in sight, investors and consumers are becoming increasingly reluctant to spend.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Serious financial vulnerabilities</strong> will only deepen their concerns;&nbsp;<em style="font-style: italic">ceteris paribus</em>, declining growth will worsen all indicators of financial stability.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Fortunately,</strong> China has the policy space to pursue stimulus.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;">3. ‘Below the Radar’</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; padding:0 3.5% 0% 3.5%; border-bottom: 0px solid #ddd; text-align:left; background:#fff"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/7FTRnk?track_p_id=08Q7yYw_3%4026FP1P1znvhAL" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/DKFLL_WFNIxtoniJ10LrLki__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; line-height:1.425"><a href="http://sco.lt/7FTRnk?track_p_id=4AjKL8Q7yYw_rivqFCZhyIc" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">As Trade War Drags On, China Revs Up Its Bad-Debt Machine</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:558px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Council on Foreign Relations</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><em style="font-style: italic"><strong style="font-weight: bold">‘Debt is now back to its highest level since 2015, in spite of Beijing’s&nbsp;stated&nbsp;commitment to rein it in.’</strong></em></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘To keep growth</strong> from falling below the official&nbsp;<a href="https://www.scmp.com/economy/china-economy/article/2188625/china-lowers-2019-gdp-growth-target-6-65-cent-range" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">6–6.5 percent target</a>, the government has turned to its favorite tool—boosting debt.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It is now back</strong> to its highest level since 2015, in spite of Beijing’s&nbsp;<a href="https://www.reuters.com/article/us-china-economy-finance/china-deleveraging-campaign-enters-new-stage-exchange-official-idUSKBN1EC0B8" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">stated&nbsp;</a>commitment to rein it in.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The state’s fingerprints</strong> are all over the new lending boom.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘As the right-hand graphic</strong> below shows, non-performing loans at so-called&nbsp;<a href="https://cywangecon.weebly.com/uploads/5/6/9/7/5697005/crony_d.pdf" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">City Commercial Banks</a>—state-controlled banks that lend to local businesses and governments—have soared.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The result</strong> is that Beijing’s determination to keep growth over the magic six percent mark—stressed even on official Chinese Ministry of Foreign Affairs&nbsp;<a href="https://twitter.com/zlj517/status/1146345354767609856?s=20" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">social-media&nbsp;</a>accounts—is accelerating the country’s path to debt crisis.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr height="0"><td width="0"></td></tr><tr><td width="0"></td><td align="center"><div style="width:600px;"><img src="https://img.scoop.it/RGzmACPDRKoMDVOb73dUJzl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; padding:0 3.5% 0% 3.5%; border-bottom: 0px solid #ddd; text-align:left; background:#fff"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/7Xdm7s?track_p_id=8wCJzhkJH7NYETG_zr1rH2T" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/zxbyrGBKPhFFZLzMYqfYnUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; line-height:1.425"><a href="http://sco.lt/7Xdm7s?track_p_id=117NYETG_pmNaDRUrJ3aeSo" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Private Companies Forced to Sell to SOEs</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:558px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Financial Times</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">The Editorial Board</strong></h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;">&nbsp;<em style="font-style: italic">&nbsp;</em><em style="font-style: italic"><strong style="font-weight: bold">'Private companies are being forced to sell themselves to state-owned players in order to repay their debts.’</strong></em><em style="font-style: italic">&nbsp;</em></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘A financing squeeze</strong> orchestrated by Beijing to rein in its shadow finance industry and frothy property market has clobbered the private sector.’&nbsp;</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Privately owned companies</strong> contributed more than 60 per cent of GDP growth last year, employed some 340m people and drove much of the country’s technological innovation.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘’Nowhere is this clearer</strong> than in China’s $13tn domestic bond market, a key source of funding for the most heavily-indebted corporate sector in the world.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'While overall bond issuance</strong> this year has grown, the share of this financing taken by private enterprises has dropped precipitously.’’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“Privately owned enterprises</strong> are being squeezed out of the bond market,” said S&amp;P Global Ratings.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Deprived of official access</strong> to issue new bonds they are defaulting in droves.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘A full 12 per cent</strong> by value of bonds issued by private Chinese companies have defaulted between 2014 and now, compared with 0.2 per cent for state-owned companies.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘One upshot</strong> of this is that private companies are being forced to sell themselves to state-owned players in order to repay their debts.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘State-owned companies,</strong> by contrast, have little difficulty in gaining approval to issue new bonds to pay off those that mature or in securing bank loans from a state-dominated banking sector.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Such unequal treatment</strong> should remind observers of the animating ideology behind China’s political economy: the market exists to support the state.’’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If state interests</strong> require it, private interests must be sacrificed.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Most analysts say</strong> the private sector is primarily the victim of unintended consequences.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘’Beijing needed</strong> to rein in a liquidity bubble that has inflated property prices beyond affordable levels in many cities and contributed to hefty corporate debts.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The statement</strong> late last year by Xi Jinping that “any words and practices that negate and weaken the private economy are wrong” is in effect little more than pragmatism.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Listen </strong>to the Bloomberg podcast <a href="https://www.bloomberg.com/news/articles/2019-12-02/how-bond-defaults-are-changing-china-s-markets" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">'How Bond Defaults Are Changing China's Markets,'</strong></a> (34m)</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:10px auto 0 auto; text-align:left;"><tbody><tr><td style="max-width:600px;"><span style="display:block; background-color:#c80000; font-family:'gordita', sans-serif; padding:5px; border-left:0px solid #c80000; text-align:center; font-size: 1.375em; font-weight:900; color: #ffffff; line-height:1.5em; letter-spacing:-0.1px; text-align:center; font-style:none; text-transform:uppercase;"> ‘Explainers’</span></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; padding:0 3.5% 0% 3.5%; border-bottom: 0px solid #ddd; text-align:left; background:#fff"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/7po6S0?track_p_id=cB3JmGFv6aXW682FCCE_Sen" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/hNcw3bzxRQFJ4AxI_o5z1ki__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; line-height:1.425"><a href="http://sco.lt/7po6S0?track_p_id=8KKPTpoYM82FCCE_wW6eJCI" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">Xi Jinping &amp; Maoism</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:558px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">China Leadership Monitor</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Jude Blanchette</strong> | Center for International and Strategic Studies</h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">author, <em style="font-style: italic">China’s New Red Guards: The Return of Radicalism and the Rebirth of Mao Zedong</em></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><br></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><a href="https://www.prcleader.org/interview-with-blanchette" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Read</strong></a><strong style="font-weight: bold"> the full interview </strong>with Jude Blanchette</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">&nbsp;'There’s not much that is genuinely “leftist” about Xi, invocations of Marx and Mao aside.’ &nbsp;</strong></h2><h2 style="display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><span style="color: #d0021b"><strong style="font-weight: bold">Q: ‘Can you explain the enduring ideological influence of Maoism in China?&nbsp;</strong></span></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">BLANCHETTE: 'Many of Mao’s political and ideological innovations</strong>, from the “mass line” (群众路线) campaign to the drive for “self-sufficiency” (自力更生), remain core features of China’s formal political culture.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Likewise,</strong> the great origin story of the People’s Republic of China—from a once-proud nation, humiliated and subjugated by the Western powers, and then to an independent and feared great power — is inseparable from Mao Zedong.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘For those concerned</strong> about China’s now-staggering wealth gap and embrace of extreme materialism, the Mao era (with some glaring omissions) evokes a time of community and shared purpose.’ &nbsp;&nbsp;&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><br></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><span style="color: #d0021b"><strong style="font-weight: bold">Q: ‘Xi Jinping has appropriated much of the rhetoric and ideas of what one may call “leftists.”&nbsp;&nbsp;</strong></span></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">BLANCHETTE: ‘When we talk about Xi as a “leftist,”</strong> we are really talking about a very particular strand of state-nationalist leftism.</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘When the CCP declared</strong> its aim to transition from a revolutionary party to a governing party —a natural evolution for any political party — the goal became regime stability, not the realization of communism.’’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Thus, strictly speaking,</strong> there’s not much that is genuinely “leftist” about Xi, invocations of Marx and Mao aside.’ &nbsp;</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘That being said,</strong> — and I think this is an important point — I have no doubt that Xi firmly believes he is a leftist through and through, just as the party leadership no doubt believes it is striving for socialism, even communism.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘This point is reinforced</strong> when internal speeches are published in journals like Qiushi, where we can see that even behind closed doors, Xi and the party leadership speak in a language that would be eminently familiar to Mao, or even Stalin. This isn’t a façade, even if it might be a sham.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td height="12" style="height:12px; font-size:0"></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; padding:0 3.5% 0% 3.5%; border-bottom: 0px solid #ddd; text-align:left; background:#fff"><tbody><tr><td width="45px" style="display:block; overflow:hidden; margin-top:2px; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);"><a href="http://sco.lt/87yQm8?track_p_id=dNdxN11j23Xr2P8mcPZW_5g" style="border-bottom: none;color: inherit;text-decoration: none;" target="_blank"><img height="45px" width="auto" src="https://img.scoop.it/VcdAHHrWxK2Oai7z2r1MjUi__cjguAuwrRM5-qsdIhQ=" style="display:block; border:none; width:auto;"></a></td><td width="100%" style="padding-left:5%; line-height:1.425"><a href="http://sco.lt/87yQm8?track_p_id=8Ok3J1Igo8mcPZW_Y3scYKi" style="text-decoration: none; color: #001544; font-weight: bold; font-size: 1.35em; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.35; border-bottom:none;" target="_blank">At Last, an RCEP Deal&nbsp;</a></td></tr></tbody></table></td></tr><tr><td><table cellspacing="0" cellpadding="0" style="max-width:558px; width:100%; margin:10px auto 0 auto; border-top: 0px solid #ddd;"><tbody></tbody></table></td></tr><tr><td style="padding:0 3.5%; margin: 0 auto; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Center for Strategic and International Studies (CSIS)</strong></h3><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Bill Reinsch | </strong>CSIS</h3><h2 style="text-align: center;display: block;font-size: 1.25em;margin-top: 0.8em;margin-bottom: 1.0em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 1px solid #ddd;padding-top: 0.6em;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">‘China has long backed RCEP as an opportunity to&nbsp;set&nbsp;regional rules for trade without the influence of the United States.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The Regional Comprehensive Economic Partnership (RCEP</strong>) is reaching its final stages, with officials aiming to sign the agreement in February or March 2020.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘RCEP,</strong> which has been in the works since 2012, would be the world’s&nbsp;<a href="https://www.orfonline.org/expert-speak/rcep-an-economic-architecture-for-the-indo-pacific-57242/" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">largest&nbsp;</a>trade agreement by population and GDP.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘RCEP</strong> is a trade deal involving 15 countries in the Asia-Pacific region.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘When negotiations</strong> were launched in 2012, the bloc originally included all 10 countries from the Association of Southeast Asian Nations (ASEAN) plus Australia, China, Japan, New Zealand, South Korea, and India.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘During the final negotiations,</strong> Indian prime minister Narendra Modi announced that India would pull out of the agreement. While India’s move was somewhat unexpected, the departure will not impact the progress of RCEP.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The Obama administration</strong> worried that the failure to ratify the Trans-Pacific Partnership would allow China to&nbsp;<a href="https://www.reuters.com/article/us-apec-summmit-froman-idUSKBN13D2HG" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">write the trade rules&nbsp;</a>in the Asia-Pacific through RCEP.’</p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘China has long backed RCEP</strong> as an opportunity to&nbsp;<a href="https://www.nbr.org/publication/rcep-negotiations-and-the-implications-for-the-united-states/" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">set&nbsp;</a>regional rules for trade without the influence of the United States.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘China has&nbsp;</strong><a href="https://www.scmp.com/economy/china-economy/article/3021246/china-pushes-rcep-regional-pact-amid-us-trade-war-japan-korea" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">pushed&nbsp;</strong></a><strong style="font-weight: bold">hardest</strong> for the deal among group members as it stands to gain economically and in influence.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘RCEP is important to China</strong> because of declining U.S.-China commercial activity and its maturing economy.’<strong style="font-weight: bold">&nbsp;</strong></p><ul style="margin-top: 0px;margin-bottom: 0px;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Due to rising domestic labor costs</strong>, China is&nbsp;<a href="https://www.china-briefing.com/news/rcep-trade-deal-success-matters-china/" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">eager&nbsp;</a>to find duty-free imports from RCEP partners to replace imports from the United States that are subject to tariffs imposed in response to U.S. duties.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Liberalized access</strong> to developing markets also gives its domestic businesses more certainty that they will not have to rely solely on internal consumer demand.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Also, China likely hopes</strong> that increased exchange in high-tech know-how with South Korea and Japan will keep it on its path to climb up the value-added chain as articulated in the Made in China 2025 policy directive.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">More on RCEP</strong> from Brookings: <strong style="font-weight: bold">&nbsp;</strong><a href="https://www.brookings.edu/blog/order-from-chaos/2018/11/06/the-case-for-rcep-as-asias-next-trade-agreement/" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">'The case for RCEP as Asia’s next trade agreement.'</strong></a></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td height="0" style="height:0px; font-size:0; border-bottom:0px solid #fff">&nbsp;        </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; background-color:#fff; padding-bottom:10px; margin:0 auto 10px auto; border-bottom:1px solid #ddd;"><tbody><tr><td style="max-width:600px;"><img src=""></td></tr></tbody></table></div>

‘Wall Street will be the next US-China battleground’
August 1, 2019
1. TRADE TALKS
2. BEYOND THE TRADE WAR
3. HONG KONG
4. GEO-POLITICS
5. ECONOMY
6. ONLINE BANKING
7. MANUFACTURING LEAVING CHINA
8. CHINESE INVESTMENT IN THE U.S.
‘China’s continuing drag on the global economy’
June 27, 2019
1. ‘The Value of Global China’: McKinsey
2. China's Maritime Militias in the ‘Gray Zone’
3. ‘The Failures of the “Failure of Engagement” with China’
4. Hardline trade minister joins China’s negotiating team
5. ‘The Continuing Chinese Drag on the Global Economy’
‘Does China rule the Fortune 500?’
July 24, 2019
1. ‘Who Likes Facebook's Libra Currency? Not the Chinese.’
2. ‘Does China rule the Fortune 500?’ Pro & Con
3. ‘China's Private Firms Continue to Struggle’: Nick Lardy
4. ‘Does China’s “Invisible Hand” Steer Funds to State-Owned Firms?’
5. ‘Party Loyalty in China Helps Private Companies Get Cheaper Loans’
6. 'Why the United States doesn’t need to return to a gentler China policy'
'China’s State-Driven Growth Model Is Running Out of Gas'
July 20, 2019
1. Trade war fallout not crushing China’s economy: Stephen Roach
2. ‘Trump tries to woo Federal Reserve in China trade fight’
3. ‘China’s State-Driven Growth Model Is Running Out of Gas’
4. ‘U.S.-China Trade: If We Get to Yes, Will It Make Any Difference?’
5. ‘Who Actually Pays Tariffs?’
6. ‘Is China Weakening the Yuan to Fight U.S. Tariffs?’
7. ‘China’s Exchange Rate Policy Woes’
China’s slowing economy not caused by trade war
July 17, 2019
1. China’s slowing economy not caused by trade war
2. China’s economy doing better than latest numbers
3. ‘China’s global business footprint shrinks’: China Global Investment Tracker (CGIT)
4. China: ‘The Art of Wait and See’
5. Why China Still Needs Hong Kong
‘U.S.-China Positions Have Hardened’
July 13, 2019
1. ‘U.S.-China Positions Have Hardened’
2. Impact of tariffs on business decisions: Richmond Fed President
3. ‘China tariffs: We can do better’
4. “Who Knew Trump Would Offer A Truce With Xi?”: The Mystery Of The Wall Street Trump Trades
5. ‘Trump’s tariff claims are demonstrably false. Here’s why.’
6. 'Is the China model a threat?'
‘How China Failed to Fail’
July 10, 2019
1. ‘Graphic Truth: China Since Tiananmen’
2. Secretary Pompeo’s two-prong China strategy
3. ‘The Fed Is Trump’s Secret Ally in the Trade War’
4. ‘Should China help secure the Strait of Hormuz?’
5. ‘Why I’ve Lost Faith in China’s Private Sector’: Shuli Ren, Bloomberg
6. ‘How China Failed to Fail: Can China’s Glass Remain Both Half Full and Half Empty?’
'China Is Not An Enemy'
July 6, 2019
1. ‘China is not an enemy’
2. Alipay & WeChat: China’s retail payment revolution
3. Can Facebook’s Libra replicate WeChat Pay’s digital payment dominance?
4. 'Hong Kong Has Nothing Left to Lose'
Trade war: 'Wet US-China firecracker at G20’
July 3, 2019
1. ‘What the US and China each got out of the Trump-Xi meeting in Japan.’
2. ‘Wet US-China firecracker at G20’: Derek Scissors
3. ‘Trump's “brilliant stroke” with China's Xi a win for US’: Michael Pillsbury
4. ‘The Chinese move only to the extent that it suits their domestic economic agenda.’: Kevin Rudd
5. Peter Navarro on the trade war cease fire and Huawei
6. ‘The big takeaway from this meeting is that you have a ceasefire.’: Michael Hirson, Eurasia Group
7. ‘Trump hasn’t reversed his position on Huawei’: Michael Pillsbury
8. From the World Economic Forum in Dalian China
At the G20, 'Xi still believes he has the upper hand'
June 29, 2019
1. G-20 leaders face a toxic trifecta of political instability, trade tensions and slowing global growth
2. Trump & Xi at the G20: the context
3. Trade War: Xi Still Believes He Has the Upper Hand
Xi's 'Self-reliance' - Why Blacklisting Huawei Could Backfire
June 26, 2019
1. Xi Jinping’s Trade Conundrum: Why the Chinese Leader Isn’t About to Back Down
2. Why Blacklisting Huawei Could Backfire
3. BACKGROUNDER | Huawei: China’s Controversial Tech Giant
4. Mao Redux: The Enduring Relevance of Self-reliance in China
Roubini on the U.S.-China trade war, the impact on the global economy, and the stakes at the coming G20
June 22, 2019
1. Roubini – ‘Dr. Doom’ - on the U.S.-China trade war
2. ‘The Global Consequences of a Sino-American Cold War’
3. The Coming Sino-American Bust-Up
4. The Growing Risk of a 2020 Recession and Crisis
'Trump Has Gotten China to Lower Its Tariffs. Just Toward Everyone Else.'
June 19, 2019
1. ‘America Must Prepare for the Coming Chinese Empire’: Robert Kaplan, Eurasia Group
2. 'Trump Has Gotten China to Lower Its Tariffs. Just Toward Everyone Else.'
3. ‘Services are ½ of the value-added in global trade- we just don’t see them or count them.’: David Dollar, Brookings
4. HK Protests: ‘An analysis of events’ by Nuri Vattachi + a response from a noted Greater China expert
Hong Kong Protests: 'If China doesn't back down, the U.S. will make it pay dearly.'
June 15, 2019
1. ‘People v power: The rule of law in Hong Kong’: The Economist
2. What is the proposed law that the protesters oppose?
3. ‘Plugging a loophole?’
4. ‘Hong Kong’s proposed extradition law puts ties with America at risk’: The Economist
5. ‘China Is Courting Disaster in Hong Kong’: Minxin Pei
6. CONGRESS | ‘The reaction that really matters is in Washington, D.C.’: The Economist
7. CONGRESS | Actions by the Congressional-Executive Commission on China (CECC)
8. PRESIDENT TRUMP | ‘So I hope it all works out for China and for Hong Kong.’
9. PRO | ‘There Are Huge Misconceptions About Extradition Bill.’: Ronnie Tong
10. CON | ‘My take on Hong Kong's extradition bill’: Jerry Cohen
11. CON | ‘A convenient legal tool to grab individuals deemed to be “enemies” of the Chinese state’: Minxin Pei
12. CON | President Xi Needs to tell Carrie Lam ‘no amendment now’ : Michael Pillsbury
'Not another downturn in U.S.-China relations: a paradigm shift'
June 12, 2019
1. ‘China’s rise would have eroded any hegemon’s unrivaled power, no matter how skillful its diplomacy’: Fareed Zakaria
2. ‘Not another downturn in U.S.-China relations: a paradigm shift’: Jim McGregor
3. ‘China had America right where it wanted it - and they overreached’: Jim McGregor
4. ‘China's Private Firms Continue to Struggle’: Nick Lardy
5. ‘Why is China so interested in building and buying ports?’: Deborah Bräutigam
'The Middle East has its oil, China has rare earths.’ Deng Xiaoping
June 7, 2019
1. The trade war is paralyzing business decision making.
2. Impact of tariffs on U.S. businesses in China: AmCham China chairman
3. ‘The Middle East has its oil, China has rare earths.’ Deng Xiaoping
4. Trade war: How lawyers vs economists as negotiators lead to the breakdown in talks
5. A primer on how Chinese law might enforce a US-China trade deal
6. Impact of tariffs on U.S. businesses in China: AmCham survey
The 30-year detour: The path from Tiananmen to Xi Jinping
June 4, 2019
1. ‘Tiananmen divides PRC history into before and after’
2. The 30-year detour: The path from Tiananmen to Xi Jinping
3. ‘The Party has relied on brute force since its inception’
4. Tiananmen: Reporting from ABC World News Tonight 1989
5. ‘Assignment: China - Tiananmen Square’
6. The story behind the ‘Tank Man’ photo
Peter Navarro talks tariffs on CNBC
June 1, 2019
1. Peter Navarro talks tariffs on CNBC 💣
2. Navarro : ‘The producers in Mexico and China pay for this. Here's how it works. A tariff goes on that puts pressure on the Chinese or the Mexican producers to lower their prices – otherwise they can't sell.’
3. Navarro : ‘Corporate executives are recognizing that the supply chain is better off in other places in the globe or better yet bring that here.’
4. Navarro : ‘So these people who say that somehow American consumer is going to pay for this - that's simply not true.’
5. Navarro : ‘We’ve had tariffs on dishwashers and solar panels - half of Chinese exports to this country - steel and aluminum and we see virtually no inflation.' — DISHWASHERS & SOLAR PANELS
6. Navarro : ‘We’ve had tariffs on dishwashers and solar panels - half of Chinese exports to this country - steel and aluminum. And we see virtually no inflation.’ — STEEL
‘How China Sees Trump’s Trade War’
May 29, 2019
1 ‘How China Sees Trump’s Trade War’: Victor Shih
2. Nick Lardy on the trade war, fixing capital allocations, & why China’s GDP numbers are right
3. ‘Death by China’ & Peter Navarro
Why the West is getting Xi wrong
May 22, 2019
1. How the West is getting China wrong
2. Now China's Got Its Own Anti-U.S. Trade War Song
3. ‘Trade tensions will persist until global financial imbalances are addressed’
4. ‘Five Big Myths of China's Belt and Road Initiative.’
5. Trump's 2019 Protection Could Push China Back to Smoot-Hawley Tariff Levels
6. More from Bill Overholt
Trade talks breakdown: How the U.S. misunderstands Chinese negotiating style
May 18, 2019
1. Tracing Trump's Aggressive Tariff Strategy Back to the 1980s
2. Tom Friedman explains why he agrees with Trump's China aims but not his means
3. Trade talks breakdown: How the U.S. misunderstands Chinese negotiating style
4. Trade War Won’t Dent China’s GDP
5. Comments on the U.S.-China trade war from PIIE president Adam Posen
6. China’s response: a stable or a weakened Yuan?
Sharpening the US-China trade debate
May 15, 2019
1. It's Trump vs. Xi in the China trade war — and it's personal
2. 'Reaching an agreement can only be done at the top.’
3. Sharpening the US-China trade debate
4. FACE OFF: Brookings vs. American Enterprise Institute
5. Trade war: Is the U.S. panicking due to China’s big hedge?
6. ‘The Chinese don't get this concept “earn” their way out of punitive tariffs’: Michael Pillsbury
'Trump was right to call China's bluff in the trade talks'
May 10, 2019
1. As China Trade Talks Stall, Xi Faces a Dilemma: Fold? Or Double Down?
2. 'Trump was right to call China's bluff in the trade talks': Bill Bishop
3. The US-China trade war is poised to enter the next phase
4. Tariffs on China are no substitute for a trade deal
5. China can earn its way out of Trump’s tariffs
6. Xi Jinping Wanted Global Dominance. He Overshot
7. Trade War Results in Substantial Losses for U.S.
8. Trump Could Raise Tariffs on China. Here’s How China Could Respond.
9. A year of trade losses in the U.S.-China tariff war.....—AEI
Will Trump's ‘Crazy Uncle’ strategy work this time?
May 8, 2019
1. 'Expect the president to move forward with tariffs this Friday.": Meredith Sumpter, Eurasia Group
2. Will Trump's ‘Crazy Uncle’ strategy work this time?
3. New tariffs could cost China 1% GDP: Tao Wang, UBS
4. 'Why Trump Is Raising Tariffs on China' - by Trump advisor Michael Pillsbury
5. Trump's Tariff Threat on Rest of Chinese Goods Would Hit Final Consumer Product
China Never Stopped Managing its Trade
May 4, 2019
1. China Never Stopped Managing its Trade
2. A dash of stimulus helps stabilize China’s wobbly economy
3. 'May 4th Movement': Happy 100th anniversary
4. 'How the Communist Party seized the legacy of May Fourth'
Xi's Belt and Road Reboot
May 1, 2019
1. Xi Jinping's Second Belt and Road Forum: Three Key Takeaways
2. Brooking's David Dollar on praise and criticism of Belt and Road Initiative
3. Three ways of looking at the Belt and Road Initiative
4. A Slimmer Belt and Road Is Even Scarier
5. Expert Insights | 'China&rsquo;s Belt And Road: The New Geopolitics Of Global Infrastructure Development'
6. Director's Summary | 'China&rsquo;s Belt And Road: The New Geopolitics Of Global Infrastructure Development'
7. QUIZ: How much do you know about the Belt and Road Initiative?
8. 'Durian "Little Thai" takes us on a journey along the Belt and Road'
'The State Has Dragged Down China’s Economic Growth'
April 27, 2019
1. 'The State Has Dragged Down China’s Economic Growth': Nick Lardy
2. U.S.-China trade talks: How Trump’s latest Iran sanctions decision could impact a deal
3. In US-China Trade Disputes, the WTO Usually Sides with the United States
4. Trump and the WTO: From trashing to crippling
5. 'China Growth Outlook': Credit Suisse
6. Caixin PMI has become a leading indicator of global momentum
5G: 'The US. is winning a race that no one else is running'
April 24, 2019
1. 5G: 'The U.S. is winning a race that no one else is running'
2. Department of Defense: The obstacle to U.S. winning 5G
3. China in the report
In China, Party Control Trumps the Economy
April 20, 2019
1. China's economy back on track - Not so fast
2. In China, political control trumps the economy
3. JUST OUT | 2019 OECD Economic Survey of China
4. Why the calculations that led to the trade war are wrong
'Only Trump can save China'
April 17, 2019
1. Five things to watch for in China’s new GDP data
2. 'Only Trump can save China'
3. ‘China’s land prices deserve as much attention as European industrial production or U.S. retail sales’
4 'Trump’s Foreign Policies Are Better Than They Seem'
Europe's 'new realism' at the 'EU-China Summit'
April 13, 2019
1. 'EU-China Summit': China faces a tougher Europe
2. Europe's 'new realism' at the 'EU-China Summit'
3. China's strategy for the EU
4. The EU's (possible) strategies toward China
5. VIDEO | The Heat: China-EU summit
Trade war: 'U.S. policy has changed because China has changed'
April 10, 2019
1. Trump & Kim Hangin' in Hanoi
2. Trade war: 'U.S. policy has changed because China has changed'
3. China’s leaders should study James Bond films
4. The best explanation of Xi's view on China's private sector – beat it into submission
5. Heads Up | Watch GZERO World with Ian Bremmer – terrific!
6. April 2019 Trade Bulletin
'Why China market reforms haven't worked'
April 6, 2019
1. 'We're going from an unregulated trade war with China to a regulated one.’
2. Why China's market reform isn't working
3. All is well in China's intelligence service
4. 'China's GDP could start to grow again in 5-10 years': Prof Xu Bin, CEIBS
5. Starbucks opens a new store in China every 15 hours
'China is the world’s best consumer story'
April 3, 2019
1. 'China stimulus tracker: A one-year report card' | Development Bank of Singapore (DBS)
2. 'China is the world’s best consumer story' | McKinsey
3. When will China GDP > U.S GDP?: '2030 is not a bad estimate - but so is never.'
4. Xi and Trump Miss Their Chance
An unmistakable first-quarter recovery' for China's economy
March 30, 2019
1. 'An unmistakable first-quarter recovery' for China's economy
2. China’s Bond Market Comes of Age—Sort of
3. 'The Future of China's Bond Market'
4. 'The president has taught me that tariffs have an important use in trade negotiations': Larry Kudlow
5. 'A prolonged period of radical uncertainty' - 'a major source is the Sino-American trade war': Michael Spence
'Xi visits a divided EU with charm and deals'
March 27, 2019
1. Mueller report give U.S. more clout in trade negotiations
2. 'The time of European naïveté towards China had ended': Macron
3. Xi in Europe: How China is outmaneuvering Trump on trade
4. 'The Belt and Road Initiative Impact on Europe: An Italian Perspective'
'Two Sessions' End
March 23, 2019
1. 'Foreign Investment Law': the level playing field
2. 'Foreign Investment Law': 'Tech transfer in China is no longer the main concern'
3. Yi Gang: 'China has deleveraged' | Michael Pettis: 'No. Debt has gone up'
4. 'China can't create growth- or jobs - out of tax cuts'
5. 'The manufacturing sector, mired in a crisis of confidence, needs more than this tax cut.'
6. With Streaks of Gray Hair, Xi Jinping of China Breaks With Tradition
7. Another insight from 'The Relevant Organs'
'Two Sessions' II
March 13, 2019
1. China's increased State role is reason for slowing economy, Lardy Says
2. Addressing the crisis of confidence - what Premier Li said and didn't say
3. Is China looking for 'good' shadow banks?
4. PODCAST (12m 22s) | Analysing China’s Two Sessions and the influence of tech company chiefs
5. Explaining the seating plan at China's Two Sessions
6. IN DEPTH | More Nick Lardy on 'The State Strikes Back: The End of Economic Reform in China?'
'Two Sessions' I
March 9, 2019
1. Facing Slowing Economic Growth, China’s Premier Promises Relief for Business
2. Six key takeaways from China's annual policy blueprint
3. China’s Stimulus Muddle Deepens
4. China’s ‘two sessions’: an economic watershed or more of the same?
5. Xi Jinping Works to Stifle Dissent Amid Concerns About China’s Economy
6. FINTECH: Two Sessions Sends Strong Signals on Support for Chinese Fintech Development
7. How tea is served in the Great Hall of the People in China
8. 'Two Sessions': A rap song extolling China's annual political meeting
Podcast