China Macro Reporter

<tr><td class="nl-post"><p>The range of views about the cease fire in the trade war goes from:</p><ul><li><strong>&lsquo;Wet US-China firecracker at G20&rsquo; </strong>by AEI&rsquo;s Derek Scissors</li></ul><p><span style="display:block; text-align:center;">to</span></p><ul><li><strong>&lsquo;Trump's &ldquo;brilliant stroke&rdquo; with China's Xi a win for US&rsquo; </strong>by Michael Pillsbury of the Hudson Institute.</li></ul><p>Both are here, along with commentaries by:</p><ul><li><strong>Kevin Rudd,</strong> president of the Asia Society Policy Institute, former Australian Prime Minister</li><li><strong>Peter Navarro,</strong> Assistant to the President and Director of Trade and Manufacturing Policy</li><li><strong>Michael Hirson</strong>, Practice Head for the China and North East Asia Regions for the Eurasia Group.</li><li><strong>Tim Stratford</strong>, Chairman of the American Chamber of Commerce in China and a partner at Covington &amp; Burlington in Beijing</li><li><strong>Yi Xiaozhun, </strong>Deputy Director General of the WTO</li><li><strong>Charles Li, </strong>Chief Executive of the Hong Kong Stock Exchange.</li></ul><p>And to frame their comments, this issue begins with a summary:</p><p>&lsquo;<strong>What the US and China each got out of the Trump-Xi meeting in Japan,&rsquo; </strong>by Brookings&rsquo; Ryan Haas.</p><p>The only thing that we really know is that &ndash; as President Trump often says - &lsquo;We&rsquo;ll see what happens.&rsquo;</p></td></tr>

1. ‘What the US and China each got out of the Trump-Xi meeting in Japan.’

<tr><td class="bg-holder"><img width="100%" src="" alt="CHINADebate"></td></tr><tr><td class="nl-post"><p class="caption">Brookings</p><p class="excerpt"></p><p><strong>&lsquo;Presidents Trump and Xi</strong> met on June 29, on the margins of the G-20 summit in Osaka, Japan, continuing the practice of holding leader-level meetings at multilateral events whenever both the U.S. and Chinese leaders are present,&rsquo; writes <strong>Ryan Haas</strong> of Brookings in <a href="" target="_blank">&lsquo;What the US and China each got out of the Trump-Xi meeting in Japan.</a></p><ul><li><strong>&lsquo;Authoritative Chinese readouts</strong> of the meeting from official media have been tonally positive but vague about the outcomes.&rsquo;</li><li>The same holds for President Trump&rsquo;s public characterizations.&rsquo;</li></ul><p><strong>&lsquo;This generally positive</strong> but non-specific characterization likely reflects that both leaders covered a range of issues in a short period of time.&rsquo;</p><ul><li><strong>&lsquo;And they did so</strong> without the benefit of detailed preparatory negotiations to define outcomes that both leaders could affirm.&rsquo;</li><li><strong>&lsquo;Even so,</strong> a few early takeaways from the meeting are visible.&rsquo;</li></ul><p><strong>&lsquo;For Beijing, key outcomes include&rsquo;:</strong></p><ol><li><strong>&lsquo;No new tariffs.&rsquo;&nbsp;</strong><ul><li><strong>&lsquo;President Trump</strong> earlier had threatened to impose tariffs on the roughly $300 billion of Chinese imports that currently fall outside of existing taxes on imports.&rsquo;</li><li><strong>&lsquo;This list</strong> includes popular consumer items such as smart phones, tablets, laptops, and cameras.&rsquo;</li><li><strong>&lsquo;Trump pledged</strong> to withhold tariff escalation to enable an opportunity for negotiators to reach a trade deal.&rsquo;</li></ul></li><li><strong>&lsquo;Reduced pressure on Huawei.&rsquo;</strong><ul><li><strong>&lsquo;President Trump</strong> indicated that American companies could sell to telecom giant Huawei&nbsp;&ldquo;where there is no great national emergency problem with it.&rdquo;&rsquo;</li><li><strong>&lsquo;Irrespective</strong> of how many products the Trump administration exempts for sale to Huawei, the broader impact is that Trump effectively gutted the U.S. global campaign to compel other countries to sever ties with the company.&rsquo;</li><li><strong>&lsquo;If President Trump</strong> sees Huawei as an object of leverage in negotiations, but not a national security threat, it is likely that many other countries similarly will discount the national security risk posed by Huawei.&rsquo;</li></ul></li><li><strong>&lsquo;Resumption of open-ended trade negotiations.&rsquo;&nbsp;</strong><ul><li><strong>&lsquo;Since one of China&rsquo;s goals </strong>is to play for time, many in Beijing likely will be relieved that Trump chose not to set a deadline for negotiations.&rsquo;</li><li><strong>&lsquo;Beijing sees value</strong> in prolonging negotiations both because it judges that Trump will grow more desirous of a deal the closer he gets to the U.S. election, and also because it calculates Trump will have more incentive to quash policy initiatives that could cloud the atmosphere for negotiations (e.g., new actions on Taiwan, additional technology export controls, sanctions on officials handling Xinjiang affairs, etc.) when talks are ongoing.&rsquo;</li></ul></li><li><strong>&lsquo;Better treatment for Chinese students.&rsquo;&nbsp;</strong><ul><li><strong>&lsquo;Intensifying American law enforcement</strong> and media scrutiny of Chinese students&rsquo; activities in the United States has become a raw topic in China, where many families have aspired to send their children to the United States for academic training, but have been growing more reluctant due to concerns about racial profiling.&rsquo;</li></ul></li><li><strong>&lsquo;Strategic direction.&rsquo;&nbsp;</strong><ul><li><strong>&lsquo;Amidst a growing cacophony</strong> of calls in the United States for treating China as a rival, Trump departed from his top advisors to predict that&nbsp;&ldquo;we&rsquo;re going to be strategic partners.&rdquo;&rsquo;</li></ul></li></ol></td></tr>

2. ‘Wet US-China firecracker at G20’: Derek Scissors

<tr><td class="bg-holder"><img width="100%" src="" alt="CHINADebate"></td></tr><tr><td class="nl-post"><p class="caption">AEI</p><p class="excerpt">‘American policy toward China did not regress at Osaka. But it remained stuck, stuck with a president who seems to only care about exports and stuck with critics whose alternatives rely either on clichés or on pleas to cooperate more with a predatory trade partner run by a cult of personality dictator.’</p><p><strong>&lsquo;Nothing of consequence</strong> came out of the weekend Trump-Xi meeting in Osaka,&rsquo; write AEI&rsquo;s <strong>Derek Scissors</strong> in <a href="" target="_blank">&lsquo;Wet US-China firecracker at G20.&rsquo;</a></p><ul><li>&lsquo;(So feel free to switch to a piece about North Korea.)&rsquo;</li></ul><p><strong>&lsquo;The president&rsquo;s desire</strong> to restart talks has made been clear for weeks by, among other things, the&nbsp;vanishing vice-presidential speech&nbsp;on Chinese human rights.&rsquo;</p><ul><li><strong>&lsquo;A restart</strong> required suspending tariffs on $300 billion in imports.&rsquo;</li><li><strong>&lsquo;China will buy</strong> an unspecified amount of American farm goods.&rsquo;</li><li><strong>&lsquo;And the symbolic sanction on Huawei </strong>will be eased in some vague way.&rsquo;&nbsp;</li></ul><p><strong>&lsquo;The Huawei component</strong> might seem consequential &mdash; it&rsquo;s not.&rsquo;</p><ul><li><strong>&lsquo;The Trump administration</strong> speaks loudly and carries a small stick with regard to Chinese companies.&rsquo;</li><li><strong>&lsquo;A year ago,</strong> a&nbsp;White House report on intellectual propertyput the low end of the PRC&rsquo;s theft at $180 billion annually.&rsquo;</li><li><strong>&lsquo;Yet the US</strong> has punished only a handful of firms, even including&nbsp;the steps taken 10 days ago.&rsquo;</li><li><strong>&lsquo;Tariffs are often labeled</strong> as the true retaliation for IP theft and coercion.</li><li><strong>&lsquo;&lsquo;But the president</strong> instead treats tariffs as tools to raise revenue and pressure Beijing to import.&rsquo;</li><li><strong>&lsquo;Tariffs apply to all</strong> China-based exporters equally and thus provide no incentive to stop stealing.&rsquo;</li><li><strong>&lsquo;Beyond IP,</strong> sanctions against Chinese firms involved in human rights violations have been&nbsp;rumored for months, but they haven&rsquo;t materialized either.&rsquo;</li></ul><p><strong>&lsquo;Huawei</strong> fits this pattern perfectly.&rsquo;</p><ul><li><strong>&lsquo;The initial action</strong> was not a blanket denial order but addition to a list which allows sales to Huawei&nbsp;from third countries.&rsquo;</li><li><strong>&lsquo;A temporary license</strong> was granted until August, supposedly to allow time to adjust but actually to buy time for talks.&rsquo;</li><li><strong>&lsquo;President Trump</strong> then repeatedly said Huawei&nbsp;was negotiable.</li><li><strong>&lsquo;There was no change at Osaka</strong>&mdash; Huawei has been discussed as a genuine threat but never treated like one.&rsquo;</li></ul><p><strong>&lsquo;Negotiations</strong> are back close to where they were in late April, when Secretary Mnuchin thought they were&nbsp;90% done, only to find Beijing insisting the US&nbsp;should just trust&nbsp;China&rsquo;s IP commitments to be meaningful.&rsquo;</p><ul><li><strong>&lsquo;The US faces</strong> the same problem now as then: we want guarantees the Communist Party will act against its state-owned enterprises when we won&rsquo;t even do so.&rsquo;</li></ul><p><strong>&lsquo;Compounding matters,</strong> there was a second China non-event last week: the Democratic debates.&rsquo;</p><ul><li><strong>&lsquo;President Trump&rsquo;s would-be rivals</strong> put him under no serious pressure to improve policy.&rsquo;</li><li><strong>&lsquo;His continued praise</strong> of China as a&nbsp;&ldquo;very good&rdquo;partner if only it buys a lot more American products has holes Democratic candidates could have driven a truck through.&rsquo;</li><li><strong>&lsquo;Apparently,</strong> none of them own trucks.&rsquo;</li></ul><p><strong>&lsquo;The popular mantra</strong> of &ldquo;work with our allies&rdquo; says nothing about US priorities and what price attaining our priorities is worth.&rsquo;</p><ul><li><strong>&lsquo;By itself, it&rsquo;s vacuous.&rsquo;</strong></li><li><strong>&lsquo;And it&rsquo;s still better</strong> than the occasional claim that &ldquo;China really wants to reform,&rdquo; though reformers&nbsp;haven&rsquo;t won a major policy battlesince 2003 and General Secretary Xi has&nbsp;actively undermined competitive markets.&rsquo;</li></ul><p><strong>&lsquo;American policy toward China</strong> did not regress at Osaka.&rsquo;</p><ul><li><strong>&lsquo;But it remained stuck,</strong> stuck with a president who seems to only care about exports and stuck with critics whose alternatives rely either on clich&eacute;s or on pleas to cooperate more with a&nbsp;predatory trade partnerrun by a&nbsp;cult of personality dictator.&rsquo;</li></ul><p><strong>&lsquo;UPDATE&rsquo;:</strong></p><p><strong>&lsquo;This morning brings</strong> to light a&nbsp;Federal Registry notice&nbsp;walking back one of the few American efforts to target Chinese companies.&rsquo;</p><ul><li><strong>&lsquo;The notice removes</strong> from the &ldquo;Unverified List,&rdquo; eight entities added less than three months ago, because they were then deemed untrustworthy counterparties for American firms.&rsquo;</li><li><strong>&lsquo;The notice</strong> was published Thursday, before Osaka, but not mentioned by either the US trade delegation or the Department of Commerce.&rsquo;</li></ul><p><strong>&lsquo;So the US suspended the tariffs</strong> on $300 billion, postponed or canceled a major speech on human rights coincident with the 30th&nbsp;anniversary of Tiananmen, and lifted sanctions on Chinese firms without even trying to offer justification.&rsquo;</p><ul><li><strong>&lsquo;The president</strong> insists China is more eager for a deal than we are &mdash; his administration&rsquo;s (in)actions say otherwise.&rsquo;</li></ul></td></tr>

3. ‘Trump's “brilliant stroke” with China's Xi a win for US’: Michael Pillsbury

<tr><td class="bg-holder"><img width="100%" src="" alt="CHINADebate"></td></tr><tr><td class="nl-post"><p class="caption">Fox Business</p><p class="excerpt">A lot of people don't understand that Trump is dealing with an equal power here.</br>He can't just spit in their face and say, “You know, you sign this agreement or else go to hell.” He's got to be very clever and nuanced - and that's what he's doing. </p><p><strong>Michael Pillsbury</strong> is Senior Fellow and Director for Chinese Strategy&nbsp;at the Hudson Institute.</p><ul><li><strong>He advised</strong> President Trump and Trade and Manufacturing Policy Director Peter Navarro ahead of the Osaka summit.</li><li><strong>He made his comments</strong> during <a href="" target="_blank">a video interview on Fox Business</a>.</li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;First,</strong> can you go through what the strategy is with China at this point? What just took place at in Osaka?&rsquo;</p><p><span class="h5p" style="color:#0970b3">Pillsbury: </span>The most important thing was to get a president Xi to return his delegation to the talks.&rsquo;</p><ul><li><strong>&lsquo;There was</strong> a major breakdown six weeks ago.&rsquo;</li><li><strong>&lsquo;The talks</strong> really faced extinction at that point.&rsquo;</li></ul><p><strong>&lsquo;China was taking back</strong> a lot of major points.&rsquo;</p><ul><li><strong>&lsquo;They were refusing</strong> to go further on the enforcement mechanism.</li><li><strong>&lsquo;It was a</strong> pretty bleak situation.&rsquo;</li></ul><p><strong>&lsquo;I think what had to happen,</strong> President Xi's team made clear in their media, is that he needs something on Huawei at this meeting.&rsquo;</p><ul><li><strong>&lsquo;He also needed</strong> to have the tariffs at least not imposed at this meeting.&rsquo;</li><li><strong>&lsquo;Otherwise</strong> he would be saying no to any further talks.&rsquo;</li></ul><p><strong>&lsquo;That's what president Trump did.</strong> It's a brilliant stroke.&rsquo;</p><ul><li><strong>&lsquo;The president</strong> deserves a lot of credit.&rsquo;</li><li><strong>&lsquo;He hasn&rsquo;t it spelled out</strong> the details of the Huawei a matter. He hasn't said, you know, Huawei could be in 5G now around the world.&rsquo;</li><li><strong>&lsquo;But he has focused</strong> on American technology suppliers of parts to Huawei.&rsquo;</li></ul><p><strong>&lsquo;This gives President Xi</strong> the face he needs to face down his hawks in China and restart the talks.&rsquo;</p><ul><li><strong>&lsquo;So it's a huge success</strong> for the president.&rsquo;&rsquo;</li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;Okay.</strong> We've been talking about and hearing from this president about the massive national security threat that Huawei is to America.&rsquo;</p><ul><li><strong>&lsquo;To lift that embargo</strong> - does that fly right into the face of what the president has been telling us for so long?&rsquo;</li></ul><p><span class="h5p" style="color:#0970b3">Pillsbury:</span><strong> &lsquo;Well, this goes back</strong> to what the president did on the ZTE matter.&rsquo;</p><ul><li><strong>&lsquo;He hasn't said Huawei</strong> should be put out of business.&rsquo;</li><li><strong>&lsquo;He's talked about</strong> the national security threat from Huawei eavesdropping, back doors, surveillance, a series of things that are just not acceptable.&rsquo;</li><li><strong>&lsquo;So he doesn't want Huawei</strong> to get into sensitive sectors around the world.&rsquo;</li><li><strong>&lsquo;Our government</strong> is still banned from buying Huawei products.&rsquo;</li></ul><p><strong>&lsquo;But it's something different</strong> to say we want to bankrupt and destroy Huawei.&rsquo;</p><ul><li><strong>&lsquo;That's what</strong> the president has not done.&rsquo;</li></ul><p><strong>&lsquo;I had a meeting in London</strong> last month with the Huawei leadership.&rsquo;</p><ul><li><strong>&lsquo;They make a distinction</strong> between keeping alive like ZTE did with 70,000 jobs for China, versus being put out of business entirely.&rsquo;</li></ul><p><strong>&lsquo;I think that's the needle </strong>that the president has threaded.&rsquo;</p><ul><li><strong>&lsquo;He's not</strong> given up in any way.&rsquo;</li><li><strong>&lsquo;This fake news</strong> that this is a catastrophe and that he surrendered on Huawei &ndash; it&rsquo;s just not true.&rsquo;</li><li><strong>&lsquo;He has not</strong> lifted the ban.&rsquo;</li><li><strong>&lsquo;The effort to keep Huawei</strong> out of 5G in Germany, England, India, around the world - that's going to continue - but not to destroy the company.&rsquo;</li><li><strong>&lsquo;That's why President Trump</strong> has allowed American parts to continue being supplied.&rsquo;</li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;In terms</strong> of a potential deal with China, why would the Chinese give in to not stealing intellectual property and forcing the transfer of technology when we know they just reneged in May on, on those two issues?&rsquo;</p><p><span class="h5p" style="color:#0970b3">Pillsbury:</span><strong> &lsquo;That's a great question.</strong> There are two reasons.&rsquo;</p><p><strong>&lsquo;One is they say</strong> they want to cut this out themselves.&rsquo;</p><ul><li><strong>&lsquo;They're generating</strong> enough intellectual property themselves - they don't want other countries to steal it.&rsquo;</li></ul><p><strong>&lsquo;The other thing</strong> is China is a very strong economy.&rsquo;</p><ul><li><strong>&lsquo;If you look</strong> at the IMF, the World Bank, and even the CIA Fact Book, China surpassed our economy three years ago in purchase power parity.</li><li><strong>&lsquo;They&rsquo;re bigger</strong> than we are.&rsquo;</li><li><strong>&lsquo;A lot of people</strong> don't understand that Trump is dealing with an equal power here.&rsquo;</li><li><strong>&lsquo;He can't just spit in their face</strong> and say, &ldquo;You know, you sign this agreement or else go to hell.&rdquo;&rsquo;</li><li><strong>&lsquo;He's got to be very clever</strong> and nuanced - and that's what he's doing.&rsquo;</li></ul></td></tr>

4. ‘The Chinese move only to the extent that it suits their domestic economic agenda.’: Kevin Rudd

<tr><td class="embed-responsive embed-responsive-16by9"><iframe class="embed-responsive-item" src=""></iframe></td></tr><tr><td class="nl-post"><p class="caption">CNBC Television</p><p class="excerpt">‘So in terms of the Osaka outcome, if you sitting and in Beijing this morning, we're sitting around the politburo table - they did meet up on Monday over there - they'd saying, “Hey, high five.”’</p><p><strong>Kevin Rudd</strong> is president of the Asia Society Policy Institute, former Australian Prime Minister, and a well-regarded China expert.</p><ul><li><strong>He gave</strong> his views in a <a href="" target="_blank">CNBC video interview</a>.</li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;Are we making progress,</strong> and is it possible that to come to some settlement with China in the next year?&rsquo;</p><p><span class="h5p" style="color:#0970b3">Rudd:</span><strong> &lsquo;The underlying economic logic</strong> in Xi Jinping&rsquo;s and, I think, in President Trump's mind is this thing has to be put to bed.&rsquo;</p><ul><li><strong>&lsquo;Otherwise</strong> it wrecks markets completely.&rsquo;</li><li><strong>&lsquo;The President's got to reelect</strong>, and Xi Jinping has got a softening economy domestically.&rsquo;</li><li><strong>&lsquo;Those two</strong> fundamentals haven't changed.&rsquo;</li></ul><p><strong>&lsquo;And there's a lot of political theater</strong> surrounding this in terms of who is seen to back down and or not back down.&rsquo;</p><ul><li><strong>&lsquo;I'm making a bold prediction here:</strong> between now and certainly probably thanksgiving, we'll have some form of deal.&rsquo;</li><li><strong>&lsquo;There'll be a critique</strong> about how substantial it is and all the rest of it.'</li><li><strong>&lsquo;But I think</strong> the underlying interests are there.&rsquo;</li></ul><p><span class="h5p" style="color:#c80000">Q:</span> <strong> &lsquo;The <em>Wall Street Journal</em></strong> points out today that both President Trump and President Xi have hard liners that are putting pressure on them and that could make things more complicated.&rsquo;</p><p><span class="h5p" style="color:#0970b3">Rudd:</span> <strong> &lsquo;The hard liners in both capitals</strong> should get together and have a group hug because they have the same sort of attitude to life, which is&rsquo;:</p><ul><li><strong>&lsquo;It's far easier</strong> for organized enmity between the two countries than any form of economic engagement.&rsquo;</li></ul><p><strong>&lsquo;From a Chinese perspective,</strong> however - and I've just come from China back to New York - they're pretty happy with the outcome.&rsquo;</p><ul><li><strong>&lsquo;What they expected</strong> was that there'd be a reboot for the negotiations &ndash; tick, that was done.&rsquo;</li></ul><p><strong>&lsquo;What they didn't expect</strong> with the other two gifts, if you like, which the President delivered.&rsquo;</p><ul><li><strong>&lsquo;One was the announcement</strong> that there would be no new tariffs for the duration of the negotiations. And that had been a big factor in Chinese domestic market sentiment.&rsquo;</li><li><strong>&lsquo;But the second one</strong> that really caught them by surprise was a statement on Huawei.&rsquo;</li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;But explain this to me.</strong> Secretary of State Pompeo was sitting where you were sitting maybe a month ago and said this is a national security threat.&rsquo;</p><ul><li><strong>&lsquo;He went to Australia,</strong> he went to all different countries in Europe and said to officials there, do not do business with Huawei. This is a danger to all the western allies.&rsquo;</li></ul><p><span class="h5p" style="color:#0970b3">Rudd:</span><strong> &lsquo;Excellent question,</strong><strong>Andrew.</strong> My successor as Prime Minister of Australia was the good loyal ally.&rsquo;</p><ul><li><strong>&lsquo;He put his hand up first</strong> and said, &ldquo;Okay, the United States has said we shouldn't do business with Huawei. We won&rsquo;t.&rdquo;&rsquo;</li><li><strong>&lsquo;He&rsquo;s been one</strong> of the few allies to have actually taken a clear position.&rsquo;</li><li><strong>&lsquo;If you were him</strong> this morning you&rsquo;d be feeling a bit like a mug.&rsquo;</li></ul><p><strong>&lsquo;But if you go to the details,</strong> if I look carefully at what Larry Kudlow has tried to do in explaining the president's fairly bold language in Osaka, which was: what we're looking at are just elements of componentry, which are sold by US firms, which Huawei can access by other firms around the world.&rsquo;</p><ul><li><strong>&lsquo;The devil</strong> will lie on the detail on this.&rsquo;</li><li><strong>&lsquo;But from a Chinese</strong> macro perspective, they see a big crack of light here.&rsquo;</li></ul><p><strong>&lsquo;So in terms of the Osaka outcome, </strong>if you sitting and in Beijing this morning, we're sitting around the politburo table - they did meet up on Monday over there - they'd saying, &ldquo;Hey, high five.&rdquo;&rsquo;</p><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;What are the chances</strong> that that you can get concessions from China that are real and lasting?&rsquo;</p><p><span class="h5p" style="color:#0970b3">Rudd:</span><strong> &lsquo;I think the Chinese move</strong> only to the extent that it suits their domestic economic agenda.&rsquo;</p><ul><li><strong>&lsquo;And what's really interesting</strong> is take some of the liberalizations recently by the Chinese on capital markets.&rsquo;</li><li><strong>&lsquo;For example,</strong> the issuing of new licenses to people like JP Morgan and others to be able to operate more freely within Chinese capital markets.&rsquo;</li><li><strong>&lsquo;You might say,</strong> well that's a good move.&rsquo;</li><li><strong>&lsquo;But you need to understand</strong> that the background of that: China faces, in the next several years the possibility of a current account deficit.&rsquo;</li><li><strong>&lsquo;They actually need</strong> net import of foreign capital in the future.&rsquo;</li><li><strong>&lsquo;So they moved</strong> to the extent that it meshes with their domestic interests.&rsquo;</li></ul><p><span class="h5p" style="color:#c80000">Q:</span> <strong> &lsquo;In terms of what happened this weekend,</strong> you said there were two things the Chinese didn't expect. One was the Huawei situation. The other no additional tariffs while we continue these talks. Does that help or hinder things in the long-term in terms of what type of deal gets put in?&rsquo;</p><p><span class="h5p" style="color:#0970b3">Rudd:</span> &lsquo;<strong>Look, if I was being blunt about it,</strong> I think the Chinese will see United States as having blinked a bit in these discussions in Osaka.&rsquo;</p><ul><li><strong>&lsquo;The Chinese will take some comfort</strong> that the bottom line is that a deal can be had, which won&rsquo;t fundamentally undermine their interest.&rsquo;</li></ul><p><strong>&lsquo;The Chinese have already published</strong> three big red lines, which they won't move on.&rsquo;</p><ul><li><strong>&lsquo;And they won&rsquo;t because</strong> it's been a front page of the Chinese newspapers and it'd be political suicide for the Communist Party to now backtrack on those.&rsquo;</li><li><strong>&lsquo;And these are big-ticket items</strong> in terms of what the United States&rsquo; negotiating position has been so far.&rsquo;</li></ul><p><strong>&lsquo;But I think</strong> the take out message from Osaka will be we can get there. &lsquo;</p><ul><li><strong>&lsquo;And the president</strong>, that is, President Trump really wants a deal.&rsquo;</li></ul></td></tr>

5. Peter Navarro on the trade war cease fire and Huawei

<tr><td class="embed-responsive embed-responsive-16by9"><iframe class="embed-responsive-item" src=""></iframe></td></tr><tr><td class="nl-post"><p class="caption">CNBC Television</p><p class="excerpt">‘5G is huge. Selling a few chips to Huawei is not’</p><p><strong>Peter Narvarro</strong> is Assistant to the President, and Director of Trade and Manufacturing Policy &ndash; and was at the table in Osaka.</p><ul><li><strong>He gave</strong> his views in a <a href="" target="_blank">CNBC video interview.</a></li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;Mr. Navarro, </strong>there were those who say we've got talks back on track, but we actually gave some things up, namely Huawei, and got nothing in return for actually getting those talks back on track. What do you say to those critics who sort of wonder about that negotiating leverage that we potentially did not use?&rsquo;</p><p><span class="h5p" style="color:#0970b3">Navarro:</span><strong> &lsquo;Well,</strong> there&rsquo;re a couple of things there.&rsquo;</p><ul><li><strong>&lsquo;What's important</strong> about this negotiation is the close personal chemistry between President Xi and President Trump.&rsquo;</li><li><strong>&lsquo;President Xi</strong> requested some relief on Huawei.&rsquo;</li><li><strong>&lsquo;Here's the important thing:</strong> US policy on Huawei with respect to 5G in this country has not changed - that will not happen.&rsquo;</li><li><strong>&lsquo;All we've done</strong> basically is to allow the sale of chips to Huawei. And these are lower tech items, which do not impact national security whatsoever.'</li><li><strong>&lsquo;Huawei</strong> remains on the entity list.&rsquo;</li></ul><p><strong>&lsquo;But more importantly,</strong> I think China gave us some things too.&rsquo;</p><ul><li><strong>&lsquo;They promised</strong> immediate and significant agricultural purchases and we hope to see immediate, immediate progress on that.&rsquo;</li></ul><p><strong>&lsquo;We will be selling</strong> a small amount of chips, less than a billion dollars worth of chips a year, to Huawei.&rsquo;</p><ul><li><strong>&lsquo;In the short run</strong> this is small in the scheme of things.&rsquo;</li><li><strong>&lsquo;In the fight for 5G</strong> President Trump is very committed to having the U.S. take the lead and to building up companies like Nokia and Erickson in Europe.&rsquo;</li><li><strong>&lsquo;5G is huge.</strong> Selling a few chips to Huawei is not.&rsquo;</li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;I guess people</strong> and some of the companies are still trying to understand exactly where we stand with Huawei because we have characterized them as a national security concern. So that continues. Then I should not take this as sort of a green light for Huawei in any real way. Just sort of a Huawei olive branch to some extent to help the Chinese at least think that we're going to help keep them in business.'</p><p><span class="h5p" style="color:#0970b3">Navarro:</span><strong> &lsquo;Yeah.</strong> I think you probably said it better than I could. There're two things going on.&rsquo;&rsquo;</p><ul><li><strong>&lsquo;One is Huawei</strong> trying to dominate 5G using the usual Chinese playbook, which is to dump product below cost, steal the technology from their rivals, and push everybody out.&rsquo;</li><li><strong>&lsquo;The problem,</strong> of course, is the software issues - one patch and you can open somebody's a system to Huawei. You got hardware problems - there can be Trojans lurking.&rsquo;</li><li><strong>&lsquo;So we have to be very clear about</strong> that, and we're going to work closely with our allies around the world to make sure Huawei 5G is not in those countries.&rsquo;</li></ul><p><strong>&lsquo;But in the meantime</strong> a small amount of low level chips are going to be sold to keep systems going.&rsquo;</p><ul><li><strong>&lsquo;That's not a bad thing</strong> when it gets us back to the bargaining table with China.&rsquo;</li><li><strong>&lsquo;And with China committing</strong> just immediate and significant purchases of agricultural goods - let's see if they deliver on that.&rsquo;</li></ul></td></tr>

6. ‘The big takeaway from this meeting is that you have a ceasefire.’: Michael Hirson, Eurasia Group

<tr><td class="bg-holder"><img width="100%" src="" alt="CHINADebate"></td></tr><tr><td class="nl-post"><p class="caption">Bloomberg</p><p class="excerpt">‘I think that both sides may be comfortable with the status quo.<br>In other words, keeping current tariffs in place, avoiding the risks of further escalation, but not making the kind of hard political decisions to actually arrive at a trade deal.’</p><p><strong>Michael Hirson</strong> is Practice Head for the China and North East Asia Regions for the Eurasia Group.</p><ul><li><strong>He gave</strong> his comments during a <a href="" target="_blank">Bloomberg audio interview</a>.</li></ul><table style="background-image: url(; margin-top:20px; margin-bottom:40px;"><tbody><tr><td class="audio-bg"><audio-from>Bloomberg</audio-from><t5>Tough China Trade Issues Still Loom Ahead: Hirson (Radio)</t5><audio id="audio-embed" width="100%" height="100%" controls=""><source src="" type="audio/mpeg"><source src="" type="audio/ogg">Your browser does not support HTML5 video.</audio></td></tr></tbody></table><p><span class="h5p" style="color:#0970b3">Hirson:</span><strong> &lsquo;The big takeaway</strong> from this meeting is the fact that you have a ceasefire.&rsquo;</p><ul><li><strong>&lsquo;A ceasefire</strong> that was really driven by the desire both by president Trump and president Xi to avoid the risks of further escalation.&rsquo;</li><li>&lsquo;<strong>But it wasn't driven</strong> by a sense that the two sides have bridged the gap on the key issues remaining on the trade dispute and the path for for Huawei going forward.&rsquo;</li><li><strong>&lsquo;It's a pause.</strong> It's positive, but the tough questions still lay ahead.&rsquo;</li></ul><p><strong>&lsquo;Another big takeaway</strong> is that China agreed to resume purchases of US agricultural goods.&rsquo;</p><ul><li><strong>&lsquo;I don't think</strong> that those are necessarily going to be large in magnitude.&rsquo;</li><li><strong>&lsquo;But it's a clear sign</strong> that President Trump is trying to reduce one of the political vulnerabilities that he has faced with the standoff, which is the pain that U.S. farmers are experiencing.&rsquo;</li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;Michael,</strong> are you surprised at all that President Trump seems to backtrack somewhat on the restrictions placed on Huawei?&rsquo;</p><p><span class="h5p" style="color:#0970b3">Hirson:</span><strong> &lsquo;We expected</strong> there to be some nod towards finding an off ramp to Huawei because otherwise I think it would've been very difficult for China to come back to the negotiating table.&rsquo;</p><ul><li><strong>&lsquo;I was a little surprised</strong> at how forward leaning the president was.&rsquo;</li><li><strong>&lsquo;Overall</strong> we felt that there was going to have to be some indication for Beijing that Trump and the U.S. are willing to explore a way to modify treatment of Huawei.&rsquo;</li><li><strong>&lsquo;But really major questions</strong> are unanswered in terms of how the U.S. expects to do that.&rsquo;</li><li><strong>&lsquo;And there's been quite</strong> the blowback already in Congress - on a bipartisan basis - from senators who view this as capitulation and want to see the knives still out on Huawei.&rsquo;</li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;Michael,</strong> do you think that the U.S. has a coherent and understandable desire for these trade discussions in terms of what they would like the end goal to be?'</p><p><span class="h5p" style="color:#0970b3">Hirson:</span><strong> &lsquo;It's a great question.</strong> There are different factions within the administration that have different goals in mind for China.&rsquo;</p><ul><li><strong>&lsquo;Some officials,</strong> I would say Treasury Secretary Mnuchin, clearly want to deal and are worried about the impact that a continued standoff or even escalation would have on U.S. economy and U.S. markets.&rsquo;</li><li><strong>&lsquo;Then on the other side</strong> of the spectrum, we've got officials like Peter Navarro who have very maximalist demands for a deal.&rsquo;<ul><li><strong>&lsquo;They would be</strong> perfectly happy with just keeping tariffs up on China, viewing that as something that throws sand in the gears of China's economy.&rsquo;</li><li><strong>&lsquo;They would like</strong> to see Huawei go down.&rsquo;</li></ul></li><li><strong>&lsquo;And then you've got officials</strong> who are sort of in the middle.&rsquo;<ul><li><strong>&lsquo;I would put Robert Lighthizer,</strong> the U.S. Trade Representative - who's really the key figure &ndash; there in the middle.&rsquo;</li><li><strong>&lsquo;He's somebody</strong> who has a tough views on China, will insist on a very strong deal, but all things equal, is a pragmatist and somebody who eventually does want to arrive at a deal.&rsquo;</li></ul></li><li><strong>&lsquo;But there are more</strong> - there's the national security and law enforcement types as well.&rsquo;</li><li><strong>&lsquo;These different factions</strong> do not necessarily come together in a coherent strategy.&rsquo;<ul><li><strong>&lsquo;And that's why</strong> we've seen pivots and reversals and moves back and forth within the Trump administration.&rsquo;</li><li><strong>&lsquo;I don't think</strong> this is going to be the last one.&rsquo;</li></ul></li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;When do you expect,</strong> if at all, that the US and China really get together and really get a real trade deal? What is the timing on that?&rsquo;</p><p><span class="h5p" style="color:#0970b3">Hirson:</span><strong> &lsquo;I think</strong> that both sides may be comfortable with the status quo.&rsquo;</p><ul><li><strong>&lsquo;In other words,</strong> keeping current tariffs in place, avoiding the risks of further escalation, but not making the kind of hard political decisions to actually arrive at a trade deal.&rsquo;</li></ul><p><strong>&lsquo;So we could very well see</strong> this status quo continue through the remainder of the year and through the remainder of this presidential term.&rsquo;</p><ul><li><strong>&lsquo;Because as President Trump</strong> gets closer to election day, he's going to be more and more reluctant to have to defend a complicated trade deal on the campaign trail.&rsquo;</li><li><strong>&lsquo;We just may see</strong> this current situation, this status quo, continue for the next year plus.&rsquo;</li></ul></td></tr>

7. ‘Trump hasn’t reversed his position on Huawei’: Michael Pillsbury

<tr><td class="bg-holder"><img width="100%" src="" alt="CHINADebate"></td></tr><tr><td class="nl-post"><p class="caption">Fox Business</p><p class="excerpt">‘Unfortunately, that what I call the Super Hawks who want to bring down the Chinese Communist Party or confront China in every possible way. The Super Hawks are now attacking the president for concessions and for reversing himself. This is just fake news.’ </p><p><strong>Michael Pillsbury</strong> is Senior Fellow and Director for Chinese Strategy&nbsp;at the Hudson Institute.</p><ul><li><strong>He advised</strong> President Trump and Trade and Manufacturing Policy Director Peter Navarro ahead of the Osaka summit.</li><li><strong>He made</strong> his comments during a <a href="" target="_blank">video interview on Fox Business.</a></li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;Michael,</strong> your initial thoughts on at least what we've heard so far coming out of this meeting?&rsquo;</p><p><span class="h5p" style="color:#0970b3">Pillsbury:</span><strong> &lsquo;Well, a lot </strong>of president Trump's critics the last couple of days are mischaracterizing what he's done.&rsquo;</p><ul><li><strong>&lsquo;He has not reversed himself</strong> on way at all on Huawei.&rsquo;</li><li><strong>&lsquo;This is quite</strong> a brilliant idea - that he can adjust.&rsquo;</li><li><strong>&lsquo;The Commerce Department </strong>can adjust to which licenses they give and which they don't give.&rsquo;</li><li><strong>&lsquo;Huawei</strong> stays on the entity list, the black list.&rsquo;</li><li><strong>&lsquo;The licenses </strong>could be granted quite quickly, let's say this week as the one for Google to provide Android apps for Huawei phones.&rsquo;</li><li><strong>&lsquo;But they </strong>can also be turned off.&rsquo;</li></ul><p><strong>&lsquo;Again, </strong>it's the same thing with the not putting the tariffs on.&rsquo;</p><ul><li><strong>&lsquo;The president </strong>hasn&rsquo;t promised he'll never put tariffs on China.&rsquo;</li><li><strong>&lsquo;He's just not mentioned </strong>it at the meeting and both cases, these are carrots to try to get Xi Jinping to send his team back to the talks.&rsquo;</li><li><strong>&lsquo;That's the huge success. </strong>That's the breakthrough of what happened.&rsquo;</li></ul><p><strong>&lsquo;Unfortunately, </strong>that what I call the Super Hawks who want to bring down the Chinese Communist Party or confront China in every possible way.&rsquo;</p><ul><li><strong>&lsquo;The Super Hawks </strong>are now attacking the president for concessions and for reversing himself.&rsquo;</li><li><strong>&lsquo;This</strong> is just fake news.&rsquo;</li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;Well, Michael,</strong> do you find an interesting that you would have a Marco Rubio and a Chuck Schumer leveling the same sort of criticism?&rsquo;</p><p><span class="h5p" style="color:#0970b3">Pillsbury:</span><strong> &lsquo;I read Marco Rubio's tweet.</strong> I have great respect for him.&rsquo;</p><ul><li><strong>&lsquo;He said if such and such,</strong> then it would be a catastrophic mistake.&rsquo;</li><li><strong>&lsquo;So he's obviously</strong> open to clarification of what actually has been done on Huawei. Obviously a total endorsement of Huawei would be a catastrophic mistake, but that isn't what the president's done at all.&rsquo;</li></ul><p><strong>&lsquo;Chuck Schumer</strong> is setting himself up very cleverly that he's tougher than Trump rhetorically in terms of words.&rsquo;</p><ul><li><strong>&lsquo;He keeps jabbing President Trump.</strong>&ldquo;Don't go soft in Osaka&rdquo; was one.&rsquo;</li><li><strong>&lsquo;Back on March 2nd</strong> he said, &ldquo;Oh, you're betraying the working man.&rdquo;&rsquo;</li><li><strong>&lsquo;But when Chuck Schumer</strong> was involved in this, in the Senate for 20 years, he never did anything, never passed any legislation, never got talks.&rsquo;</li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;The media</strong> - and we know Trump&rsquo;s relationship there - suggest that president Trump blinked, that we got nothing for it.&rsquo;</p><p><span class="h5p" style="color:#0970b3">Pillsbury:</span><strong> &lsquo;That&rsquo;s false.&rsquo; </strong></p><p><strong>&lsquo;I think it's important</strong> to underline what the real issue is here.&rsquo;</p><ul><li><strong>&lsquo;The Super Hawks</strong> have written books and articles that China is about to collapse. They see China as weak.&rsquo;</li><li><strong>&lsquo;They look at statistical indicators</strong>, and go, &ldquo;Oh my God, look at that - China is going to be on its knees now begging for a deal.&rdquo;&rsquo;</li><li><strong>&lsquo;That</strong> is just false.&rsquo;</li></ul><p><strong>&lsquo;China</strong> has a strong economy.&rsquo;</p><ul><li><strong>&lsquo;They've grown</strong> 3% to 4% faster than us for 30 years. They're almost overtaking us.&rsquo;</li></ul><p><strong>&lsquo;President Trump</strong> has now said, by my count five times, if Hillary had been elected president, China would surpass America during her terms in office.&rsquo;</p><ul><li><strong>&lsquo;&ldquo;That's not going</strong> to happen on my watch.&rdquo;&rsquo;</li></ul><p><strong>&lsquo;He says</strong> he's not a believer in the China collapse theory.&rsquo;</p><ul><li><strong>&lsquo;He thinks</strong> Xi comes from a strong country and a strong economy.&rsquo;</li><li><strong>&lsquo;That's why he's been so clever.</strong> Trump has been so clever with mixing carrots and sticks.&rsquo;</li></ul><p><strong>&lsquo;Xi did not have</strong> to come back to these talks.&rsquo;</p><ul><li><strong>&lsquo;He couldn't</strong> have just told us, &ldquo;Go to hell. I don't care what you do. Tariffs?&rsquo; 25% tariffs don&rsquo;t bother China.&rdquo;&rsquo;</li></ul><p><strong>&lsquo;Where Trump's</strong> had his huge success at Osaka: He got Xi to come back.&rsquo;</p></td></tr>

8. From the World Economic Forum in Dalian China

<tr><td class="embed-responsive embed-responsive-16by9"><iframe class="embed-responsive-item" src=""></iframe></td></tr><tr><td class="nl-post"><p class="caption">World Economic Forum</p><p class="excerpt"></p><p><strong>The WEF</strong> is currently meeting at Dalian.</p><ul><li><strong>On sesssion</strong> covered the trade war and the Osaka summit.</li><li><strong>Here are</strong> three views from the panel.</li><li><strong>You can</strong> <a href=";t=868s" target="_blank">watch the entire session here</a>.</li></ul><h5> Tim Stratford, Chairman of the American Chamber of Commerce in China and a partner at Covington &amp; Burlington in Beijing</h5><p><span class="h5p" style="color:#c80000">Q:</span> &lsquo;<strong>Is there still hope</strong> that we can actually move beyond this current trade war?&rsquo;</p><p><span class="h5p" style="color:#0970b3">Stratford:</span><strong> &lsquo;The fact</strong> that they're going to go back to the negotiating table and that additional tariffs are going to be postponed for the time being, it's really the best case scenario.&rsquo;</p><ul><li><strong>&lsquo;What we're most concerned</strong> about is all the remaining uncertainty.&rsquo;</li><li><strong>&lsquo;National security issues</strong> are being discussed at the same time the trade issues are being discussed. This makes things quite complicated.&rsquo;</li></ul><p><span class="h5p" style="color:#c80000">Q:</span> &lsquo;<strong>The security issue</strong> and the trade issue appears to have been merged through the process of these discussions over the last year or so.&rsquo;</p><ul><li><strong>&lsquo;Given your background</strong> as a trade representative for the U.S. government, do you think that has been a mistake?&rsquo;</li><li><strong>&lsquo;Would it be better</strong> to have separated this into two different issues and then we could have moved forward on trade whilst resolving the security question in another theater?&rsquo;</li></ul><p><span class="h5p" style="color:#0970b3">Stratford:</span> &lsquo;<strong>Well, national security</strong> and trade policy are different fields.&rsquo;</p><ul><li><strong>&lsquo;They have different rationales</strong> and goals that you're trying to achieve, different rules that you try to follow to achieve them.&rsquo;</li><li><strong>&lsquo;Different government agencies</strong> that are involved in trying to enforce them.</li><li><strong>&lsquo;Together</strong> they can really complicate things.&rsquo;</li><li><strong>&lsquo;I think</strong> they both need to be addressed in parallel because they impact one another, but you have to keep them separate.&rsquo;</li><li><strong>&lsquo;You can't use one as leverage</strong> for the other and come out with policy that's either coherent from an economic point of view or coherent from a national security point of view.&rsquo;</li></ul><h5> Yi Xiaozhun, Deputy Director General of the WTO </h5><p><span class="h5p" style="color:#0970b3">Yi:</span><strong> &lsquo;We are very happy</strong> to hear that both the U.S. and China have agreed to come back to the negotiating table.&rsquo;</p><ul><li><strong>&lsquo;But meanwhile</strong> many of our members hope the U.S. and China will come back to the multilateral trading system to resolve their own disputes.&rsquo;</li></ul><p><strong>&lsquo;We hope</strong> they can reach a deal is WTO-consistent.&rsquo;</p><ul><li><strong>&lsquo;Otherwise</strong> the whole system will be jeopardized.&rsquo;</li></ul><p><strong>&lsquo;And then WTO members</strong> will make their judgment as to whether the deal is consistent with multilateral rules or not.&rsquo;</p><h5> Charles Li, Chief Executive of the Hong Kong Stock Exchange</h5><p><span class="h5p" style="color:#0970b3">Li:</span><strong> &lsquo;What I don&rsquo;t see</strong> is what America wants &ndash; or which America wants what.&rsquo;</p><ul><li><strong>&lsquo;Wall Street</strong> wants something. Hollywood wants something. Silicon Valley wants something, the Bible belt wants something, the rustbelt wants something, even agriculture states want something.&rsquo;</li></ul><p><strong>&lsquo;I think</strong> in terms of three levels.&rsquo;</p><ul><li><strong>&lsquo;The first level</strong> is trade - this is all money issue.&rsquo;</li><li><strong>&lsquo;Anything</strong> that can be settled in money, for the Chinese, it&rsquo;s not a big deal, we can sort it out. Right?&rsquo;</li><li><strong>&lsquo;So from</strong> a trade perspective, we will strike a deal.&rsquo;</li><li><strong>&lsquo;The second level</strong> is behavior change. America wants China to change this and that, like intellectual property infringement.&rsquo;</li><li><strong>&lsquo;You know,</strong> sometimes it's like a China needs to stop drinking and smoking.&rsquo;</li><li><strong>&lsquo;That's harder</strong> because you&rsquo;ve been smoking for a while and drinking for a while.&rsquo;</li><li><strong>&lsquo;In the long term,</strong> the Chinese could rationalize that smoking and drinking is not great for your health, and it&rsquo;s probably is a good idea to stop at some point - but you don't give me time, I can't quit overnight.&rsquo;</li><li><strong>&lsquo;And also you have do it</strong> in a way that is respectful - you can't put a smoke detector in my house and insist on coming in and checking to see whether I smoked after dinner or not.&rsquo;</li><li><strong>&lsquo;So if America</strong> wants behavior change, I think there is the possibility of a deal.&rsquo;</li><li><strong>&lsquo;But it's going to be painful,</strong> it&rsquo;s going to be negotiated, it&rsquo;s going to need patience.&rsquo;</li><li><strong>&lsquo;Ultimately,</strong> probably something will work out.&rsquo;</li><li><strong>&lsquo;But if America</strong> wants a number three - that you have to go to church, your children have to be educated in a particular way, you have to stop eating Chinese food - it will never happen.&rsquo;</li></ul><p><strong>&lsquo;So if China reforms</strong> and opens eventually everybody will just focuses on number one, maybe a little bit number two, nobody would talk about number three.&rsquo;</p><ul><li><strong>&lsquo;But the problem</strong> is if China does not accelerate and continue to open and reform that will unite all the different factions of the United States.&rsquo;</li><li><strong>&lsquo;And then number two</strong> is always going to be on the table and number three is always going to be on the table. It will make things a lot harder.&rsquo;</li><li><strong>&lsquo;But either way,</strong> this is going to be a long, long process before it's over.&rsquo;</li></ul><p><span class="h5p" style="color:#c80000">Q:</span><strong> &lsquo;Now I know democracies can be messy,</strong> and you've talked about many constituencies that have different opinions and want different things from China, but the fact that this is now a bipartisan issue in the United States means the reality is it's not going away. And issues of IP and market access and a market dumping will continue to come up as long as this is not resolved.&rsquo;</p><p><span class="h5p" style="color:#0970b3">Li:</span><strong> &lsquo;Yeah, I agree.</strong> But I think at the end of the day China would like to continue the way it is and set the time and pace to fix his own issues.&rsquo;</p><ul><li><strong>&lsquo;That's not going to happen</strong> - America is going to press a lot harder.&rsquo; America will want everything. Hopefully you go to church too. Right?&rsquo;</li></ul><p><strong>&lsquo;But I think, in the end,</strong> the real question is what sorts of pains are you willing to take in order to achieve what?&rsquo;</p><ul><li><strong>&lsquo;So that&rsquo;s really</strong> two factors: what pain, what gain?&rsquo;</li><li><strong>&lsquo;And each group</strong> is going to want some different level of pain and some different level of gain.&rsquo;</li></ul></td></tr>