<table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#f5f5f5;"><tbody><tr><td><div><table cellpadding="0" cellspacing="0" width="100%" style=" margin:0 auto; background-color:#FFFFFF;"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="padding:3.5%; text-align:left; font-weight:700; font-style: normal; font-variant: normal; line-height: 20px;"><span style="font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 17px; color: #c80000;">CHINA</span><span style="font-family: 'Merriweather', serif; font-size: 15.5px; color: #001544;">Debate</span></td><td style="padding:3.5%; text-align:right; font-weight:normal; font-size: 14px; font-style: normal; color: #001544; font-family: 'Lato'"></td></tr></tbody></table></td></tr><tr><td style="padding:3.5%; text-align:center;"><a style="border-bottom: none;text-decoration: none;color: inherit;" href="https://www.chinadebate.com/china-macro-reporter/archive" target="_blank"><img style="width:70px; border-radius:3%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);" src="https://cdn.prod.website-files.com/5a3e922cf6b9a40001bc2d6b/5e3dbbf161e6c357b022bea5_China%20Macro%20Reporter%20.png" alt="China_Macro_Reporter"></a></td></tr><tr><td style="text-align:center; font-size: 27px; font-family: sans-serif; color:#001544; font-weight:bold; line-height: 2rem;">China Macro Reporter</td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:40px; padding-top:10px; font-size: 13px; color:#001544; font-family:'Lato', sans-serif;">By Malcolm Riddell<span style="margin:0 6px">·</span>September 30, 2020</td></tr><tr><td style="text-align:center; line-height:1.5; display:block; max-width:480px; margin:0 auto; padding:10px 0; font-size: 18px; font-family: 'Noto Serif'; color:#c80000; font-weight:normal; letter-spacing: -0.5px; border-bottom:2px solid #c80000;">Opening Statement</td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/7pLBnU?track_p_id=bNXmLKxbNI3k6icH30_QX3u" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/4x73lYAycA6tlG4fEtV_j0i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7pLBnU?track_p_id=4unGl6icH30_sYlbDo3q3U2" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">And the Winner is....</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h1 style="display: inline-block;margin-block-start: 2rem;!important: ;margin-block-end: 0.5rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 26px;line-height: 36px;font-weight: 400;letter-spacing: 0.1px;font-family: 'Lato';color: #001544;"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">On Tuesday morning,</strong> I dropped off my ballot, along with several of my fellow citizens, for the U.S. presidential election.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">As I did I felt</strong> that, despite the division in the country, the American democratic still works pretty darn well.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Then I tuned</strong> in that evening to the presidential debate.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Halfway</strong> through my confidence in the U.S. system started to falter a bit.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Okay,</strong> I was just plain shocked at what I watched.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Richard Haass,</strong> president of the Council on Foreign Relations, succinctly summarized what I was feeling in a Tweet:</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></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/KpKUFS6-h1bHvbwpiXomejl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">I've voted </strong>in every presidential election since 1976.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">By my calculation,</strong> I have voted for about as many Republican presidential candidates as Democratic ones.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">As we say in the South, </strong>I’ve never had a dog in the partisan hunt.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">I remember</strong> well watching the first televised presidential debate between Nixon and Kennedy.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></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/TLJNhCY8W3BA_ibHh-o50Dl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">And, as best </strong>I could living a long time overseas before the internet, I watched all the intervening debates.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">That said,</strong> none of those earlier debates prepared me for the one on Tuesday night.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">I could dwell</strong> on the concerns it raises about the state of the of U.S. election process and the state of U.S. democracy overall.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">But this newsletter</strong> is devoted to China specifically and international affairs more generally.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">So the question</strong> of what impact the debate could have on those two areas is the focus today.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">So, in today’s</strong> issue:</p><ol style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">And the Winner is…</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Still a 'Shining City on a Hill'?</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">How China Wins</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">A Victory for America’s Enemies…</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">...and Despair of America’s Friends</strong></li></ol><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Let me know what you think. </strong>And please forward the <strong style="font-weight: bold">China Macro Reporter</strong> to your friends and colleagues.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">All the best,</strong></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Malcolm</strong>&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">1. And the winner is...</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/vElt6DM1v8x0d06G-10gOTl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">2. Still a 'Shining City on a Hill'?</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/5IN0ro?track_p_id=7hcdoyR57mTDDy_j4s3KxWJ" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/WWkgyeyqS2Yhaedx74dduUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/5IN0ro?track_p_id=4HzV17mTDDy_fo5VNiUzSAv" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">China and other opponents of democracy are the big winners in the Trump-Biden debate chaos</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/5IN0ro?track_p_id=dLw6RNfqap3AkP7mTDDy_sZ" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img width="100%" src="https://img.scoop.it/KZlQoIcIi0tj5Wvmb7KJczl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">CNN</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘But while Beijing&nbsp;would rather not be a topic at all in the United States election, the debate as a whole will have raised spirits in the Chinese capital.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In an&nbsp;</strong><a href="https://www.cnn.com/2020/09/29/politics/us-election-first-presidential-debate/index.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">ugly, cantankerous presidential debate</strong></a><strong style="font-weight: bold">,</strong> one of the few things Donald Trump and Joe Biden agreed upon was China.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But while Beijing would</strong><a href="https://www.cnn.com/2020/08/28/asia/china-trump-rnc-speech-intl-hnk/index.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"> rather not be a topic at all in the United States election</a>, and this rare consensus represents a growing anti-China strain in Washington, the debate as a whole will have raised spirits in the Chinese capital.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘For decades,</strong> Beijing has criticized US-style democracy, holding up (very real) flaws in the American system as vindication for Chinese authoritarianism.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Anyone advancing reform or liberalization in China</strong> is forced to answer for every failure in the US, and made to justify why that will be better than the Chinese system, which may not offer much in terms of representation, but at least provides stability and economic growth.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘On Tuesday,</strong> Trump helped to bolster that view, and in turn, further erode global confidence in US-style democracy.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘For decades,</strong> the US has actively advanced its model of democracy around the world, be it through soft-power, concerted civilian-led initiatives or raw military strength.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Part of the justification</strong> for apparent US hegemony is based upon the idea of American democracy, that the US is a superpower unlike the British or Soviet empires because it is representative and its elections are free and fair.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘While the record shows</strong> plenty of gaps between Washington's supposed values and how US leadership plays out in reality, the existence of a democracy as the world's strongest power did give some credence to the system in general, much to the chagrin of authoritarians in Beijing and elsewhere.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Trump,</strong> however, has been a gift for such critics of democracy.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In 2016,</strong> following a debate between Trump and then-Democratic nominee Hillary Clinton, People's Daily, the mouthpiece of the Chinese Communist Party,&nbsp;<a href="http://en.people.cn/n3/2016/1108/c90000-9138837.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">mused</a>&nbsp;"no matter who wins, US presidential election reveals 'ill' democracy." ’ [see the next post]</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘It was hard to watch</strong> Tuesday's debate and think anything has progressed in four years.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Chinese state media coverage&nbsp;</strong><a href="https://world.huanqiu.com/article/405lIOFZGCf" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">noted the ugly tone</a>, with China Daily&nbsp;<a href="http://global.chinadaily.com.cn/a/202009/30/WS5f73dd47a31024ad0ba7cbf7_2.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">saying</a>&nbsp;"the debate seemed to reveal a genuine dislike between the two men, with no pretense of decorum." '</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Reacting to the debate,</strong> Hu Xijin, editor of the nationalist state-backed tabloid Global Times, wrote that "such a chaos at the top of US politics reflects division, anxiety of US society and the accelerating loss of advantages of the US political system." ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">3. How China Wins</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/4nvXAO?track_p_id=08mHMnW_JBPodiUaZP3fx51" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/YZjp8p-WpiYjiQRzm0_lf0i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/4nvXAO?track_p_id=2Wq8mHMnW_aLkZJOsOXGmnS" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Commentary: No matter who wins, US presidential election reveals ‘ill’ democracy - People's Daily&nbsp;</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">People’s Daily</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Yuan Peng</strong> | China Institute of Contemporary International Relations</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">'It certainly will not be viewed as a victory of democracy.'</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">'As the U.S. presidential election</strong> draws near, it has become evident that – no matter who wins – history will deem this election the most dark, chaotic and negative one in the past two centuries.'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'It certainly</strong> will not be viewed as a victory of democracy.'</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">'To begin with,</strong> the two main candidates have smeared each other in the most despicable and uncivilized ways during their many campaign speeches, causing some U.S. citizens to turn away in disgust.'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'The campaign</strong> has undeniably revealed the dark side of so-called democracy in the U.S.'</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">'Extremity and separation</strong> prevail in U.S. politics today.'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'Partisan standoffs</strong> and interdepartmental confrontations are taking place all over the country, dragging down political efficiency and disappointing the public.'</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'Even many U.S. political scholars</strong> are concerned about the future of American democracy.'</li></ul><p style="text-align: center;display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">_____________________________________</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Here’s the punchline:</strong> This was written in 2016 about the Trump/Clinton campaign.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Standby</strong> to see how the official Chinese media makes use of the Trump/Biden ‘debate’ to illustrate the ills of U.S. democracy and the superiority of the Chinese system.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">One</strong> of the first is below</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/5ALqRU?track_p_id=4UEmg950tNm_fk5ma164hN2" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/5EQKdWhKsZnRBghgjKE2xki__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/5ALqRU?track_p_id=c4E2Ybff3eyL4950tNm_Zuf" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Chaotic Trump-Biden debate shows 'recession of US influence, national power' - Global Times</a></td></tr></tbody></table></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/ajGPu5spoft3HwwCXZsFXzl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Global Times</strong>&nbsp;</h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;">The&nbsp;<em style="font-style: italic"> Global Times </em>&nbsp;is a daily&nbsp; <a href="https://en.wikipedia.org/wiki/Chinese_tabloid" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">newspaper </a> &nbsp;under the auspices of the&nbsp;<a href="https://en.wikipedia.org/wiki/Chinese_Communist_Party" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"> Chinese Communist Party</a>'s&nbsp; <a href="https://en.wikipedia.org/wiki/People%27s_Daily" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><em style="font-style: italic"> People's Daily </em></a>&nbsp;newspaper.</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">"After watching the worst debate I have ever seen, I feel sorry for American people."</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The first US presidential debate</strong> between President Donald Trump and Democrat candidate Joe Biden that finished on Wednesday just showed the world a divided and chaotic US that is no longer an attractive superpower in terms of politics and soft power.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And the embarrassing debate</strong> full of interruptions and pointless personal attacks largely reflects the recession of US national power, said Chinese analysts.’&nbsp;&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The key words</strong> showed on most US and other countries' mainstream media outlets, as well as comments on social media outlets, about the debate include:’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘embarrassment, disgrace, awful, mess and chaos.’&nbsp;</strong></li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Many Chinese netizens</strong> also commented on social media networks that the debate is more like a "low quality talk show." ’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ "After watching the worst debate</strong> I have ever seen, I feel sorry for American people," said one Chinese web user on Weibo.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And another commented</strong> on guancha.cn, a Chinese news website "Is there anyone still praising the 'charm' of the US political system?" ’&nbsp; &nbsp;&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">4. A Victory for America's Enemies...</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/6YPsUS?track_p_id=5gu44W8Nrrby_CkYtzDonw2" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/zxbyrGBKPhFFZLzMYqfYnUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6YPsUS?track_p_id=2Yy8Nrrby_yTeEWTRA%401HMP" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">A Victory for America's Enemies</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/6YPsUS?track_p_id=08Nrrby_HodROdHYnf3%40ij3" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img width="100%" src="https://img.scoop.it/Levg5OGL9KRgsAJ5CHUfUzl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Financial Times</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘No one will have savoured it more than the nation’s autocratic enemies.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Hence in a year</strong> of lethal contagion, of state violence and economic carnage, none of these troubles is quite the largest issue at stake in November.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘That is America’s democratic process</strong>’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The worst presidential debate</strong> in memory was also the most ominous.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘No one will have savoured</strong> it more than the nation’s autocratic enemies.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">5. ...and Despair Among America's Friends</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/6tR1GK?track_p_id=a%40MhkZEuaMx6D3DyQ_r4viZ" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/3QKIJ28TXRxlm_PNLipujEi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6tR1GK?track_p_id=2Zz6D3DyQ_cYK3L%40RnYHP2s" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Trump-Biden Debate Prompts Shock, Despair in Europe - and, in China, Glee</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/6tR1GK?track_p_id=06D3DyQ_iDuPR3pYMoz13Hd" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img width="100%" src="https://img.scoop.it/9A9Ip2SxG6OIFElgzA486Dl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The New York Times</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Steven Erlanger </strong>| The New York Times</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">“European leaders must have woken up this morning thinking, ‘The American leadership is over.'”</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The unedifying spectacle</strong> of Tuesday night’s&nbsp;<a href="https://www.nytimes.com/2020/09/29/us/politics/trump-biden-debate.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">presidential debate</a>&nbsp;produced some shock, some sadness and some weariness among American allies and rivals alike.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘As&nbsp;</strong><a href="https://www.nytimes.com/live/2020/2020-election-misinformation-distortions#how-voting-by-mail-tops-election-misinformation" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">President Trump&nbsp;</strong></a>bellowed, blustered and shouted down both the moderator, Chris Wallace, and his opponent, former Vice President Joseph R. Biden Jr.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And as Mr. Biden</strong> responded by calling Mr. Trump a “clown,” many wondered if the chaos and tenor of the event said something more fundamental about the state of American democracy.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘ “Of course, the ultimate arbiter</strong> will be the American voter,” said Ulrich Speck, an analyst with the German Marshall Fund in Berlin.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “But there is a consensus in Europe</strong> that this is getting out of hand, and this&nbsp;<a href="https://www.nytimes.com/2020/09/30/arts/television/donald-trump-debate.html" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">debate&nbsp;</a>is an indicator of the bad shape of the American democracy.” ’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘There was always a sense among allies</strong> that in America, despite political disagreement, “there is one republic, and conflict will be solved by debate and compromise,” and “that power was married to some kind of morality,” Mr. Speck said.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But that view</strong> is now being questioned, he said.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Many, if not most,</strong> European analysts blamed Mr. Trump for the mess.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “The debate was a joke,</strong> a low point, a shame for the country,” Markus Feldenkirchen of the German newsmagazine Der Spiegel&nbsp;<a href="https://twitter.com/MFeldenkirchen/status/1311136035284320257" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">posted on Twitter</a>.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “Roaring, insults,</strong> two over-70s who interrupt each other like 5-year-olds — and a moderator who loses all control. The trigger, of course: Trump’s uncouth, undignified behavior.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘John Sawers,</strong> a former British diplomat and head of a risk analysis firm, said simply:’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “My own response</strong> is that it makes me despondent about America. The country we have looked to for leadership has descended into an ugly brawl.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Jeremy Shapiro,</strong> a former American diplomat who is now research director of the European Council on Foreign Relations, said that foreigners would probably view the debate “as another sign of the degradation of American democracy,” as some Americans do.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The debate</strong> will not change foreign opinions of Mr. Trump or Mr. Biden, he said, but underneath the spectacle is something more troubling.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Both allies and rivals</strong> “see Trump and the political culture that created him heralding the decline of American democracy and American culture,” Mr. Shapiro said.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘That judgment</strong>, he added, is “only heightened by the coronavirus response, not just American absence in global leadership but the striking incompetence in dealing with it at home.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The coarseness of the debate</strong> will resonate abroad, Mr. Shapiro said. “Biden on that stage calling the president of the United States a clown and a liar is not something Biden would have done four years ago under any circumstances,” he said.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “That he felt</strong> he has to do it is a sign to outsiders that American culture is in a cycle of decline.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Thomas Gomart,</strong> director of the French Institute of International Relations, said that the debate strengthened the impression “that the United States has retreated from the global stage and withdrawn into itself.” ’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Mr. Trump,</strong> he said, “has explicitly walked away from the position of a global leader, and Joe Biden may be implicitly doing so, too.” ’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Mr. Gomart said</strong> the debate showed the deep partisanship of today’s America, even in the face of the pandemic. “Those two men are from the same generation, from the same world,” he said. “And yet they are the two faces of a deeply polarized society.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘That view was shared by Nicole Bacharan,</strong> a French-American historian and political analyst who lives in France. She said she was “dismayed,” by what she saw in the debate, adding: “It sent a depressing image of the United States, of the American democracy and its role in the world.” ’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The events</strong> seem bound to heighten European anxieties, Ms. Bacharan said. “European leaders must have woken up this morning thinking, ‘The American leadership is over, and for a while, even if Biden is elected and tried to rebuild what Trump has destroyed,’” she said.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The damage</strong> that has been done to trans-Atlantic relations will at best take years to repair, she added.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “The truth is,</strong> the European leaders feel alone because they know that what Trump has dismantled cannot be rebuilt so quickly and so easily,” she said.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “As for the others, </strong>Putin, Bolsonaro, Erdogan, they must be telling themselves what we already knew: They can do everything, because the U.S. isn’t a leader anymore.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div></td></tr></tbody></table>

<table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#f5f5f5;"><tbody><tr><td><div><table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#FFFFFF;"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="padding:3.5%; text-align:left; font-weight:700; font-style: normal; font-variant: normal; line-height: 20px;"><span style="font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 17px; color: #c80000;">CHINA</span><span style="font-family: 'Merriweather', serif; font-size: 15.5px; color: #001544;">Debate</span></td><td style="padding:3.5%; text-align:right; font-weight:normal; font-size: 14px; font-style: normal; color: #001544; font-family: 'Lato'"></td></tr></tbody></table></td></tr><tr><td style="padding:3.5%; text-align:center;"><a style="border-bottom: none;text-decoration: none;color: inherit;" href="https://www.chinadebate.com/china-macro-reporter/archive" target="_blank"><img style="width:70px; border-radius:3%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);" src="https://cdn.prod.website-files.com/5a3e922cf6b9a40001bc2d6b/5e3dbbf161e6c357b022bea5_China%20Macro%20Reporter%20.png" alt="China_Macro_Reporter"></a></td></tr><tr><td style="text-align:center; font-size: 27px; font-family: sans-serif; color:#001544; font-weight:bold; line-height: 2rem;">China Macro Reporter</td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:40px; padding-top:10px; font-size: 13px; color:#001544; font-family:'Lato', sans-serif;">By Malcolm Riddell<span style="margin:0 6px">·</span>September 26, 2020</td></tr><tr><td style="text-align:center; line-height:1.5; display:block; max-width:480px; margin:0 auto; padding:10px 0; font-size: 18px; font-family: 'Noto Serif'; color:#c80000; font-weight:normal; letter-spacing: -0.5px; border-bottom:2px solid #c80000;">Opening Statement</td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/7k3o0W?track_p_id=6GsoVhy7M8Q0c_Tydd56cdS" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/4x73lYAycA6tlG4fEtV_j0i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7k3o0W?track_p_id=1N7M8Q0c_rxuBvVs5IkROrT" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">A Few Useful Correctives About China</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h1 style="display: inline-block;margin-block-start: 2rem;!important: ;margin-block-end: 0.5rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 26px;line-height: 36px;font-weight: 400;letter-spacing: 0.1px;font-family: 'Lato';color: #001544;"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">In today’s</strong> issue:</p><ol style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">A Tale of Two Chinese Economies</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Why China’s Economic Recovery is So Uneven</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">What Would Happen If the U.S. Recognized Taiwan</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Thunder Out Congress</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Apple in China</strong></li></ol><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><br></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">This issue</strong> is devoted to correctives to:</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">The idea </strong>that China’s economy is making a sustainable recovery. China in fact is still juicing with infrastructure spending and debt.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">The feeling </strong>that China and the U.S. won’t go to war over Taiwan. They certainly might, and it’s a lot more likely than you think.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">The impression</strong> that to understand U.S. policy toward China, you just have to watch the administration. You have to watch Congress too.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">The assertions</strong> about size the U.S. trade deficit with China, with Apple as the example. Bad trade accounting, bad trade policy.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Keeping these in mind</strong> will improve analysis of China's economy (it's really not so great), lead to better assessment of geopolitical risk (read Taiwan - war really is possible), give a keener understanding of where U.S.-policy toward China is going (track actions in Congress), and lead to a re-think about trade accounting (it just doesn't capture trades flows well at all).</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><br></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">1. A Tale of Two Chinese Economies</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Relying on analysis </strong>from Kevin Rudd and Dan Rosen and their ‘China Dashboard,' the WSJ Editorial Board concludes:</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Investors around the world</strong> appear to be taking comfort in the revival of China’s economy, but the question has to be which Chinese economy they’re watching.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘There are two,</strong> and Beijing is subsidizing growth in the wrong one.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Look beyond encouraging data</strong> such as the second quarter’s above-3% GDP growth, and what’s reviving is the export-and-government-driven manufacturing economy.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">There are a few points</strong> in the editorial with which I disagree (and feel don’t accurately represent the findings of the ‘China Dashboard’).</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Still an important corrective</strong> to the exuberance in some corners.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">2. Why China’s Economic Recovery is So Uneven</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The China Dashboard,’</strong> put out quarterly by the Asia Society Policy Center and the Rhodium Group, is one of best and most useful analyses of China economy.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">And while it’s one you should</strong> definitely have bookmarked, it doesn’t get a lot media coverage.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Now Kevin Rudd and Dan Rosen,</strong> respective heads of the organizations just above, have published their findings in a Wall Street Journal op-ed. Bottom lines:</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China’s growth spurt</strong> isn’t the beginning of a robust recovery but an uneven bounce fueled by infrastructure construction.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">China is backsliding </strong>badly on its promised economic reforms – and will pay a price.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">3. What Would Happen If the U.S. Recognized Taiwan</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">&nbsp;'In relations between Beijing and Washington,</strong> at their lowest point in decades, an increasingly dangerous flashpoint is Taiwan,' writes Admiral James Stavridis, former Supreme Allied Commander of NATO. &nbsp;&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">The Trump administration has been stepping up U.S. relations with Taiwan, with more to come.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Taken together,</strong> such actions could convince President Xi that the time has come for more cross-strait military action.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘And there will be a temptation</strong> for whoever wins in November to move closer to Taiwan, and even consider formally recognizing Taipei.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘This would have an explosive effect</strong> on the U.S.-China relationship and could trigger a full-scale Chinese invasion of the island.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">What I find most interesting here </strong>is that someone as serious as Admiral Stavridis is bringing up the question at all.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Leading me to wonder</strong> just why the admiral is especially concerned now.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">And what he might know </strong>that we don’t</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">4. Thunder Out Congress</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Regular readers</strong> know that I have often recommended watching Congress as well as the administration to understand the direction of U.S. policy toward China.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Although not many China-related bills</strong> have been passed, those introduced indicate the trajectory of attitudes toward and remedies for perceived China problems.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Scott Kennedy of CSIS</strong> has made an excellent analysis of what’s been happening in Congress – backed by the numbers. A couple of interesting points:</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">The concern is bipartisan</strong> – both Republicans and Democrats have introduced a similar number of bills. Somewhat more from the Republicans.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Of those introduced,</strong> only 12 have become law, but an important 12.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><br></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">5. Apple in China</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">The USC U.S.-China Institute</strong> has produced a handy infographic about Apple and China. And the most important point (an understanding of which might have avoided the trade war - no probably not):</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘For the US$451</strong> experts estimate it costs to make a new iPhone, only US$14 stays in China’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Bad trade accounting, </strong>bad trade policy.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;</p><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">Go deeper into these issues - Browse the posts below.</strong></em></h2><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">To read the original article, click the title.</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Let me know what you think. </strong>And please forward the <strong style="font-weight: bold">China Macro Reporter</strong> to your friends and colleagues.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">All the best,</strong></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Malcolm</strong>&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">1. A Tale of Two Chinese Economies</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/74Pzoe?track_p_id=7SE2p3Yy8r1eKE_QM4W1v5K" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/74Pzoe?track_p_id=08r1eKE_qHUPHk3JWYvlQH%40" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">A Tale of Two Chinese Economies</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The Wall Street Journal</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The Editorial Board</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘Look beyond encouraging data such as the second quarter’s above-3% GDP growth, and what’s reviving is the export-and-government-driven manufacturing economy.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Investors around the world</strong> appear to be taking comfort in the revival of China’s economy, but the question has to be which Chinese economy they’re watching.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘There are two,</strong> and Beijing is subsidizing growth in the wrong one.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Look beyond encouraging data</strong> such as the second quarter’s above-3% GDP growth, and what’s reviving is the export-and-government-driven manufacturing economy.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘As of August,</strong> manufacturing investment is positive again and this is driving industrial production and exports.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘But the Chinese economy</strong> comprised of household consumers—ordinary Chinese people—is stuck in the doldrums.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The unemployment rate</strong> is falling, to 5.6% in August. But this measures only some urban workers, and the true level of unemployment and underemployment almost certainly is much higher.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The best reason for optimism</strong> is that consumer spending perked up in August. This was mostly concentrated in luxury goods, however—and in China stockpiling jewelry and handbags constitutes a form of saving.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The explanation for this divergence</strong> is straightforward, as Kevin Rudd and Daniel Rosen explained recently in these pages [see the posts below].’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘President Xi Jinping</strong> still talks a good game about economic reform, but he has all but abandoned many of the overhauls his predecessors attempted.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In the broadest terms,</strong> China no longer seeks to attract a wide variety of foreign investment as a path toward higher productivity and more economic opportunities.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Instead,</strong> since the 2008 financial panic and especially since Mr. Xi took power in 2012, Beijing has relied on debt-fueled stimulus of manufacturers and local governments to avert recessions.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The trend</strong> is pronounced in the months since the coronavirus pandemic took hold.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The main difference</strong> between today and a decade ago is the way Beijing is financing this binge.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Then policy makers</strong> leaned heavily on state-owned banks to supply credit, including to local governments.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Now the government</strong> is issuing bonds directly.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘This may be somewhat better</strong> for financial stability, but it doesn’t make capital spending undertaken with borrowed funds any more productive.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The consequences</strong> are less clear-cut but they matter immensely.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">The true state of health</strong> of China’s economy will have serious economic and political implications.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘On the economics,</strong> it matters that the world’s second-largest economy isn’t playing its part to support the global recovery from the virus.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Its 1.4 billion worker-consumers</strong> should be powering a global rebound. Instead Beijing is depending on the rest of the world to continue absorbing Chinese exports.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Expect </strong>this to stoke more hostility to trade across the West.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The political significance</strong> of Mr. Xi’s economic mercantilism is harder to predict.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China’s lingering unemployment crisis</strong> and household saving behavior suggests ordinary Chinese are skeptical of the current recovery.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Mr. Xi’s authoritarian turn</strong> might free him from some concerns about that sentiment spilling into open opposition to his rule.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But it’s notable</strong> that the Communist Party is going to such great lengths to persuade Chinese that its economic model is working.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">2. Why China's Economic Recovery is So Uneven</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/7MaK8m?track_p_id=5ZhZji7Bm3lG_6Zf5PdSqNq" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7MaK8m?track_p_id=2tf7Bm3lG_dBWrME36qnIS1" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Part 1 | An Investment-Driven Recovery</a></td></tr></tbody></table></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/TQq1OU8Xzs2mYWQzByjyADl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The Wall Street Journal</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Kevin Rudd</strong> | president of the Asia Society Policy Institute &amp; former Australian prime minister</h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Dan Rosen</strong> | Rhodium Group.</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘China’s growth spurt isn’t the beginning of a robust recovery but an uneven bounce fueled by infrastructure construction.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘China is the only major world economy</strong> reporting any economic growth today, grinding out 3.2% growth in the most recent quarter while the U.S. shrank 9.5% and other advanced economies endured double-digit declines.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘This rebound is real,</strong> but behind the short-term numbers the economic restart is dubious.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘China’s growth spurt</strong> isn’t the beginning of a robust recovery but an uneven bounce fueled by infrastructure construction. Second-quarter data showed the same imbalance other nations are wrestling with:’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Investment</strong> contributed 5 percentage points to growth, while consumption fell, subtracting 2.3 points.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘An honest look</strong> at the forces behind China’s growth this year shows a doubling down on state-managed solutions, not real reform. State-owned entities, or SOEs, drove China’s investment-led recovery.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In the first half of 2020,</strong> according to China’s National Bureau of Statistics, fixed-asset investment grew by 2.1% among SOEs and decreased by 7.3% in the private sector.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Finished product inventory</strong> for domestic private firms rose sharply in the same period—a sign of sales difficulty—while SOE inventory decreased slightly, showing the uneven nature of China’s growth.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Perhaps</strong> the most significant demonstration of mistrust in markets is the “internal circulation” program [covered in the previous issue] first floated by President Xi Jinping in May.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘On the surface,</strong> this new initiative is supposed to expand domestic demand to complement, but not replace, external demand.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘But Beijing</strong> is trying to boost home consumption by making it a political priority.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Dictating to markets</strong> and decreeing that consumption will rise aren’t the hallmarks of an advanced economy.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘China also faces</strong> mounting costs abroad.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘By pumping up production</strong> over the past six months, as domestic demand stagnated, Beijing has ballooned its trade surplus, fueling an international backlash against state-driven capitalism that goes far beyond Washington.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘For years,</strong> the world has watched and waited for China to become more like a free-market economy, thereby reducing American security concerns.'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China’s economic norms</strong> are diverging from, rather than converging with, the West’s.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Long-promised changes</strong> detailed at the beginning of the Xi era haven’t materialized.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Though Beijing talks</strong> about “market allocation” efficiency, it isn’t guided by what mainstream economists would call market principles.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The Chinese economy</strong> is instead a system of state capitalism in which the arbiter is an uncontestable political authority. ‘</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘That may or may not work for China,</strong> but it isn’t what liberal democracies thought they would get when they invited China to take a leading role in the world economy.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/7ekeSu?track_p_id=dPObKtzJhkuKXu7CuSHW_Dv" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7ekeSu?track_p_id=9HQmBZt3LS7CuSHW_vc%40Ei4" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Part 2 | China Backslides on Economic Reform</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/7ekeSu?track_p_id=3rmZ7CuSHW_U3NmSVAJkcQ6" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img width="100%" src="https://img.scoop.it/ivtTDXY0xgkB34tfsbGUgjl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The Wall Street Journal</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Kevin Rudd</strong> | president of the Asia Society Policy Institute &amp; former Australian prime minister</h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Dan Rosen</strong> | Rhodium Group.</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">'Under Xi Jinping, Beijing hasn’t liberalized. It’s doubled down on politically directed state capitalism.'</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Since 2017,</strong> the&nbsp;<a href="https://chinadashboard.asiasociety.org/china-dashboard/" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">China Dashboard</a>, a joint project of Rhodium Group and the Asia Society Policy Institute, has tracked economic policy in China closely for signs of progress.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Despite repeated commitments</strong> from Chinese authorities to open up and address the country’s overreliance on debt, the China Dashboard has observed delayed attempts and even backtracking on reforms.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Covid-19 outbreak</strong> offered an opportunity for Beijing to shift course and deliver on market reforms.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Signals from leaders</strong> this spring hinted at fixing defunct market mechanisms.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘But notably,</strong> the long list of reforms promised in May was almost the same as previous lists—such as separating capital management from business management at state firms and opening up to foreign investment while increasing the “quality” of outbound investment—which were adopted by the Third Plenum in 2013.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In other words,</strong> promised recent reforms didn’t happen, and nothing in the new pronouncements explains why or how this time will be different.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/7wuyn2?track_p_id=dwpHP6KLsZv4Xs8AEcT0_H2" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/_UHXqIfFomDPTH9OMq5qfki__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7wuyn2?track_p_id=5GDWEW8AEcT0_kocaOVOy22" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Terrific Resource: 'The China Dashboard' </a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/7wuyn2?track_p_id=08AEcT0_PvE%40fpAU3KFXbYD" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img width="100%" src="https://img.scoop.it/BOWHoH_A4XvZBUPbHUIE_zl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Asia Society Policy Institute &amp; Rhodium Group</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">“The China Dashboard: Tracking China’s Economic Reform Program” delivers a series of data visualizations tracking China’s progress toward its self-defined reform objectives in 10 essential economic policy clusters.</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">A terrific resource on China's economy, published four times a year – great graphs and commentary.</strong></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><a href="https://chinadashboard.asiasociety.org/summer-2020/page/overview" target="_blank" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Here's</strong></a><strong style="font-weight: bold"></strong>the latest.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">And read </strong>the entire 36-page report <a href="https://arraysproduction-0dot22.s3.amazonaws.com/aspi/websites/5f5296781c87150b87cce8d1/pages/5f5296791c87150b87cce8d3/pdf/The_China_Dashboard--Summer_2020--Full_Report.pdf" target="_blank" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">here</a>.</li></ul><p style="text-align: center;display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">______________________________________</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The China Dashboard: Tracking China’s Economic Reform Program</strong>, a joint project of the Asia Society Policy Institute and the Rhodium Group, delivers a series of data visualizations tracking China’s progress toward its self-defined reform objectives in 10 essential economic policy clusters.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Dashboard</strong> was born in the hope that China would prioritize convergence with liberal economic norms, and when it did so, that would be observed abroad in a timely manner so that an international consensus about mutual interdependence could be achieved.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘At a time of profound systemic dilemmas</strong> around the world, our indicators do present a conclusion, and it is consistent with China’s own policy pronouncements: China has not implemented reform in recent years and under the flag of COVID-19 is further deferring market liberalization even while talking about the importance of market allocation efficiency.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘This reality</strong> is driving the systemic rivalry with market democracies and will likely do so for some years to come regardless of electoral outcomes in any given nation.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">3. What would happen if the US recognized Taiwan?</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/8XFdRI?track_p_id=eIuoqYN6WEhcV357ov2Lu_C" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/qEkV02U-QW3pdvCJaMF2VUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/8XFdRI?track_p_id=btFYlQaYW2ht7ov2Lu_Ourx" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">What would happen if the US recognized Taiwan?</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/8XFdRI?track_p_id=07ov2Lu_iam3WodrrNlgPwH" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img width="100%" src="https://img.scoop.it/FBzLnS8S5Y0Jze5ObCPTajl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Nikkei Asian Review</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Admiral James Stavridis&nbsp;</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;">former Supreme Allied Commander of NATO and Dean of the Fletcher School of Law and Diplomacy at Tufts University</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘U.S. diplomatic recognition of Taiwan would have unpredictable and extremely dangerous consequences for both nations, the region, and of course for Taiwan, which would end up as ground zero in the fight.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">'In relations</strong> between Beijing and Washington are at their lowest point in decades, an increasingly dangerous flashpoint is Taiwan.'</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">'There are certainly strong signs</strong> of a warming relationship between Washington and Taipei.'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'And with the coming U.S. election</strong> likely to prompt an increase in disagreements between China and the U.S. -- especially as the competition for influence and power in the emerging markets of sub-Saharan Africa and Latin America continues -- there will be a temptation for whoever wins in November to move closer to Taiwan, and even consider formally recognizing Taipei.'</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Is the U.S. actually</strong> considering formal recognition of Taiwan?’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And if the U.S.</strong> attempted to do so, what is the likely outcome?’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Watch out for more actions</strong> from the U.S. that could antagonize Beijing, including:'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘fresh high-level official visits</strong> to Taiwan; the shifting of more advanced fighter aircraft to Guam; further U.S. sanctions that interfere with Chinese microchip access; or added sanctions directed against individual members of the Chinese Communist Party and their families.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Taken together,</strong> such actions could convince President Xi that the time has come for more cross-strait military action.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Especially </strong>if there is a period of confusion in the U.S. following the November election.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In addition</strong> to the type of cross-strait warplane incursions seen last weekend, other military actions could take the form of:’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘a significant Chinese military exercise</strong> in the waters around Taiwan; cyberattacks against key social networks on the island; the emergence in Taiwan of "sleeper cells," with so-called "little green men" in unmarked uniforms or civilian clothes moving to sow chaos; heightened submarine activity in the coastal waters off Taiwan; and military strikes against the channel islands including Quemoy, Matsu, and Penghu.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China's Coast Guard and fishing fleet</strong> could also be a factor in the waters around the island, conducting surveillance and offensive electronic warfare, all accompanied by a significant diplomatic and public disinformation campaign.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;<strong style="font-weight: bold">‘The coming U.S. election</strong> likely to prompt an increase in disagreements between China and the U.S.’ &nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And there will be a temptation</strong> for whoever wins in November to move closer to Taiwan, and even consider formally recognizing Taipei.’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘This would have an explosive effect</strong> on the U.S.-China relationship and could trigger a full-scale Chinese invasion of the island.’ &nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Events</strong> could then easily spin out of control, leading to a U.S. military response against any Chinese offensive action on Taiwan.’ &nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘How would the world</strong> respond?’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘There would likely be</strong> a combination of supporting intelligence operations; diplomatic protests at the United Nations; a worldwide influence campaign to condemn Chinese aggression; economic sanctions on Chinese goods; outright U.S. military assistance to Taiwan; and the flying of U.S. defensive counter-air sorties from Guam or even from Taiwanese bases.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'Naval interdiction</strong> and ground troop deployment would be unlikely given the significant potential to lead to great power war, something both sides would try to avoid.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In short,</strong> U.S. diplomatic recognition of Taiwan would have unpredictable and extremely dangerous consequences for both nations, the region, and of course for Taiwan, which would end up as ground zero in the fight.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">4. Thunder Out of Congress on China&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/8pPxlQ?track_p_id=4dNyM8bR6Pm_ScsZI5nQq1H" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/VcdAHHrWxK2Oai7z2r1MjUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/8pPxlQ?track_p_id=9YTpuczN3I8bR6Pm_jGwbG5" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Thunder Out of Congress on China&nbsp;</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/8pPxlQ?track_p_id=dP31KE46ymRCfG8bR6Pm_k5" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img width="100%" src="https://img.scoop.it/Z2c-7BGMrNxr0R2YDvK95Dl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Center for Strategic &amp; International Studies</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Scott Kennedy</strong> | Center for Strategic &amp; International Studies</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘Although the vast majority of introduced bills haven’t made it to the President’s desk (and in most cases, even out of committee), Congress has had a growing effect on American China policy.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Trump administration</strong> has been rolling out new measures on China seemingly almost every day.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The institution</strong> at the other end of Pennsylvania Avenue – the Congress - has also ramped up its activity on China.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Most bills address a single issue,</strong> but some cover multiple China-related topics.'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘As Figure 1 shows,</strong> the greatest focus, not surprisingly, has been on trade, commerce and investment.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But the proposed legislation</strong> runs the gamut of issues, including supply chain security, defense and national security, human rights and democracy, the coronavirus, and immigration.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></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/2IEeRa5K0gpQJ-_H3dGgFzl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Applying a partisan lens</strong> to the data reveals noticeable similarities and differences between Republicans and Democrats on China.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Republican members of Congress</strong> have been somewhat more active than their Democratic counterparts.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Though not the only factor,</strong> the spike in Republican-sponsored legislation coincided with the formation of the&nbsp;<a href="https://www.republicanleader.gov/leader-mccarthy-announces-china-task-force/" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">House Republican China Task Force</a>, which is geared toward having Republicans coordinate legislation.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The</strong><strong style="font-weight: bold">prominence of bipartisan concern</strong> on China policy more generally stands out, particularly in an era when there are wide partisan gulfs on so many other areas.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Although there has been a large jump</strong> in the number of bills introduced by members of both parties, as Figure 4 shows, there has not been an equivalent rise in the number of enacted laws.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘According to the collected data,</strong> of the 366 bills introduced, 19 were passed only by the House of Representatives, 7 made it through only the Senate, and just 12 passed both houses and were signed into law by the President.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Of course,</strong> some bills that are introduced individually end up being folded into a larger appropriations or authorization bill or some other vehicle, and there is still time for some other bills to be adopted before this session closes.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></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/paIUDhhUJ8kRnwyhhvc9oTl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Nevertheless,</strong> the basic conclusion still stands; a lot more ideas have been proposed than have been adopted.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And so, from a quantitative point of view,</strong> as the Chinese saying goes, there’s been “loud thunder but little rain” (雷声大雨点小).’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Nevertheless,</strong> the 12 bills that have been introduced and made it into law so far in the 116th Congress&nbsp;have been impactful.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The “Secure 5G and Beyond Act of 2019”</strong> will mean greater investments in critical infrastructure technology from trusted (non-Chinese) suppliers.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘According to the&nbsp;</strong><a href="https://www.washingtonpost.com/opinions/2019/12/17/congress-china-dont-trust-verify/" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Washington Post</strong></a><strong style="font-weight: bold">,</strong> the National Defense Authorization Act for FY2020, passed in December 2019, references China over 200 times in its conference report and includes a large number of measures meant to counter China’s growing military prowess.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The two laws on Hong Kong</strong> show that US concern about the city is shared by both the Executive branch and Congress and is fully bipartisan, and so one can expect sustained U.S. opposition to the encroachments on Hong Kong’s autonomy and the violation of Beijing’s commitment to maintain the “one country, two systems” in word and deed until at least 2047.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Although the vast majority</strong> of introduced bills haven’t made it to the President’s desk (and in most cases, even out of committee), Congress has had a growing effect on American China policy.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Congressional attention to China</strong> is unlikely to wane; we should expect it to continue to expand in the coming years.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘This will be reflected</strong> not only in introduced and adopted bills and resolutions, but also through hearings meant to shed light on critical issues as well as hold the executive branch accountable, investigations, and congressional letters to executive branch officials and agencies.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Hence,</strong> the thunder we witnessed this year may be followed by a deluge of rain when the 117th Congress comes to order in January.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">5. Apple in China</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/97aI5Y?track_p_id=07lxuqU_ESv1oyh41%40tdHTu" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/QLSVUPnsInpGj0GCTCtxYUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/97aI5Y?track_p_id=07lxuqU_dI2IKWFKZGx2zIU" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Infographic | Visualizing Apple in China&nbsp;</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">USC - U.S.-China Institute</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘For the US$451 experts estimate it costs to make a new iPhone, only US$14 stays in China’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><em style="font-style: italic"><strong style="font-weight: bold">Great infographic below.</strong></em></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Apple has sold</strong> over 2.2 billion iPhones since 2007, many of them in China.'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Those iPhones </strong>(and iPads, etc.) were assembled in China.'</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘But for the US$451</strong> experts estimate it costs to make a new iPhone, only US$14 stays in China:'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘US$7 to Foxconn</strong> and US$7 to the workers it employs.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘China's workers</strong> and its giant phone market helped Apple become the first company worth US$2 trillion.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The iPhone</strong> is not as popular in China as in the past.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Just two years ago,</strong> Apple sold most of the more expensive phones in China.'</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In 2019,</strong> however, Apple only won over 9% of China's buyers.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></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/8BILYXeMdsMLo9BbePPhnjl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div></td></tr></tbody></table>

<table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#f5f5f5;"><tbody><tr><td><div><table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#FFFFFF;"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="padding:3.5%; text-align:left; font-weight:700; font-style: normal; font-variant: normal; line-height: 20px;"><span style="font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 17px; color: #c80000;">CHINA</span><span style="font-family: 'Merriweather', serif; font-size: 15.5px; color: #001544;">Debate</span></td><td style="padding:3.5%; text-align:right; font-weight:normal; font-size: 14px; font-style: normal; color: #001544; font-family: 'Lato'"></td></tr></tbody></table></td></tr><tr><td style="padding:3.5%; text-align:center;"><a style="border-bottom:none; text-decoration:none;" href="https://www.chinadebate.com/china-macro-reporter/archive" target="_blank"><img style="width:70px; border-radius:3%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);" src="https://cdn.prod.website-files.com/5a3e922cf6b9a40001bc2d6b/5e3dbbf161e6c357b022bea5_China%20Macro%20Reporter%20.png" alt="China_Macro_Reporter"></a></td></tr><tr><td style="text-align:center; font-size: 27px; font-family: sans-serif; color:#001544; font-weight:bold; line-height: 2rem;">China Macro Reporter</td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:40px; padding-top:10px; font-size: 13px; color:#001544; font-family:'Lato', sans-serif;">By Malcolm Riddell<span style="margin:0 6px">·</span>Sept 23, 2020</td></tr><tr><td style="text-align:center; line-height:1.5; display:block; max-width:480px; margin:0 auto; padding:10px 0; font-size: 18px; font-family: 'Noto Serif'; color:#c80000; font-weight:normal; letter-spacing: -0.5px; border-bottom:2px solid #c80000;">Opening Statement</td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="" target="_blank" title="Malcolm_Riddell"><img height="50px" width="auto" alt="Malcolm_Riddell" src="https://img.scoop.it/4x73lYAycA6tlG4fEtV_j0i__cjguAuwrRM5-qsdIhQ=('/crop/45')" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/701CEa?track_p_id=eVXKGC66u6w2nus8FjIzu_W" style="color:#001544; font-size:28px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Where Trump and Biden Stand on China</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h1 style="display: inline-block;margin-block-start: 2rem;!important: ;margin-block-end: 0.5rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 26px;line-height: 36px;font-weight: 400;letter-spacing: 0.1px;font-family: 'Lato';color: #001544;"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">In today’s issue</strong></p><ol style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">China Tech Bans as Geopolitical Tools</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Oracle and Walmart's TikTok Deal</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Xi's Latest Top to Bottom Control Efforts</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">European Business in China – Position Paper 2020/2021</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Where Trump and Biden Stand on China</strong></li></ol><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">1.China Tech Bans as Geopolitical Tools</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">This summer</strong> we’ve bans or threatened bans on Chinese tech from India, the EU, and the U.S.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">It’s tempting</strong> to see these as either trade or national security moves or both.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">But, as Connor Fairman</strong> of the Council on Foreign Relations points out:</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘These threats have existed for a while,</strong> however, and the more immediate causes are geopolitical incidents involving China.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Against this geopolitical backdrop,</strong> banning Chinese tech products is an attractive tool for many policymakers because it allows them to push back against China without risking military escalation.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Here’s something</strong> to keep an eye on:</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Leaders from smaller</strong> but still dynamic markets, though, could be tempted to follow India’s example, banning Chinese tech companies’ products when military or diplomatic options are unattractive or unavailable.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Now that India, the European Union, and the United States</strong> seem to have settled on banning Chinese tech products, other countries with active disputes against China could see that as their cue to follow suit at the next opportunity.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">So the tide could turn</strong> even more sharply against Chinese tech companies, further complicating issues from the U.S.-China tech war.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><br></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">2. Oracle and Walmart's TikTok Deal</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">I have only been watching</strong> the TikTok saga out of the corner of my eye.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">I only started</strong> paying attention when I thought a deal had been reached.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Wrong, it turns out.</strong> We still don’t have a final deal but, according to reports, contradictory representations of a deal from both sides.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">The deal</strong> so far though seems not to meet President’s Trump’s requirements (even though he has so far signed off).</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">And the Chinese </strong>seem equally unhappy (and may not sign off).</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">At least now</strong> it’s getting interesting. Stay tuned.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">3. Xi's Latest Top to Bottom Control Efforts</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Since taking office</strong> (and the reason he was given the office), General Secretary Xi has aimed to bring China’s political, economic, and social worlds under firm Chinese Communist Party Control.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">But there are still gaps,</strong> and in the past week, he has worked to fill two of them.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">The first </strong>was to squelch any dissent among China’s elites,</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Ren Zhiqiang</strong> – wealthy, politically connected, and scion of a Communist family – was sentenced to 18 years in prison.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">The charges </strong>were graft, taking bribes, and the like.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">But more likely</strong> ‘his real crime was criticizing the Communist Party and calling the country’s hard-line leader, Xi Jinping, a “clown.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Mr. Ren’s punishment</strong> has underlined how far Mr. Xi has rolled back allowances for dissent, even from members of the elite.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">“Cracking down on Ren Zhiqiang,</strong> using economic crimes to punish him, is a warning to others — killing one to warn a hundred,” said Cai Xia.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">The second</strong> was to bring the private sector under Party control.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Through carrots &amp; sticks</strong> this has been going on for a long time. But now it’s formal policy.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘ “Unify members of the private sector</strong> around the party, and do better in promoting the healthy development of the private economy,” Mr. Xi said in&nbsp;<a href="http://cpc.people.com.cn/n1/2020/0917/c64036-31864383.html" rel="nofollow">orders to officials</a>.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The new directives</strong> call for ensuring that China’s rising capitalists are recruited into the party’s “united front” of allies, ready to support the government’s economic and political priorities.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">These again</strong> raise the question of how much control will China accept before a backlash.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Until then</strong> Xi is reshaping China perhaps in ways that Mao not Deng.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">4. European Business in China – Position Paper 2020/2021</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Each year, </strong>the EU Position Paper is one of the most important publications on the foreign business in and the economy of China.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">What makes it so important </strong>is that the Paper pulls no punches - it's an honest review of the situation.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">That is the style</strong> of the Chamber's president, Joerg Wuttke, who in more than 30 years in China has told truth to power on both sides.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">His hand</strong> is evident - and very welcome..</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Virtually every page</strong> of the Paper is valuable; included below is just a snippet.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">I encourage you</strong> to read the entire report.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">5. Where Trump and Biden Stand on China</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">For some time</strong> I’ve had an eye out for an unbiased and comprehensive assessment of where China policy could go after the U.S. presidential elections – and I found it.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Bottom line:</strong> ‘The hard-line on Beijing likely to continue regardless of U.S. election outcome.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Let me know what you think. </strong>And please forward the <strong style="font-weight: bold">China Macro Reporter</strong> to your friends and colleagues.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">All the best,</strong></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Malcolm</strong>&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">1. China Tech Bans as Geopolitical Tools</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/7IBWYi?track_p_id=5PwIHe81BMa6_23beadbr3S" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/DKFLL_WFNIxtoniJ10LrLki__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7IBWYi?track_p_id=2eX81BMa6_HG2lFwWS4ByPc" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">The Summer of the Ban</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/7IBWYi?track_p_id=5WozNW81BMa6_gyUweHQ3bG"><img width="100%" src="https://img.scoop.it/XnyfjzzctUYagVnk8-H2nTl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Council on Foreign Affairs</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Connor Fairman</strong> | Council of Foreign Relations</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘Now that India, the European Union, and the United States seem to have settled on banning Chinese tech products, other countries with active disputes against China could see that as their cue to follow suit at the next opportunity.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Chinese technology companies</strong> will remember summer 2020 for their products being banned from some of the largest markets in the world.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘After the Trump administration</strong> announced new restrictions against companies selling products made with U.S. technology to Huawei in May, the telecommunications giant was effectively banned from India and the European Union.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The United States and India</strong> both announced bans against TikTok and WeChat, and in early September, Delhi announced that it was banning an additional 118 Chinese apps, bringing the total number of Chinese apps banned by India this summer to 177.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The decisions to ban</strong> various Chinese tech products this summer were broadly justified as efforts to protect national security.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘These threats have existed for a while,</strong> however, and the more immediate causes are geopolitical incidents involving China.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Beijing’s crackdown on Hong Kong,</strong> initial mishandling of the COVID-19 pandemic, and border conflict with India have all helped trigger the wave of bans.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘They have also contributed</strong> to a rise in&nbsp;<a href="https://carnegieendowment.org/2020/06/10/how-world-is-responding-to-changing-china-pub-82039" rel="nofollow">anti-China sentiment&nbsp;</a>in the countries where these bans took place, leading an internal report by China’s Ministry of State Security to&nbsp;<a href="https://www.reuters.com/article/us-health-coronavirus-china-sentiment-ex/exclusive-internal-chinese-report-warns-beijing-faces-tiananmen-like-global-backlash-over-virus-idUSKBN22G19C" rel="nofollow">conclude</a>&nbsp;that “global anti-China sentiment is at its highest since the 1989 Tiananmen Square crackdown.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Against this geopolitical backdrop,</strong> banning Chinese tech products is an attractive tool for many policymakers because it allows them to push back against China without risking military escalation.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In India’s case,</strong> banning Chinese telecoms and apps appeases domestic calls for a&nbsp;<a href="https://www.news18.com/news/buzz/boycott-tiktok-make-china-pay-indians-seek-revenge-from-china-for-introducing-covid-19-2566509.html" rel="nofollow">boycott&nbsp;</a>of Chinese goods and&nbsp;<a href="https://www.express.co.uk/news/world/1298366/india-v-china-revenge-border-clashes-galwan-valley-narendra-modi-world-war-3-latest" rel="nofollow">retribution</a>&nbsp;for Indian troops killed near the disputed China-India border.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘India</strong> is well-positioned to use bans.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Its smartphone market</strong> is the&nbsp;second-largest&nbsp;in the world, behind China, and, prior to the COVID-19 pandemic, was expected to continue growing at an annual rate of over&nbsp;<a href="https://www.businesswire.com/news/home/20190426005357/en/The-Smartphone-Market-in-India-2018-to-2023---With-a-14-Yearly-Market-Growth-Since-2016-India-is-the-Fastest-Growing-Smartphone-Market-Globally---ResearchAndMarkets.com" rel="nofollow">14 percent</a>&nbsp;over the next three years.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Exclusion from India</strong> represents enormous losses in revenue for Chinese companies, and new space for Indian companies to replace them.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Leaders from smaller</strong> but still dynamic markets, though, could be tempted to follow India’s example, banning Chinese tech companies’ products when military or diplomatic options are unattractive or unavailable.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">'The U.S. Department of State’s </strong><a href="https://www.state.gov/the-clean-network/" target="_blank" title="Clean Network program"><strong style="font-weight: bold">Clean Network program</strong></a><strong style="font-weight: bold"></strong>announced in August might also provide an incentive for some countries to ban Chinese tech products in the future.'&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'At its unveiling, </strong>the program announced a list of over thirty “<a href="https://dk.usembassy.gov/the-clean-network-safeguards-americas-assets/" target="_blank" title="clean countries">clean countries</a>” that had committed to excluding China from their 5G networks.'&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">'For countries </strong>that consider banning Chinese technology, the program, and the growing list of countries that have signed on to it, could provide diplomatic coverage and support.'&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'In particular, </strong>the Clean Store line of effort, which calls for the removal of Chinese apps from mobile app stores, could be an easy pathway for countries to punish Chinese behavior, due to the relative ease of banning apps, compared to scrutinizing undersea cables, cloud service providers, and telecommunications networks.'</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Chinese tech companies</strong> have much to worry about.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘With Huawei’s global aspirations</strong> effectively&nbsp;<a href="https://www.cfr.org/blog/closing-book-huaweis-global-aspirations" rel="nofollow">shattered&nbsp;</a>by the U.S. Department of Commerce’s newest restrictions in August and several other Chinese companies falling victim to geopolitical tensions, they should be wary of their positions in countries that have strained relations with Beijing.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Now that India, the European Union, and the United States</strong> seem to have settled on banning Chinese tech products, other countries with active disputes against China could see that as their cue to follow suit at the next opportunity.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">5  Oracle and Walmart's TikTok Deal</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/7aLqsq?track_p_id=5QILS15KHE6A_1vL63JKGBB" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/6VmjGi-OzR9hHtsqke2CyEi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7aLqsq?track_p_id=bEVCQ5an5FLZ5KHE6A_wIx2" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">5 Things to Know About Oracle and Walmart's TikTok Deal</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The Motley Fool</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘The TikTok story isn't over yet, and there could still be plenty of twists ahead.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">‘The key takeaways’</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The TikTok story isn't over yet,</strong> and there could still be plenty of twists ahead, with unresolved arguments about its ownership stakes, use of tax proceeds, and the new AI export rules in China.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">‘1. The formation of TikTok Global’</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In a joint statement, </strong>Oracle and&nbsp;Walmart announced the creation of a new company, TikTok Global, an independent company headquartered in the U.S. Its five-person board would have four Americans.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Oracle and Walmart</strong> will own 20% of TikTok Global, with respective stakes of 12.5% and 7.5%, and the data of TikTok's U.S. users will be stored in Oracle's cloud servers.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The two companies</strong> also announced that TikTok Global will be spun off in&nbsp;<a href="https://www.fool.com/investing/stock-market/types-of-stocks/ipo-stocks/" rel="nofollow">an IPO&nbsp;</a>in less than 12 months.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘As a stand-alone company,</strong> TikTok Global could be valued at up to $60 billion. By comparison, ByteDance was&nbsp;valued at $110 billion after its last funding round.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Oracle and Walmart claim</strong> TikTok Global will be entirely owned by American investors, and ByteDance will no longer own a stake.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But in a separate announcement in Chinese,</strong> ByteDance claimed it will retain an 80% stake until the IPO -- implying that Oracle, Walmart, and other American investors might need to pay a hefty post-IPO premium to buy out its stake.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">‘4. China hasn't approved the deal’</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Chinese regulators</strong> also haven't approved the deal yet. ‘</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Last month,</strong> China unveiled new restrictions that bar the export of technologies that use AI services like text analysis, content suggestions, and voice recognition. This could trip up a sale of TikTok's overseas app.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘If push comes to shove,</strong> the Chinese government could threaten to shut down ByteDance's core&nbsp;<a href="https://www.fool.com/investing/2019/11/25/bytedance-surpasses-baidu-and-tencent-in-digital-a.aspx" rel="nofollow">Chinese business</a>&nbsp;to halt the deal.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘If forced to choose</strong> between its home market and a messy deal with American investors, ByteDance might abandon its overseas ambitions altogether -- and leave a huge hole in the short video market for hopeful challengers like&nbsp;<strong style="font-weight: bold">Facebook</strong>'s&nbsp;<a href="https://www.fool.com/investing/2020/07/21/facebook-chases-tiktok-again-with-a-new-instagram.aspx" rel="nofollow">Instagram Reels</a>.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">‘5. U.S. courts could still step in’</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘President Trump</strong> ordered bans on both TikTok and&nbsp;<a href="https://www.fool.com/investing/2020/08/13/4-reasons-tencent-not-worry-about-trump-wechat-ban/" rel="nofollow"><strong style="font-weight: bold">Tencent</strong>'s WeChat</a>, but a federal judge in California recently halted WeChat's removal from U.S. app stores with an injunction, citing concerns regarding the harm done to the app's Chinese users within the United States.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘That 11th-hour decision</strong> indicates U.S. courts could still save TikTok from being banned, even if the deal with Oracle and Walmart collapses.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/7sWBCy?track_p_id=bOI124VmVYMc7SYIiE_vUPm" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/Q7K3LvBpUHwYzkoXdXm2WUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7sWBCy?track_p_id=aW5eGEjc1Ha7SYIiE_%40pvQI" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Trump’s TikTok Oracle Drama Was Just Another Empty Threat&nbsp;</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Bloomberg</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘The unusual deal was there for the taking all along and doesn’t truly change much.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The TikTok saga</strong> is finally drawing to a messy conclusion, and it appears President Donald Trump may be content to backpedal and take a deal that is similar to something that was there all along.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But this&nbsp;plan is a far cry</strong> from what the White House had&nbsp;been demanding&nbsp;for months.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Assuming this latest iteration</strong> of the deal stands, does it&nbsp;truly change anything? Somewhat.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘From the beginning,</strong> the White House had three basic goals: Total American ownership of the U.S.-based TikTok; protections against the TikTok algorithm potentially&nbsp;spreading disinformation; and data security.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Obviously,</strong> Oracle’s and Walmart’s&nbsp;partial stake deal&nbsp;and ByteDance’s retention of its algorithm mean&nbsp;the first two requirements aren’t fully met.’&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And while having Oracle</strong> act as the official data guardian may appear&nbsp;reassuring from a security standpoint, the situation won’t be drastically different from the current state of affairs.’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘TikTok</strong> has always said American data is kept securely in the U.S. with backups in Singapore.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘So replacing</strong> other American cloud-computing providers with Oracle won’t be a big change.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Further,</strong> while Oracle will reportedly be able to monitor any changes in the software code, the technical challenge to make sure all modifications aren’t problematic&nbsp;is enormous.’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Trump’s willingness</strong> to accept a water-downed deal indicates&nbsp;how this saga was as much about&nbsp;scoring political points than truly caring about TikTok’s national security risks.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Oracle’s proposal</strong> is similar to what ByteDance was&nbsp;<a href="https://www.wsj.com/articles/tiktok-considers-changes-to-distance-app-from-chinese-roots-11594300718?mod=searchresults&amp;page=1&amp;pos=8" rel="nofollow">willing to do months ago</a>— from the creation of an autonomous TikTok management structure to the designation of a new headquarters outside of China.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Plus, the company</strong> had already vowed it would add 10,000 jobs in the U.S.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘But the political calculus</strong> for Trump is complicated.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘If he does follow through</strong> on a TikTok ban, it would risk annoying tens of millions of Americans who enjoy using the short-video app right before the presidential election.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Moreover,</strong> a ban might spur China to retaliate against U.S. businesses within its borders, which could hurt the U.S. stock market. That’s a&nbsp;scenario he wants to avoid.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Overhanging </strong>everything is some political uncertainty.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The Chinese government</strong> still needs to fully sign off on the deal, which is not guaranteed.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Beijing could still find the terms are too onerous,</strong> it could become another trade war bargaining chip, or it may use an approval period to delay a&nbsp;decision.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Then it will be up to Trump&nbsp;</strong>to decide again whether he wants to follow through on his threat to ban the app.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">3. Xi's Latest Top to Bottom Control Efforts</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/8HLFwW?track_p_id=ajFwaQayI5U8g7Awo_xABo2" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/3QKIJ28TXRxlm_PNLipujEi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/8HLFwW?track_p_id=eFvCsl3GzhxAOsq8g7Awo_c" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">China Sentences Ren Zhiqiang, Xi Critic, to 18 Years in Prison&nbsp;</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/8HLFwW?track_p_id=egaGolhID%40fBPuV8g7Awo_p"><img width="100%" src="https://img.scoop.it/oW-AULiKpxukZ-SqXwhmgDl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The New York Times</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Chris Buckley </strong>| The New York Times</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">“Cracking down on Ren Zhiqiang, using economic crimes to punish him, is a warning to others — killing one to warn a hundred.”&nbsp;</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Ren Zhiqiang,</strong> the property tycoon nicknamed “Big Cannon,” was notorious for his blunt criticisms of the Communist Party, and yet his wealth and political connections long seemed to shield him from severe punishment.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Until now.’</strong></li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘A court in Beijing</strong> sentenced Mr. Ren to 18 years in prison on Tuesday.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The court said</strong> he was guilty of graft, taking bribes, misusing public funds and abusing his power during and after his time as an executive at a property development company.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Mr. Ren’s supporters and sympathizers</strong> said that his real crime was criticizing the Communist Party and calling the country’s hard-line leader, Xi Jinping, a “clown.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Mr. Ren’s punishment</strong> has underlined how far Mr. Xi has rolled back allowances for dissent, even from members of the elite like Mr. Ren, a scion of a Communist family and former friend of senior officials.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘His supporters</strong> also see the long prison term as a warning to others, especially elites, who may be thinking about openly challenging the party and Mr. Xi.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘ “Cracking down on Ren Zhiqiang,</strong> using economic crimes to punish him, is a warning to others — killing one to warn a hundred,” said Cai Xia, an acquaintance of Mr. Ren’s who formerly taught at the Central Party School, which trains rising officials.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “It’s a warning</strong> to the whole party and especially to red offspring,” Ms. Cai said, referring to the children of party officials.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/8ZVaGe?track_p_id=07zRqSU_aYaZXk5Vz3maOy3" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/3QKIJ28TXRxlm_PNLipujEi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/8ZVaGe?track_p_id=9VwVYnESMo7zRqSU_cbBtnO" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Chinese Communist Party Seeks Sway Over Private Business&nbsp;</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The New York Times</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Chris Buckley&nbsp;and&nbsp;Keith Bradsher</strong> | The New York Times</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">“Unify members of the private sector around the party, and do better in promoting the healthy development of the private economy.” </strong></em><em style="font-style: italic">Xi Jinping</em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Mao Zedong</strong> vowed to abolish China’s capitalists.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Deng Xiaoping</strong> said they could get rich.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Now Xi Jinping,</strong> China’s current leader, has his own message for the country’s private businesses that reflects a drive for both economic growth and greater Communist Party control:’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘We’re here to help you,</strong> but you must also help and heed us.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The party </strong><a href="http://cpc.people.com.cn/n1/2020/0916/c64036-31862864.html" rel="nofollow"><strong style="font-weight: bold">laid the groundwork</strong></a>&nbsp;this week for greater party influence over private business, while also promising them&nbsp;<a href="http://www.xinhuanet.com/english/2020-09/16/c_139373545.htm" rel="nofollow">more support</a>&nbsp;and opportunities to convey their needs.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Though lacking many specifics,</strong> the guidelines underscored the competing economic and political undercurrents bearing on Mr. Xi’s government.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China needs to shore up growth,</strong> especially after a hit from the coronavirus epidemic.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘At the same time,</strong> Xi sees smaller private firms as a weak spot in his efforts to secure Communist Party dominance across society.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘ “Unify members of the private sector</strong> around the party, and do better in promoting the healthy development of the private economy,” Mr. Xi said in&nbsp;<a href="http://cpc.people.com.cn/n1/2020/0917/c64036-31864383.html" rel="nofollow">orders to officials</a>&nbsp;published Thursday by People’s Daily, the party’s main newspaper.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘More broadly,</strong> the instructions reflect a long-running debate within China about the role of private business in a country where the government still controls crucial levers of industry.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Private business’ freewheeling approach</strong> has long unnerved some Chinese leaders who want businesses to hew more closely to the party’s strategic goals, which can range from strengthening sway abroad to lifting people out of poverty in underdeveloped parts of the country.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Officials</strong> must establish additional channels for business owners to share their needs and grievances.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Above all,</strong> the new directive admonishes officials to accept the private sector as a vital part of China’s economy.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “Fully grasp</strong> that the existence and development of the private sector is long term and inevitable,” it says.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘At the same time,</strong> the new directives call for ensuring that China’s rising capitalists are recruited into the party’s “united front” of allies, ready to support the government’s economic and political priorities.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Businesses </strong>must build up party organizations, the guidelines said, implying that internal Communist Party committees will be more active in companies.’ (More than 90 per cent of private enterprises had established party cells by the end of 2018.)</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Entrepreneurs </strong>should receive instruction to ensure they “identify politically, intellectually and emotionally” with the party, the guidelines said.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘ “This united front work</strong> has been happening all along, and so this wasn’t out of the blue, but this time it’s clearer and more systematic,” he said.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">4. European Business in China – Position Paper 2020/2021</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/8AgVX6?track_p_id=85V6LrjKh5QvyVa_QopAvFF" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/UhpUPMCJFye7fkL4IvWfEki__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/8AgVX6?track_p_id=1b5QvyVa_hEOq514zLf%40z3g" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">European Business in China – Position Paper 2020/2021</a></td></tr></tbody></table></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/KsbWOp-bg2alxXUrqzp11zl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="text-align: right;display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">&nbsp;Joerg Wuttke, </strong>president, EU Chamber of Commerce in China</h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><br></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">European Union Chamber of Commerce in China</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘European business sees China moving in multiple directions at the same time.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Each year, </strong>the EU Position Paper is one of the most important publications on the foreign business in and the economy of China.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">What makes it so important </strong>is that the Paper pulls no punches - it's an honest review of the situation.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">That is the style</strong> of the Chamber's president, Joerg Wuttke, who in more than 30 years in China has told truth to power on both sides.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">His hand</strong> is evident - and very welcome..</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Virtually every page</strong> of the Paper is valuable; included here is just a snippet.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">I encourage you</strong> to read the <a href="https://www.europeanchamber.com.cn/en/publications-position-paper" target="_blank">entire report here.</a></li></ul><p style="text-align: center;display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">___________________________________________</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><br></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘For much of the last four decades,</strong> European business has been confident that China’s leaders were leaning heavily towards continued opening-up after having emerged from an era of seclusion.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Unfortunately,</strong> the last several years have challenged this confidence.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘European business</strong> sees China moving in multiple directions at the same time.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘For example,</strong> a ‘one economy, two systems’ model has emerged.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘One</strong><strong style="font-weight: bold">half of China’s economy</strong> continues to open, is increasingly fair and well regulated, and very much wants European investment.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘For instance,</strong> while late in the game, the lifting of equity caps in the automotive sector has led to meaningful opportunities for European manufacturers and their suppliers, several of which have either increased their shareholdings or are aiming to take full control of their long-held joint ventures.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘However,</strong> this more market-driven half of the economy also includes saturated sectors that China seems to have finally unlocked purely to perpetuate its now familiar narrative that it will open its doors wider and wider to foreign investors.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The lifting of equity caps</strong> for foreign investment in the financial services sectors serves as a key example in this respect.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China’s closed-off banking sector</strong> allowed domestic financiers to fully saturate the entire market without the challenge of outside competition.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The eventual removal of the direct barriers</strong> to foreign banks was then hailed in Chinese state media as a monumental step towards China opening its economy.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘However,</strong> the fact that the reform took place so late in the game made it more akin to letting foreign investors onto a railway platform only after the train had long since departed.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In a market already dominated by state-run banks</strong>—four of which are the largest in the world—only a few remaining niches, like cross-border services, still have space for European banks.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘After entering those niches,</strong> European banks are then confronted by secondary barriers, like restricted access to licences and complex administrative approvals, meaning that most cannot even catch the crumbs from the table.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘European bankers</strong> project that the already pitiful foreign share of less than two per cent of the market will shrink.'&nbsp;</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'Meanwhile,</strong> Chinese banks are feasting on Europe’s open banking ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The other, state-driven half of the economy</strong> sees China still nursing its national champions and state- owned enterprises (SOEs) that have largely uncontested access to a fifth of the world's consumers, producers, depositors and innovators.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China's leaders</strong> reaffirmed its plan to enhance the role of its SOEs as recently as July 2020.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China currently</strong> has 97 behemoths run at the central level by the State-owned Assets Supervision and Administration Commission (SASAC), and another 130,000 SOEs run at the provincial and local levels.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The enduring and growing challenges</strong> facing European companies in this half of the economy are depleting business sentiment.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Meanwhile,</strong> as China’s indigenous companies catch up to and even surpass European firms in some areas, many European business leaders are starting to wonder if Jeffrey Immhelt, former CEO of General Electric, was right a decade ago when he said,’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">“I am not sure</strong> that in the end [China] wants any of us to win, or any of us to be successful.”</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">5. Where Trump and Biden Stand on China</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/86kYYRjJ0gGTOXi68X7jpDl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/8rfuam?track_p_id=26e8Cg7Li_OtDMkO3eI5i2T" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/8rfuam?track_p_id=7V51s3nm8Cg7Li_Vgye3xd3" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Part 1 | Overview</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The Wall Street Journal</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘Hard line on Beijing likely to continue regardless of U.S. election outcome.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The hard line the U.S.</strong> has taken on China in recent years is likely to continue no matter whether President Trump or Democratic challenger Joe Biden wins the presidential election.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Mr. Trump</strong> has charted a more confrontational China policy than his Republican and Democratic predecessors pursued in the four decades since Washington and Beijing set up full diplomatic relations.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘What began as a fight over trade </strong>has evolved into&nbsp;<a href="https://www.wsj.com/articles/coronavirus-casts-deep-chill-over-u-s-china-relations-11588781420" rel="nofollow">a multi-front assault&nbsp;</a>with the U.S. targeting China’s tech companies, its alleged theft of research and intellectual property and its officials involved in jailing Muslim ethnic groups and thwarting democracy in Hong Kong.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Advisers to Mr. Biden</strong> say they share the Trump administration’s assessment of China as an authoritarian rival intent on disrupting the American-led global order.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Both Mr. Trump and Mr. Biden</strong> have in the past publicly boasted of having a personal connection with President Xi Jinping.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And both</strong> now say their views on China have soured.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Each campaign</strong> has produced video ads accusing the opposing candidate of being weak-kneed on China.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘A Biden administration&nbsp;</strong><a href="https://www.wsj.com/articles/whats-bidens-china-policy-it-looks-a-lot-like-trumps-11599759286" rel="nofollow">is likely to maintain efforts</a>&nbsp;started by Mr. Trump to reduce American dependence on Chinese manufacture of critical goods and to compete with China in strategic sectors such as artificial intelligence and next-generation 5G wireless networks.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘A core part of Mr. Trump’s trade war with China</strong>—tariffs that cover roughly three-quarters of everything China sells to the U.S.—is likely to remain, at least in the early part of a Biden administration.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Unlike Mr. Trump,</strong> Mr. Biden is committed to diplomacy, in keeping with his decades helping to mold the global order Mr. Trump often criticizes.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Mr. Biden aims</strong> to work closely with allies, mobilizing them to counter Beijing’s expanding global influence.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘He also says</strong> he will work with China to address global issues like&nbsp;<a href="https://www.wsj.com/articles/coronavirus-latest-news-09-21-2020-11600676779" rel="nofollow">the coronavirus pandemic</a>&nbsp;and climate change.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘That emphasis</strong> marks an essential distinction between Mr. Biden’s and Mr. Trump’s approaches to China.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “The analysis—and some pushback measures</strong>—would be the same,” said Winston Lord, a former ambassador to China under President Reagan and assistant secretary of state under President Clinton.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The focus on allies,</strong> promoting democracy and competing with China in other ways, said Mr. Lord, means Biden “policies would not look a lot like Trump’s.” ’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/8ITeSm?track_p_id=d2g%401zUdzF4HMR8CxiTm_Y6" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/8ITeSm?track_p_id=eTmtGkQd%40Js33Cd8CxiTm_t" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Part 2 | Economic Challenge</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The Wall Street Journal</strong></h3><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Mr. Trump and Mr. Biden</strong> both say they want to build up American manufacturing and lessen what they see as U.S. reliance on China, especially in sectors deemed vital to national security and competitiveness.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘A brief second-term agenda</strong> released by the Trump campaign promises to lure 1 million manufacturing jobs from China to the U.S. by offering tax credits to American companies.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘More generous terms</strong> are proposed for businesses in sectors like pharmaceuticals and robotics—areas also favored in Biden campaign proposals.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Mr. Trump</strong> has suggested that his first-term agenda is a prelude to a “decoupling” from China, meaning a thorough separation of the two economies.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Biden aides,</strong> on the other hand, say a broader rupture makes no sense beyond key sectors.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Biden platform</strong> often invokes the challenge of China as a spur to bolstering the American economy by ramping up spending on infrastructure, clean energy, worker training and research and development.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘On trade,</strong> Mr. Biden has said he won’t join trade agreements without first helping American workers.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘That is likely to include the Trans-Pacific Partnership, </strong>which the Obama administration negotiated and Mr. Trump rejected, at least early in a Biden administration.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘A second Trump term,</strong> meanwhile, could see the president pursue a follow-up agreement to&nbsp;<a href="https://www.wsj.com/articles/u-s-china-to-sign-deal-easing-trade-tensions-11579087018" rel="nofollow">the Phase One trade deal</a>&nbsp;concluded in January.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘That deal centered</strong> on Chinese pledges to increase purchases of U.S. goods and services.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Left out were thornier issues</strong> the Trump administration originally wanted Beijing to address, including subsidies for state-owned companies and data security.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/6QsVk0?track_p_id=crMHEJmBJrWvI8q7XHa_eRI" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6QsVk0?track_p_id=2pZ8q7XHa_vwrrepBp%40YfV6" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Part 3 | Technology Tussle</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The Wall Street Journal</strong></h3><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Technology </strong>will remain a point of friction and competition no matter the president.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘A signal Trump administration</strong> effort has been to brand Chinese technology companies as threats to national security, accusing them of working with or being beholden to China’s ruling Communist Party.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘A threatened ban</strong> on the Chinese short-video app TikTok forced its parent company to&nbsp;<a href="https://www.wsj.com/articles/tiktok-deal-faces-questions-over-security-ownership-11600625447" rel="nofollow">change its structure&nbsp;</a>to continue to operate in the U.S. Huawei Technologies, the world’s largest telecommunications gear maker and a leader in 5G, has been effectively barred from much of the U.S. market and blacklisted from receiving U.S. technology.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The Trump administration&nbsp;</strong><a href="https://www.wsj.com/articles/u-k-makes-u-turn-on-huawei-after-u-s-pressure-11594727179" rel="nofollow">has lobbied allied countries</a>&nbsp;to uproot Huawei gear from their networks.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘A “clean network”</strong> initiative expected to get a boost in a second Trump term&nbsp;<a href="https://www.wsj.com/articles/in-a-u-s-china-tech-divorce-businesses-would-have-to-pick-sides-11597464037" rel="nofollow">seeks to exclude</a>&nbsp;a wider array of Chinese internet and telecoms firms from internet and communications infrastructure used by the U.S. and other countries.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Biden campaign platform </strong>also promises to maintain the U.S. lead in technology and to confront Beijing’s efforts to erode that edge, through cyberattacks, forced technology transfers and luring American-trained scientists to work in China.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Biden aides</strong> point to Beijing’s Made in China 2025—an ambitious program to develop technologies of the future like biomedicine and clean energy—as a rationale for the U.S. to guide government investment into fields and sectors seen as competitively key.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/5c4JSS?track_p_id=a3elUdsVkRf7LJWta_6PKiP" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/5c4JSS?track_p_id=4vZjC7LJWta_lXofR%40S12zc" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Part 4 | Global Rivalry</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The Wall Street Journal</strong></h3><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Trump administration</strong> identified China as a strategic competitor, and senior officials&nbsp;<a href="https://www.wsj.com/articles/secretary-of-state-pompeo-to-urge-chinese-people-to-change-the-communist-party-11595517729" rel="nofollow">have publicly criticized</a>&nbsp;what they see as Beijing’s malign intentions in world affairs, from cyber espionage to checkbook diplomacy. Mr. Trump has called out China for unleashing the coronavirus pandemic.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Trump administration</strong> has stepped up U.S. military activities in the South China Sea, challenging China’s building of artificial islands and effort to strengthen control over the strategic waters.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Allies Japan and Australia</strong> have been enlisted, and with them, the Trump administration has pushed for what it calls an Indo-Pacific region free of Chinese aggression.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Biden advisers</strong> say that Mr. Trump has undermined this by quarreling with allies over trade and military spending.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘They point</strong> to the Trump administration’s withdrawal from international organizations like the World Health Organization and a multinational pact on Iran’s nuclear program as weakening U.S. leadership.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘A Biden presidency</strong> would seek to rejoin many of these arrangements.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Mr. Biden promises</strong> to place greater emphasis on promoting democracy and human rights in dealing with China.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘At times,</strong> Trump, as he sought to strike a trade deal, appeared to hold off criticizing Beijing over its crackdown on democratic advocacy in Hong Kong and its mass detention of ethnic Uighurs in Xinjiang.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In recent months,</strong> the administration&nbsp;<a href="https://www.wsj.com/articles/trump-administration-discussing-travel-ban-on-china-s-communist-party-members-11594914737" rel="nofollow">has moved to penalize Beijing</a>, placing sanctions on officials enforcing policies in those regions.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div></td></tr></tbody></table>

<table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#f5f5f5;"><tr><td><div><table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#FFFFFF;"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="padding:3.5%; text-align:left; font-weight:700; font-style: normal; font-variant: normal; line-height: 20px;"><span style="font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 17px; color: #c80000;">CHINA</span><span style="font-family: 'Merriweather', serif; font-size: 15.5px; color: #001544;">Debate</span></td><td style="padding:3.5%; text-align:right; font-weight:normal; font-size: 14px; font-style: normal; color: #001544; font-family: 'Lato'"></td></tr></tbody></table></td></tr><tr><td style="padding:3.5%; text-align:center;"><a style="border-bottom: none;text-decoration: none;color: inherit;" href="http://sco.lt/9HVx32?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" target="_blank"><img style="width:70px; border-radius:3%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);" src="https://cdn.prod.website-files.com/5a3e922cf6b9a40001bc2d6b/5e3dbbf161e6c357b022bea5_China%20Macro%20Reporter%20.png" alt="China_Macro_Reporter"></a></td></tr><tr><td style="text-align:center; font-size: 27px; font-family: sans-serif; color:#001544; font-weight:bold; line-height: 2rem;">China Macro Reporter</td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:40px; padding-top:10px; font-size: 13px; color:#001544; font-family:'Lato', sans-serif;">By Malcolm Riddell<span style="margin:0 6px">·</span>2020</td></tr><tr><td style="text-align:center; line-height:1.5; display:block; max-width:480px; margin:0 auto; padding:10px 0; font-size: 18px; font-family: 'Noto Serif'; color:#c80000; font-weight:normal; letter-spacing: -0.5px; border-bottom:2px solid #c80000;">Opening Statement</td></tr></tbody></table></td></tr></tbody></table></div></td></tr></table><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/6vrJYW?track_p_id=8ztHD3fS66TMyAI_hRNAl3a&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/4x73lYAycA6tlG4fEtV_j0i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6vrJYW?track_p_id=a5Q3g3hj1v36TMyAI_5ptFc&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">The 'Dual Circulation' Strategy: Cornerstone of China's Economic Policy for Years to Come</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h1 style="display: inline-block;margin-block-start: 2rem;!important: ;margin-block-end: 0.5rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 26px;line-height: 36px;font-weight: 400;letter-spacing: 0.1px;font-family: 'Lato';color: #001544;"><strong style="font-weight: bold">Greetings!&nbsp;</strong></h1><p></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘If China’s “dual circulation” strategy” (DCS)</strong> begins to bear fruit, the impacts on the global economy would be momentous,’ warn Jude Blanchette and Andrew Polk.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">The “dual circulation”</strong> what?</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">As names </strong>for major economic initiatives go, ‘dual circulation’ is not an eye-catcher.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">I now realize</strong> that because of that, I hadn’t paid much attention. My bad.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Then analysts</strong> I respect – like Jude and Andrew - began writing about it, and I quickly understood its importance and potential impact on international trade and economics.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'The fact that this strategy</strong> is being discussed at such high levels in the lead-up to the expected October release of China’s 14th five-year plan suggests it will be a cornerstone of economic policy for years to come,' writes Stephan Olson.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Because of its potential impact,</strong> today's issue is devoted to giving you a better understanding of China’s ‘dual circulation’ strategy.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Here are</strong> a few points to get you started.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">1. The Strategy</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The “dual circulation” strategy (DCS)</strong> envisions a new balance away from global integration (the first circulation) and toward increased domestic reliance (the second circulation),’ write Jude Blanchette and Andrew Polk.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Pretty vague,</strong> right?</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Ever since May,</strong> when President Xi Jinping first introduced the concept of a “dual circulation” economic model, analysts who follow the Chinese economy have been struggling to understand exactly what the Chinese leadership has committed to,’ writes Michael Pettis.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">The Chinese </strong>find it no less vague.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Still in China</strong> its dimensions are being discussed and argued about among top economists and among top officials.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">2. The Motivation</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Xi Jinping is preparing his country&nbsp;</strong>for an external environment that is expected to harden both politically and economically in the coming years,’ writes Yukon Huang.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Internationally,</strong> Xi confronts a trade war with the United States, a political push to uproot manufacturing supply chains and decouple from China, and a bleak overall outlook for global trade due to the coronavirus pandemic.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">3. The Meaning</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Fundamentally,</strong> efforts along these lines, and under the guise of the DCS, should be seen as part of China’s plan to push forward decoupling on its own terms,’ write Blanchette and Polk.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘This further</strong> demonstrates that Chinese leaders are clear-eyed that bifurcation is not a question of if, but of when and how fast.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The DCS</strong> was born out of a reaction to this diagnosis, and it is meant to posit a proactive strategy for China to shape the parameters of the divorce, not to shy away from it.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">This brings up</strong> an especially interesting point for those of us outside China.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Western China watchers</strong> scour the news for the latest U.S. moves against China.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">We ask questions like:</strong> ‘How much does the U.S. intend to decouple?’ or ‘What industries will the U.S. target for decoupling?’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">We seem to implicitly assume </strong>that Xi Jinping, like us, is sitting in Beijing watching and waiting to learn China’s fate.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Xi’s ‘dual circulation’ strategy</strong> shows us just how wrong we are.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><br></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">In today’s issue </strong>– all about China’s ‘dual circulation’ strategy:</p><ol style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Dual Circulation and China’s New Hedged Integration Strategy’</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Dual circulation: How China is preparing for a new role in international trade’&nbsp;</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Why Trade Will Continue to Power China, Even as it Tries to Look Inward’</strong></li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The Problems with China’s “Dual Circulation” Economic Model’&nbsp;</strong></li></ol><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><strong style="font-weight: bold">Go deeper into these issues - Browse the posts below.</strong></h2><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><strong style="font-weight: bold">To read the original article, click the title.</strong></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Let me know what you think. </strong>And please forward the <strong style="font-weight: bold">China Macro Reporter</strong> to your friends and colleagues.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">All the best,</strong></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Malcolm</strong></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">1. Dual Circulation and China&rsquo;s New Hedged Integration Strategy&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/6K2GTQ?track_p_id=6lmJnN27YrNOA_Xk4xkmofS&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/VcdAHHrWxK2Oai7z2r1MjUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6K2GTQ?track_p_id=9PbcLlnuAv7YrNOA_iMvcCC&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Part 1 | Dual Circulation: Decoupling on China's Terms</a></td></tr></tbody></table></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/4xl5KdN3AVwuBXId8TQXSjl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Center for Strategic and International Studies</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Jude Blanchette</strong> | Center for Strategic and International Studies</h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Andrew Polk</strong> | Trivium China &amp; Center for Strategic and International Studies<strong style="font-weight: bold">Center for Strategic and International Studies</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">'The fact that this strategy is being discussed at such high levels in the lead-up to the expected October release of China’s 14th five-year plan suggests it will be a cornerstone of economic policy for years to come.' </strong></em><a href="http://sco.lt/5YheXA?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><em style="font-style: italic"><strong style="font-weight: bold">Stephan Olson, Hinrich Foundation.</strong></em></a></h2><p></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Deng Xiaoping</strong>&nbsp;<a href="http://sco.lt/5qryrI?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">once described</a>&nbsp;the great advantage of the socialist system as “concentrating power to do big things.” ’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘From its expansive overseas investments</strong> into inland and sea infrastructure to its domestic drive for technological self-sufficiency, the Chinese Communist Party (CCP) under the rule of Xi Jinping has shown an impressive ability to leverage state and private resources to “do big things.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Strategic plans</strong> designed to help the country leap into the future now abound.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘This year alone</strong> will see the unveiling of the 14th Five-Year Plan,&nbsp;<a href="http://sco.lt/692JBQ?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">China Standards 2035</a>, and likely the next National Medium- to Long-Term Program for Science and Technology Development.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Existing domestic and international plans,</strong> from Made in China 2025 to the Digital Silk Road, continue to determine how and where resources are allocated into key technologies and key markets.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The “</strong><a href="http://sco.lt/6RCdVY?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">new national system</strong></a><strong style="font-weight: bold">”</strong> (新型举国体制) seeks to channel China’s technological development capabilities in order to boost its national power.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The latest, and perhaps most consequential, development</strong> in the Xi administration’s ongoing efforts to position China to withstand volatile geopolitical exigencies is the new “dual circulation” strategy (DCS), first announced at the&nbsp;<a href="http://sco.lt/6jMxpg?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">May Politburo meeting.</a>’</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/5jhbpA?track_p_id=du3ZFAgRVU3JVh5WXsVS_5a&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/VcdAHHrWxK2Oai7z2r1MjUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/5jhbpA?track_p_id=1Y5WXsVS_uTf2A3vwAJXuMH&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Dual Circulation and China&rsquo;s New Hedged Integration Strategy&nbsp;</a></td></tr></tbody></table></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/beG8mCoKePUqkh8-efMl5Tl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><p style="text-align: center;display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Jude Blanchette</strong></p></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/61rw9I?track_p_id=3pMW6fDztW_V5WZbcgRzbOe&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/VcdAHHrWxK2Oai7z2r1MjUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/61rw9I?track_p_id=1d6fDztW_MUSetduSn6X4jp&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Part 2 | Dual Circulation: China&rsquo;s New Hedged Integration Strategy&nbsp;</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Center for Strategic and International Studies</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Jude Blanchette</strong> | Center for Strategic and International Studies</h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Andrew Polk</strong> | Trivium China &amp; Center for Strategic and International Studies</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘At its core, dual circulation is a strategy to fortify China’s economic resilience in the face of global economic undulations and a general retreat from globalization among Western democracies.’</strong></em></h2><p></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;'<strong style="font-weight: bold">The high-profile nature</strong> of the DCS policy formulation, which at present is short on concrete details.'&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Here's</strong> what we know.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;<strong style="font-weight: bold">‘The “dual circulation” strategy (DCS)</strong> envisions a new balance away from global integration (the first circulation) and toward increased domestic reliance (the second circulation).’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘It stems from Beijing’s belief</strong> that China has entered a new paradigm that combines rising global uncertainty and an increasingly hostile external environment with new opportunities afforded by a floundering and listless United States, which China has long viewed as its most important geopolitical rival.'</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘This new worldview</strong> sees the continued decoupling of global supply chains as an enduring trend, and so Beijing now seeks to attempt a new “big thing”—balancing emphases on both internationalization&nbsp;<em style="font-style: italic">and self</em>-sufficiency (自力更生) that marks China’s own version of “hedged integration.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘This model entails</strong> engaging international capital, financial, and technological markets when advantages can be gained while simultaneously bolstering indigenous capabilities to avoid overreliance on the global economy—due to national security concerns or the vagaries of global economic cycles.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘At its core,</strong> dual circulation is a strategy to fortify China’s economic resilience in the face of global economic undulations and a general retreat from globalization among Western democracies.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘As such,</strong> Beijing sees the framework as a way to guard against economic exposures to the external economy (think semiconductors in the extreme, but at a more basic level, the current downturn in global demand, which is slowing China’s recovery).’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘As part of the effort</strong> to reduce external vulnerabilities, one key element of the DCS is to focus on both the strengths and weaknesses of the domestic economy—consolidating the former and addressing the latter in order to improve economic resiliency and self-sufficiency.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘That means</strong> further stoking demand from China’s domestic economy and gearing Chinese producers to meet that demand with expanded output for the domestic market rather than for export—all while finding ways to reduce reliance on external inputs in key areas, including energy, technology, and food.’</li></ul></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/6K2GTQ?track_p_id=1U7YrNOA_RBErFE2GaQEJBo&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/VcdAHHrWxK2Oai7z2r1MjUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6K2GTQ?track_p_id=4yXt57YrNOA_VUKVkOQfHt5&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Part 3 | Impact</a></td></tr></tbody></table></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/7z1MkPob0Ey2vWMFX4CKADl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" style="border-style: none;" alt=""></div></td><td width="0"></td></tr><tr height="0"><td width="0"></td></tr></tbody></table></div><div><p style="text-align: center;display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Andrew Polk</strong></p></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Center for Strategic and International Studies</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Jude Blanchette</strong> | Center for Strategic and International Studies</h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Andrew Polk</strong> | Trivium China &amp; Center for Strategic and International Studies</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘If the “dual circulation” strategy” (DCS)</strong></em><em style="font-style: italic"></em><em style="font-style: italic"><strong style="font-weight: bold">begins to bear fruit, the impacts on the global economy would be momentous.’</strong></em></h2><p></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘If the</strong><strong style="font-weight: bold">“dual circulation” strategy” (DCS)</strong> begins to bear fruit, the impacts on the global economy would be momentous.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Chinese policymakers</strong> and commentators have been clear that the DCS does not mean a full-scale pivot away from global economic integration or reliance on external demand.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But even a marginal shift</strong> by China away from its focus on mercantilist export practices could fundamentally reshape global trade and investment flows.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Perhaps more importantly,</strong> the argument that China should renew its focus on high-end manufacturing—rather than services and consumer sectors—may mean that China will seek to replicate the German manufacturing model.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘If successful,</strong> such a move would represent a major challenge to industrialized economies. China’s scale of production could begin to disrupt a range of new market segments—as has happened with solar and lithium&nbsp;batteries in the past.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Fundamentally,</strong> efforts along these lines, and under the guise of the DCS, should be seen as part of China’s plan to push forward decoupling on its own terms.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘This further</strong> demonstrates that Chinese leaders are clear-eyed that bifurcation is not a question of if, but of when and how fast.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The DCS</strong> was born out of a reaction to this diagnosis, and it is meant to posit a proactive strategy for China to shape the parameters of the divorce, not to shy away from it.’</p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">2. Dual Circulation: A New Way of Thinking about Globalization</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/6cCanY?track_p_id=bFK2Se%40GekNy6EpInW_PkX1&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/LVEdRSpgxX4CbqTrlPycNEi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6cCanY?track_p_id=cuv%40jnMLTbapo6EpInW_1dq&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Dual circulation: How China is preparing for a new role in international trade</a></td></tr></tbody></table></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/jSG9o2RypMLbQQW17CkLwzl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/6cCanY?track_p_id=94y2rLvSSB6EpInW_S5FuZC&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img width="100%" src="https://img.scoop.it/DyN_3clDNGuBCNT3nnGRgzl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">CNBC</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘A world divided into three parts — Europe, North America and Asia&nbsp;— which would interact with each other on a regional scale. China and its “internal circulation” stood at the center of Asia.’</strong></em></h2><p></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Economists at ICBC International,</strong> the Hong Kong-based subsidiary of the giant state-owned Chinese bank, have put out a series of notes in the last few weeks on “dual circulation.” ’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘One of the reports</strong> discussed the implications of the Chinese policy for the next round of globalization.'</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The authors</strong> uses two charts.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The first </strong>shows an international economy focused on the U.S. as a global demand hub.’&nbsp;</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The second</strong> paints a world divided into three parts — Europe, North America and Asia&nbsp;— which would interact with each other on a regional scale. China and its “internal circulation” stood at the center of Asia.’</li></ul></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">3. Why Trade Will Continue to Power China, Even as it Tries to Look Inward</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/6uMv7g?track_p_id=1a6o1YvW_oVrDS1B2K6wfO1&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/G9EK0hBp39apwSTnloaxVUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6uMv7g?track_p_id=ck1vuNuyj5Nzi6o1YvW_KnC&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Why Trade Will Continue to Power China, Even as it Tries to Look Inward</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/6uMv7g?track_p_id=7FgVu1AI6o1YvW_T2uaSKpH&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img width="100%" src="https://img.scoop.it/KKvUlCqfOswcFStUnpbLSDl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Carnegie Endowment</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Yukon Huang</strong> | Carnegie Endowment</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘Internationally, Xi confronts a trade war with the United States, a political push&nbsp;to uproot&nbsp;manufacturing supply chains and decouple from China, and a bleak overall outlook for global trade due to the coronavirus pandemic.</strong></em></h2><p></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Invoking Mao Zedong’s 1938 essay</strong> on “protracted war”, Chinese President Xi Jinping is&nbsp;<a href="http://sco.lt/71XI9o?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">preparing his country</a>&nbsp;for an external environment that is expected to harden both politically and economically in the coming years.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Internationally,</strong> Xi confronts a trade war with the United States, a political push&nbsp;<a href="http://sco.lt/7JhcTw?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">to uproot&nbsp;</a>manufacturing supply chains and decouple from China, and a bleak overall outlook for global trade due to the coronavirus pandemic.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Xi’s remedy,</strong> first introduced at a Chinese Communist Party Politburo meeting in May, lies in the new “<a href="http://sco.lt/7brwo4?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">dual circulation</a>” strategy.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Though the concept</strong> remains decidedly vague, it emphasises giving greater play to domestic growth drivers, or “internal circulation”, while shifting away from the economy’s traditional bent towards export orientation.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In this view,</strong> China should lean more heavily on&nbsp;<a href="http://sco.lt/7u2H8C?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">domestic demand</a>, given the diminishing role of trade in the economy over the past decade and a half.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Exports have been falling</strong> almost continuously as a share of China’s gross domestic product – from a peak of 35 per cent in 2006 to 17 per cent in 2019. This rise and fall is similarly true of imports.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The decline</strong> is the result of three structural forces that shaped China as it moved from a low- to upper-middle income economy: graduating from labour-intensive products; onshoring of higher value activities; and rebalancing from investment to consumption and from manufacturing to services.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Still, ‘exports</strong> still hold more potential for China than is widely believed, and general fears over trade&nbsp;<a href="http://sco.lt/8CCbSK?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">decoupling</a>&nbsp;and large-scale supply-chain restructuring are probably exaggerated:’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘foreign multinationals&nbsp;</strong><a href="http://sco.lt/8UMvmS?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">remain committed</a>&nbsp;to the Chinese market and'</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'China’s comprehensive manufacturing ecosystem</strong> cannot be easily replicated elsewhere.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Moreover,</strong> those now arguing for increasing consumption to drive China’s growth are mistaken.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The concept of consumption-driven growth</strong> doesn’t exist in economic theory.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Consumption </strong>is derived from growth; it does not drive growth.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The only true growth drivers</strong> are investment and productivity increases from technological innovation and deepening human capital.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And,</strong> as highlighted by the&nbsp;<a href="http://sco.lt/8mXG6a?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">World Bank Growth Commission</a>, a strong external orientation is a key characteristic of developing economies that have succeeded in this regard.’</li></ul></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">4. The Problems with China&rsquo;s &ldquo;Dual Circulation&rdquo; Economic Model&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/7CXFRo?track_p_id=bW5aHBIiy4u66NGaru_NWiT&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/zxbyrGBKPhFFZLzMYqfYnUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7CXFRo?track_p_id=5lYhQR6NGaru_HOLpyvWLol&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Part 1 | A New Strategy That Isn't</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/7CXFRo?track_p_id=06NGaru_R6zbjDtAIWNO63b&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img width="100%" src="https://img.scoop.it/NYKou_-KEf2RArYHRzXIFTl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Financial Times</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Michael Pettis</strong> | Peking University &amp; Carnegie-Tsinghua Center</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">'Beijing’s new economic strategy calls for the country to continue to expand domestic production for exports (“international circulation”) while shifting the economy towards a greater relative emphasis on production for domestic consumption (“internal circulation”).’</strong></em></h2><p></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Ever since May,</strong> when President Xi Jinping first introduced the concept of a “dual circulation” economic model, analysts who follow the Chinese economy have been struggling to understand exactly what the Chinese leadership has committed to.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘From the many subsequent formal references</strong> that have followed, it seems that Beijing’s new economic strategy calls for the country to continue to expand domestic production for exports (“international circulation”) while shifting the economy towards a greater relative emphasis on production for domestic consumption (“internal circulation”).’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In principle</strong> this makes sense.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Once it had closed</strong> the underlying gap between desired investment and actual investment — which it probably did in the early 2000s — China needed to base growth on domestic demand driven by rising wages, rather than depending on exports or on increasingly non-productive investment.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Because China</strong> has relied so much on the latter, its debt burden has soared to one of the highest in the world.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘But while “dual circulation”</strong> is presented as a new strategy, it really isn’t.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Beijing </strong>has been proposing something similar since at least 2007, when a speech by then-premier Wen Jiabao promised that Beijing would make it a priority to rebalance domestic demand towards consumption.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘This </strong>didn’t happen.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The consumption share</strong> of Chinese GDP remains extraordinarily low, just two percentage points higher in 2019 than it was in 2007.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Meanwhile,</strong> and not coincidentally, during this period China’s debt-to-GDP ratio doubled.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘It will get worse</strong> this year.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘With the sharp decline of consumption</strong> relative to GDP — partly because of Covid-19 and partly because of Beijing’s&nbsp;<a href="http://sco.lt/94haQi?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">production-focused&nbsp;</a>response to the pandemic — the consumption share of GDP will decline in 2020 to erase most of the gains it made since its low point a decade ago.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Meanwhile China’s debt-to-GDP ratio,</strong> which rose by six percentage points in 2019, will rise an astonishing 16-20 percentage points in 2020.'</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Little has changed since 2007,</strong> in other words, except for the country’s debt burden: demand in the Chinese economy is otherwise as unbalanced as ever.’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘This is clearly unsustainable</strong> and it is why it is so urgent for China to boost sustainable domestic demand.'</p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/7UhZlw?track_p_id=088GYog_SHwCUwJBQcF4gcc&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" target="_blank" title="SourceLogo" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/zxbyrGBKPhFFZLzMYqfYnUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7UhZlw?track_p_id=4kuOU88GYog_5DzP%40kWYwba&_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Part 2 | Two Problems</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Financial Times</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Michael Pettis</strong> | Peking University &amp; Carnegie-Tsinghua Center</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘For dual circulation to work, internal circulation can only come at the expense of international circulation, and as this happens, wealth – and with it power – must be shifted from today’s elites to ordinary Chinese households.’</strong></em></h2><p></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘There are two major problems</strong> that Beijing faces with dual circulation.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The first problem</strong> is that reorienting the economy toward domestic demand, whether you call it “rebalancing” or “dual circulation”, requires an economic, social and political transformation that is likely to be much greater than Beijing — and most Chinese and foreign economists, for that matter — seem to realise.’&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China’s low domestic consumption rates</strong> — among the lowest in history — is mainly the consequence of households retaining one of the lowest shares of GDP of any country in history.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘To rebalance demand</strong> towards consumption means nothing less than a major rebalancing of income towards ordinary households.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘For Chinese consumption</strong> to be broadly in line with that of other developing countries, ordinary households must recover at least 10-15 percentage points of GDP at the expense of businesses, the wealthy, or the government.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘This means rebalancing</strong> involves a massive shift of wealth — and with it, political power — to ordinary people. This will not be easy.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The second major problem </strong>is the internal contradiction at the heart of China’s new “dual circulation” model.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China’s export “competitiveness”,</strong> as former Alphaville writer Matt Klein and I explain in our&nbsp;<a href="http://sco.lt/9Mrukq?_tmc=HJrCkudREHROEyqaVoyx9xHK-qV3vf6EtcUsNTf8Xvk&track=1" rel="nofollow" style="color: inherit;text-decoration: none;border-bottom: 1px solid #008dc8;">recent book</a>,&nbsp;<em style="font-style: italic">Trade Wars are Class Wars</em>, depends on ensuring that workers are allocated, whether by wages or the social safety net, a very low share of what they produce.'</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China’s export strength,</strong> in other words, depends, at least in part, on the low share workers retain of what they produce.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Here’s</strong> the problem.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China can only rely on domestic consumption</strong> to drive a much greater share of growth if workers begin to receive a much higher share of what they produce, so the very process of rebalancing must undermine China’s export competitiveness.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘This means that for “internal circulation”</strong> to succeed, “international circulation” must be undermined.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘One cannot boost the other,</strong> as Beijing proposes: the shift itself will require a difficult adjustment period.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Although the vocabulary has changed,</strong> the sustainable growth Chinese policymakers want still requires a major transformation in the way income is distributed to different sectors.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Not only is the political challenge</strong> as great as ever, but because past Chinese growth has depended so heavily on the current distortions in income distribution, the transformation to a new model will almost certainly require a very difficult adjustment period.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘For dual circulation to work,</strong> internal circulation can only come at the expense of international circulation, and as this happens, wealth – and with it power – must be shifted from today’s elites to ordinary Chinese households.’</p></td></tr></tbody></table></div>

<table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#f5f5f5;"><tbody><tr><td><div><table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#FFFFFF;"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="padding:3.5%; text-align:left; font-weight:700; font-style: normal; font-variant: normal; line-height: 20px;"><span style="font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 17px; color: #c80000;">CHINA</span><span style="font-family: 'Merriweather', serif; font-size: 15.5px; color: #001544;">Debate</span></td><td style="padding:3.5%; text-align:right; font-weight:normal; font-size: 14px; font-style: normal; color: #001544; font-family: 'Lato'"></td></tr></tbody></table></td></tr><tr><td style="padding:3.5%; text-align:center;"><a style="border-bottom:none; text-decoration:none;" href="https://www.chinadebate.com/china-macro-reporter/archive" target="_blank"><img style="width:70px; border-radius:3%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);" src="https://cdn.prod.website-files.com/5a3e922cf6b9a40001bc2d6b/5e3dbbf161e6c357b022bea5_China%20Macro%20Reporter%20.png" alt="China_Macro_Reporter"></a></td></tr><tr><td style="text-align:center; font-size: 27px; font-family: sans-serif; color:#001544; font-weight:bold; line-height: 2rem;">China Macro Reporter</td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:40px; padding-top:10px; font-size: 13px; color:#001544; font-family:'Lato', sans-serif;">By Malcolm Riddell<span style="margin:0 6px">·</span>September 12, 2020</td></tr><tr><td style="text-align:center; line-height:1.5; display:block; max-width:480px; margin:0 auto; padding:10px 0; font-size: 18px; font-family: 'Noto Serif'; color:#c80000; font-weight:normal; letter-spacing: -0.5px; border-bottom:2px solid #c80000;">Opening Statement</td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/6q1BD6?track_p_id=136hIRri_GquybsQnUjbrgk" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/4x73lYAycA6tlG4fEtV_j0i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6q1BD6?track_p_id=1f6hIRri_RwQNmprhy6m1Cl" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Will China be Mr. Trump's October Surprise?</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h1 style="display: inline-block;margin-block-start: 2rem;!important: ;margin-block-end: 0.5rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 26px;line-height: 36px;font-weight: 400;letter-spacing: 0.1px;font-family: 'Lato';color: #001544;"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">In today’s issue:</strong></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">1. A Different Approach to U.S.-China Relations</strong></span></p><p style="text-align: left;display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Ever the contrarian, </strong>Yukon Huang says: ‘The path to better outcomes is exceptionally narrow, as the required compromises go against the instincts of both countries’ current leaders.’ He suggests:</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Should Democratic nominee Joe Biden</strong> become president, he would be wise not merely to revive traditional alliances or the Obama administration’s&nbsp;<a href="https://thediplomat.com/2017/01/the-pivot-to-asia-was-obamas-biggest-mistake/" rel="nofollow">Asia pivot</a>, which was viewed by Beijing as a strategy to contain China.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In response,</strong> Beijing should rein in its more aggressive foreign policy tendencies, particularly in the&nbsp;<a href="https://www.nytimes.com/2020/07/27/opinion/pompeo-south-china-sea.html" rel="nofollow">South China Sea</a>and in its&nbsp;<a href="https://www.nytimes.com/2020/01/15/business/china-belt-and-road.html" rel="nofollow">Belt and Road Initiative</a>.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Provocative</strong> but maybe just too far against the leaders’ instincts.&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">2. October Surprise: China?</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">David Wertime</strong> suggests two possible Get-Tough-on-China October surprises from President Trump:</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Dump </strong>the Phase One Trade Deal</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Wag the Dog by generating a clash</strong> with China in the South China Sea, the East China Sea, or the Taiwan Straits.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">The first is expected,</strong> and the second is garnering more attention as Mr. Trump’s re-election troubles multiply.&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">3. Trump's Tariffs, Trade War Failed.</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Last week it transpired</strong> that the US’s overall trade deficit in goods and services had reached its highest level since 2008, with a widening gap between exports and imports with China.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Hence,</strong> even on its own illogical terms, Donald Trump’s trade policy has completely failed in its self-allotted aim of reducing the US overall, and bilateral Chinese, deficit.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Not a good look</strong> going into the election, but Mr. Trump can always blame the China Virus.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">4. A Tale of Two Hong Kongs</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">So far China</strong> is having some success in beating Hong Kongers into submission, and at the same time, in juicing Hong Kong as a global financial center.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Especially interesting</strong> is that one of the motives of both is to smoothly integrate Hong Kong into the massive Greater Bay Area and to insure that Hong Kong has the chops to fund it.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">5. China’s Economy Bounces Back, But to Which Growth Path?</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Brookings’ David Dollar </strong>dissects China’s economy, and asks ‘what are the likely long-term effects of the pandemic on China’s growth model?’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Besides noting that China will </strong>less export- and investment- dependent, he points out:</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘There is a good chance</strong> that people will be more cautious about many activities even after a vaccine is developed, so private consumption will be lower and household savings will be higher than they were when China was on its previous growth path.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">A real stick-in-the-spokes </strong>for ‘rebalancing’ to a consumer-led economy.&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">6. Go Deeper: The Return of Big Chinese Surpluses (And Large U.S. Deficits)</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">'For all the talk of Sino-American decoupling,</strong> the broad pattern of global trade—at least the unbalanced bit of global trade—is remarkably simple right now,' writes Brad Setser.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Expert analysis</strong> with great charts.</li></ul><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">Go deeper into these issues - Browse the posts below.</strong></em></h2><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">To read the original article, click the title.</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Let me know what you think. </strong>And please forward the <strong style="font-weight: bold">China Macro Reporter</strong> to your friends and colleagues.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">All the best,</strong></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Malcolm</strong>&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">1. A Different Approach to U.S.-China Relations</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/8odtOy?track_p_id=3jMh5B3cgI_KSsTsNpNZ4AZ" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/G9EK0hBp39apwSTnloaxVUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/8odtOy?track_p_id=7T5I2x1b5B3cgI_ovFydgEb" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Yukon Huang's Recommendations to U.S. and Chinese Leaders</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/8odtOy?track_p_id=bkWn63lQjFuZ5B3cgI_JgAv"><img width="100%" src="https://img.scoop.it/KWePmS27kNKdoInYP_VZvTl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Carnegie Endowment</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Yukon Huang</strong> | Carnegie Endowment</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘But the path to better outcomes is exceptionally narrow, as the required compromises go against the instincts of both countries’ current leaders.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The rapidly deteriorating relations</strong> between the U.S. and China may have less to do with historical differences in political systems and ideology than with the similarities in their leaders’ aspirations.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Both came to power</strong> with strong populist agendas symbolized by Trump’s “<a href="https://www.bbc.com/news/av/world-us-canada-38698654" rel="nofollow">America First</a>” and Xi’s “<a href="https://www.chinadaily.com.cn/china/2014-04/17/content_17465392.htm" rel="nofollow">Chinese Dream</a>.” ’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Trump’s political base</strong> lies in a largely rural, white working-class who feels economically neglected and views globalization as synonymous with sending jobs abroad.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Xi’s supporters</strong> are restless workers and stalwart party cadres who welcome the opportunity to reclaim China’s status as a great power.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The interaction</strong> of these two objectives is a recipe for conflict, not engagement.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Trump’s actions</strong> have undermined the principles of an international system based on strategic alliances and cooperative behaviors.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘His assumption</strong> that geopolitics is a zero-sum game has moved U.S. policy toward China beyond containment to aggressive competition and&nbsp;<a href="https://foreignpolicy.com/2020/05/14/china-us-pandemic-economy-tensions-trump-coronavirus-covid-new-cold-war-economics-the-great-decoupling/" rel="nofollow">decoupling</a>.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Beijing continues</strong> to argue that it is merely reacting to the provocations of others—be it potentially destabilizing protests in Hong Kong or U.S. restrictions on Chinese companies like Huawei.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Regardless,</strong> China’s recent foreign policy initiatives and&nbsp;<a href="https://www.nytimes.com/2020/04/17/world/asia/coronavirus-china-xi-jinping.html" rel="nofollow">“wolf warrior” diplomacy</a>—as China’s newly aggressive style of international engagement&nbsp;<a href="https://www.cnn.com/2020/05/28/asia/china-wolf-warrior-diplomacy-intl-hnk/index.html" rel="nofollow">has been dubbed</a>—have played into the hands of U.S. hardliners.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Simplistically,</strong> one could characterize the Trump-led Republican Party’s China strategy as “chaotic decoupling,” whereas the Democrats favor “containment with hedging.” ’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Although Democrats</strong> are critical of Trump’s go-it-alone approach and argue in favor of&nbsp;<a href="https://foreignpolicy.com/2020/07/17/coronavirus-pandemic-middle-powers-alliances-china/" rel="nofollow">building global alliances</a>, skeptics could reasonably question why this would be any more effective than past efforts to tame China’s behavior.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Disengagement, however,</strong> is not a realistic option—the costs are simply too great for both sides.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But the path</strong> to better outcomes is exceptionally narrow, as the required compromises go against the instincts of both countries’ current leaders.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘If there is a basis</strong> for forging a more constructive relationship, it will likely come from China’s dependency on a rules-based multilateral system to become a more prosperous and innovative great power.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘By recognizing China’s needs,</strong> the United States can forge a new strategy of engagement that would benefit both nations.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Should Democratic nominee Joe Biden</strong> become president, he would be wise not merely to revive traditional alliances or the Obama administration’s&nbsp;<a href="https://thediplomat.com/2017/01/the-pivot-to-asia-was-obamas-biggest-mistake/" rel="nofollow">Asia pivot</a>, which was viewed by Beijing as a strategy to contain China.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Instead,</strong> he should move to defining the acceptable dimensions of a new relationship.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In response,</strong> Beijing should rein in its more aggressive foreign policy tendencies, particularly in the&nbsp;<a href="https://www.nytimes.com/2020/07/27/opinion/pompeo-south-china-sea.html" rel="nofollow">South China Sea</a>&nbsp;and in its&nbsp;<a href="https://www.nytimes.com/2020/01/15/business/china-belt-and-road.html" rel="nofollow">Belt and Road Initiative</a>.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In a better world,</strong> China would come closer to becoming what former deputy secretary of state Robert Zoellick&nbsp;<a href="https://www.ncuscr.org/content/robert-zoellicks-responsible-stakeholder-speech#:~:text=It%20was%20as%20National%20Committee,interestingly%2C%20had%20significant%20difficulty%20coming" rel="nofollow">called</a>&nbsp;a “responsible global stakeholder.” ’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Until recently,</strong> this less threatening vision of China was seemingly consistent with China’s own long-standing position in managing foreign relations.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;"> 2. A China 'October Surprise?'</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/96oDj6?track_p_id=4GZMu9INoBK_1ndEZoEfAMD" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/irry7EUsnjxPAzOLxwPDM0i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/96oDj6?track_p_id=5jgt5C9INoBK_4k4WckSrdz" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Death of trade deal with China could be 'October surprise'</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/96oDj6?track_p_id=3WbG9INoBK_qzpJUrz%40GQJM"><img width="100%" src="https://img.scoop.it/CqEnpRjMftS2R_XGVBOI8Dl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Politico</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">David Wertime </strong>| Politico</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘A Phase One trade deal collapse is the most likely China-related event to upend the U.S. election.’&nbsp;</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘A Phase One trade deal collapse</strong> is the most likely China-related event to upend the U.S. election.’&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Harvard Law School’s&nbsp;Mark Wu </strong>says President&nbsp;Donald Trump&nbsp;could declare China “off track in meeting the purchase commitments.” ’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Eurasia Group’s&nbsp;Paul Triolo&nbsp;</strong>says Trump “has become progressively less interested in the trade deal.” ’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘E14 Fund’s&nbsp;Calvin Chin </strong>says ditching the deal is the “easiest to pull off [with] good electoral bang for the buck.” ’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The Bay Area Economic Council’s&nbsp;Sean Randolph&nbsp;</strong>tells China Watcher that “while this might look like a failure at one level, Trump could try to show that he's in control, tough on China, and looking out for U.S. interests.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘There could be major movement</strong> re: Taiwan or the South China Sea.'&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Asia Society’s&nbsp;Orville Schell&nbsp;</strong>tells China Watcher “what I fear in the next two months is a ‘Gulf of Tonkin’ like incident — trumped up or real — in the South, East China Sea or Taiwan Straits that leads to a military clash and enables Trump to declare a national emergency.” ’&nbsp;</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Evan Medeiros&nbsp;of Georgetown University</strong> says to look for “a naval clash in the South China Sea.”’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'Gordon H. Chang&nbsp;of Stanford University</strong> votes for Trump making “a dramatic move to highlight his support for Taiwan.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">3. The Results are In!</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/4jRhNQ?track_p_id=9Aq3mzF4qL4y04hK_fUKbNf" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/Q7K3LvBpUHwYzkoXdXm2WUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/4jRhNQ?track_p_id=7ltaErNQ4y04hK_Vpe4tddj" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Trump's Tariffs, Trade War Failed.</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Bloomberg</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Noah Smith</strong> | Bloomberg</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">'Trump is unlikely to realize or admit that his favorite economic weapon, tariffs, is hurting the very companies it was intended to help.'&nbsp;</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><a href="https://www.ft.com/content/fa3a9746-65da-4b32-afde-eb6f858e7c03"><strong style="font-weight: bold">FT.</strong></a><em style="font-style: italic"><strong style="font-weight: bold"></strong></em><strong style="font-weight: bold">‘Last week it transpired</strong> that the US’s overall trade deficit in goods and services had reached its highest level since 2008, with a widening gap between exports and imports with China.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Hence,</strong> even on its own illogical terms, Donald Trump’s trade policy has completely failed in its self-allotted aim of reducing the US overall, and bilateral Chinese, deficit.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><a href="https://www.bloomberg.com/opinion/articles/2020-09-10/trump-s-tariffs-trade-war-failed-can-biden-do-better?sref=UNCdSoO2"><strong style="font-weight: bold">Bloomberg.</strong></a><strong style="font-weight: bold"> 'With the U.S. presidential campaign</strong> heading into the home stretch, President Donald Trump will surely try to tout his record on economic issues.'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'Trump was elected in 2016</strong> on a promise to restore American competitiveness, revitalize the flagging manufacturing sector, and reduce gaping trade deficits.'</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'But even before the pandemic,</strong> his trade war looked decidedly less than successful.'</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">'Despite a massive slate of tariffs</strong> that mostly began in the second half of 2018, the U.S.-China bilateral trade deficit barely budged, if at all:'</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></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/DIX6OukhySkiNLUc4nZaoTl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><p style="margin: 0;display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong>‘The same pattern</strong> holds for the overall U.S. trade deficit, which hasn’t changed much since the end of the last recession:’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></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/NEc-zA73oG6whf0s2COQ7Dl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘U.S.&nbsp;</strong><a href="https://fred.stlouisfed.org/series/IMPGSC1" rel="nofollow"><strong style="font-weight: bold">imports flatlined</strong></a>&nbsp;in 2018 and 2019, but&nbsp;<a href="https://fred.stlouisfed.org/series/EXPGSC1" rel="nofollow">so did exports</a>.'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Nor did the U.S. factory sector</strong> enjoy a renaissance. Manufacturing production had been growing along with the overall economy before Trump unleashed his trade war, but it stagnated afterward:’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></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/CD7RvsU9jz059vkhd3BFnzl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Tariffs simply failed</strong> to do the job Trump and advisors such as economist Peter Navarro and trade representative Robert Lighthizer wanted them to do.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘They may have hurt</strong> China’s economy somewhat, but at the cost of&nbsp;<a href="https://www.bloomberg.com/opinion/articles/2019-08-01/trump-s-trade-war-has-hurt-both-the-u-s-and-china?sref=R8NfLgwS" rel="nofollow">also hurting</a> U.S. consumers in the process.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘And they didn’t accomplish</strong> any of their primary stated purposes — cutting the trade deficit, increasing U.S. competitiveness relative to China, or restoring U.S. manufacturing.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">4. Hong Kong as a Financial Hub is Doing Just Fine</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/51c1hY?track_p_id=bUHdSHeorWDK4sotZe_magL" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/zxbyrGBKPhFFZLzMYqfYnUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/51c1hY?track_p_id=04sotZe_xglrL2vZDH2lxfg" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">A tale of two Hong Kongs: Beijing cracks down while the financial hub thrives&nbsp;</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/51c1hY?track_p_id=ccjPXUW6guOdo4sotZe_jV5"><img width="100%" src="https://img.scoop.it/WexDgzPhL3dg4FeyObRjCjl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Financial Times</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">James Kynge</strong> | Financial Times</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">'Beijing is determined to keep Hong Kong’s financial fires burning partly because it needs its fundraising prowess to spearhead an ambitious plan to develop the Greater Bay Area.'</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘It is a tale</strong> of two Hong Kongs.'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Twelve pro-democracy activists</strong> were last week captured by China’s coast guard as they attempted a dramatic speedboat escape to Taiwan.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Two days before</strong> the thwarted escape was revealed, Ant Group announced plans in Hong Kong to launch what may become the biggest share offering in history.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">&nbsp;‘The huge initial public offering</strong> has become a focal point for those who hope that capitalism can continue to boom even as civil liberties are eroded.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “The destruction of political rights in Hong Kong</strong> does not necessarily mean its demise as an economic and financial centre. It will be different from what it was,” says Steve Tsang, director of the China Institute at Soas University in London. “It may be the end of Hong Kong as we knew it, but it will not be the end of Hong Kong.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘As tensions escalate between the US and China,</strong> Ant Group is not offering shares for sale in the US but is tapping top investment banks such as Citigroup, JPMorgan and Morgan Stanley to pull in all-important American institutional money.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In this regard,</strong> the listing is designed to suck in US funds to further one of Beijing’s strategic aims: the creation of a technology and finance network in the Greater Bay Area that has the momentum to become a world leader.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Former officials and government advisers </strong>say Beijing is determined to keep Hong Kong’s financial fires burning partly because it needs its fundraising prowess to spearhead an ambitious plan to develop the Greater Bay Area, a zone of some 70m people in southern China with an annual gross domestic product already greater than that of Australia, Indonesia or Mexico.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “Beijing will do everything</strong> it can to help Hong Kong fulfil its role as a fundraising centre for the Greater Bay Area and southern China’s window to the world,” says a former senior Chinese official in Hong Kong, who declined to be identified.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “But it is time that Hong Kong</strong> worked hard for mainland China’s benefit, not just for itself.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Underlining such ambitions,</strong> Hang Seng Indexes has launched a tech Index, to track some of mainland China’s biggest technology companies.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Several of these companies,</strong> such as Alibaba, JD.com and NetEase, have their primary listings in New York but have recently launched “homecoming” secondary listings as US-China tensions have risen. Ant Group is expected to be included in the tech index.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Such “homecomings”</strong> represent a huge potential windfall for Hong Kong’s financial prospects.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China Renaissance Securities,</strong> an investment bank, says there are 32&nbsp;US-listed Chinese companies with a total market capitalisation of almost $200bn that qualify for such listings.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Even if only a proportion</strong> of these was to go ahead in Hong Kong over the next few years, the impact would, at a minimum, shore up the market, say investors.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Although inflows of “red capital” </strong>from the mainland plus the draw of the Greater Bay Area vision are expected to help buoy fortunes, questions of governance loom large, says Kurt Tong, who served as US consul-general in Hong Kong for three years until June 2019.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “A harder question</strong> is whether Hong Kong will continue to remain regionally or globally relevant and be more than just an unusually sophisticated part of China.” ’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘ “The key</strong> to this will be the continued rule of law,” says Tong.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘If authorities crack down on journalists</strong> who uncover corruption, abuses may proliferate. If professional services firms are encouraged to turn a blind eye to some accounting irregularities, trust may be eroded.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘If researchers</strong> who criticise China’s state-owned enterprises find that their work visas are terminated, transparency will suffer.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘If an insider culture</strong> dominated by well-connected mainland Chinese families takes hold, businesses will fear an uneven playing field.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">&nbsp;‘ “Hong Kong became a thriving international financial centre</strong> because it was, and is, a gateway to China,” says Karine Hirn, partner at East Capital, an investment fund.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">' "But I actually see a possibility </strong>that [Hong Kong] becomes a more dynamic financial centre as it gets a boost from China’s business influence.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">5. Which Growth Path Will China Take?</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/5JmM1g?track_p_id=a5hXPxh3xEr57eR7W_nTmKD" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/TPjbT9SXGv8lqWQSzgh7nEi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/5JmM1g?track_p_id=3VA157eR7W_WisTcclLqJHa" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">China’s Economy Bounces Back, But to Which Growth Path?</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/5JmM1g?track_p_id=4r63C57eR7W_WuNlPmqSRb1"><img width="100%" src="https://img.scoop.it/1xzK0h1_4OKlCQxvq76OGTl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">China Leadership Monitor</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">David Dollar</strong> | Brookings</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘China can turn all of these factors to its advantage, but it will take an acceleration of reform to do so.’&nbsp;</strong></em></h2><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Terrific but long analysis. I've reorganized a bit to get David's points across succinctly. You definitely should read the whole report&nbsp;</strong></h3><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘What are the likely long-term effects</strong> of the pandemic on China’s growth model?’&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">1. ‘First, in the short run,</strong> China will certainly be less export-dependent.’&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The rest of the world</strong> was hit by the virus later than China and thus will recover later, so for the moment there is depressed demand for Chinese exports and they cannot be a leading force for recovery.’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Also, it is difficult to separate</strong> the virus from the U.S. trade war, which is continuing and likely to escalate. ‘Hence<strong style="font-weight: bold">,</strong> in the future it is likely that there will be less trade and investment back and forth between China and the U.S.’&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">2. ‘A second likely change</strong> in the growth model is that it will be less investment-dependent.’&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China has built up</strong> very high leverage in its economy, a sign that the big lending spree since the global financial crisis included many bad projects, which now have turned into bad loans that threaten the stability of the financial system.’&nbsp;</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The pandemic increases the risk</strong> of a financial crisis because some otherwise sound businesses will go under, leaving more bad debts.’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">3. ‘Third, while uncertain at this moment,</strong> there is a good chance that people will be more cautious about many activities even after a vaccine is developed, so private consumption will be lower and household savings will be higher than they were when China was on its previous growth path.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘An obvious substitute</strong> for lost private demand would be more government provision of social services, such as healthcare, education, unemployment compensation, and pensions.’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">4. ‘Finally,</strong> as a corollary to the third point, the pandemic has exposed weaknesses in China’s safety net, especially for the nearly 300 million migrant workers, 200 million of whom do not have fair access to public services in health, education, and pensions.’&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China</strong> is entering a demographic phase in which the elderly population will increase dramatically while the labor force will shrink.’&nbsp;</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Most of the elderly live</strong> in the countryside, often as their grown children work elsewhere.’ &nbsp;</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Mobility </strong>is constrained by the hukou system as well as by access to healthcare and the portability of pensions.’&nbsp;</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Given what is likely</strong> to be a persistent shortfall in demand, this is a good moment to expand public resources for social services and to unify the urban and rural systems.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘China can turn all of these factors </strong>to its advantage, but it will take an acceleration of reform to do so.’&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">6. Go Deeper: Trade Surpluses &amp; Deficits</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/5bwgLo?track_p_id=9UZXd3n6IP7DyFAM_QU343g" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/DKFLL_WFNIxtoniJ10LrLki__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/5bwgLo?track_p_id=3D3Z7DyFAM_hw52VlCn6VIa" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">The Return of Big Chinese Surpluses (And Large U.S. Deficits)</a></td></tr></tbody></table></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/NSsBvIlU0fWVKqrTztzOpDl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Council on Foreign Relations</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Brad Setser</strong> | Council on Foreign Relations</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">'World trade in goods doesn’t add up without China’s $1 trillion surplus in manufactures on one side, and the United States $1 trillion deficit in non-petrol trade on the other side.'</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">'For all the talk of Sino-American decoupling,</strong> the broad pattern of global trade—at least the unbalanced bit of global trade—is remarkably simple right now.'</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">'On the surplus side</strong> of the ledger there is China, along with a few other Asian producers of the manufactures.'&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'</strong><a href="https://www.nytimes.com/2020/08/31/business/trumps-tariffs-coronavirus-china-exports.html" rel="nofollow"><strong style="font-weight: bold">Keith Bradsher has reported that</strong></a> China's share of global exports&nbsp;reached a record in the second quarter, at nearly 20 percent.'</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'Continued strength in exports</strong> has helped China post monthly (goods) surpluses of around $60 billion in July and August.'</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></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/lCUx-DQOxV1RwMn7p6nawTl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><p style="margin: 0;display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong>'And on the deficit side</strong> of the ledger there is… the United States. The U.S. trade deficit (goods and services) topped $60 billion in July, its highest level in many years'</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></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/O0Gbf4_pykYhEWX7bFOcUzl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘It is thus now</strong> more clear than ever that world trade in goods doesn’t add up without China’s $1 trillion surplus in manufactures on one side, and the United States $1 trillion deficit in non-petrol trade on the other side.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The need for a U.S. deficit </strong>to offset Asian surpluses (and Asian surpluses to fill the U.S.&nbsp;deficit) has to a degree&nbsp;<a href="https://phenomenalworld.org/interviews/trade-wars-are-class-wars" rel="nofollow">long been true</a>.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘What’s striking though</strong> is that the pandemic has led to a compression of most other trade imbalances.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘‘So almost all</strong> that is left now is the big Chinese surplus (from q2 on) and the equally big U.S. deficit (from q2 on).’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></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/O0Gbf4_pykYhEWX7bFOcUzl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><p style="margin: 0;display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong>‘These are</strong> “real” imbalances too.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong>‘Over the last 12 months,</strong> China generated&nbsp;a $1 trillion surplus in manufactures off around $2.3 trillion in exports.’</li></ul><p style="margin: 0;display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong>‘In July,</strong> China generated a $110 billion surplus in manufactures off $230 billion in exports.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong>‘So even counting imported parts,</strong> China is getting close to exporting $2 worth of manufactures for every manufactured good it imports.’</li></ul><p style="margin: 0;display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong>‘And the United States’</strong> roughly $1 trillion U.S. deficit in manufactures comes off around $2 trillion in manufactured imports.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong>‘So the U.S. exports</strong> a dollar in manufactures for every two it imports.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></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/CXE8g9Alvee4dwZr60nu8zl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘There are of course reasons</strong> why the return of the Sino-American trade imbalance might be temporary.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China’s dominance </strong>of personal protective equipment manufacturing for example has helped push up its goods surplus.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The pandemic created a temporary boom </strong>in electronics demand to facilitate remote work (and school) as U.S. consumption shifted away from domestic services toward imported hardware, playing into another Chinese strength.’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘And China's overall current account surplus</strong> ($120 billion, or just over three percent of China's GDP) has been increased by the fall in travel.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘That has cut</strong> into China's reported services deficit.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘But there is also a policy story</strong> that suggests the renewed Trans-pacific imbalance could be durable.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘As Michael Pettis has noted,</strong> China has responded to the pandemic with policies that support firms and production—and been very restrained in its direct income support for consumers and households.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The United States,</strong> by contrast, provided a lot of support for households—at least initially.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘China’s fiscal response</strong> is generally estimated to be far smaller than in 2009, while the United States’ response (to date) has been bolder.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘That policy differential</strong>—plus China’s&nbsp;<a href="https://www.nytimes.com/2020/08/31/business/trumps-tariffs-coronavirus-china-exports.html" rel="nofollow">ongoing exchange rate management&nbsp;</a>which has kept&nbsp;<a href="https://www.wsj.com/articles/the-mystery-of-chinas-bulging-trade-surplus-and-weak-currency-11599475239" rel="nofollow">the yuan relatively weak</a>—could reinforce the return of pre-2008 style trade imbalance.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div></td></tr></tbody></table>

<table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#f5f5f5;"><tbody><tr><td><div><table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#FFFFFF;"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="padding:3.5%; text-align:left; font-weight:700; font-style: normal; font-variant: normal; line-height: 20px;"><span style="font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 17px; color: #c80000;">CHINA</span><span style="font-family: 'Merriweather', serif; font-size: 15.5px; color: #001544;">Debate</span></td><td style="padding:3.5%; text-align:right; font-weight:normal; font-size: 14px; font-style: normal; color: #001544; font-family: 'Lato'"></td></tr></tbody></table></td></tr><tr><td style="padding:3.5%; text-align:center;"><a style="border-bottom:none; text-decoration:none;" href="https://www.chinadebate.com/china-macro-reporter/archive" target="_blank"><img style="width:70px; border-radius:3%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);" src="https://cdn.prod.website-files.com/5a3e922cf6b9a40001bc2d6b/5e3dbbf161e6c357b022bea5_China%20Macro%20Reporter%20.png" alt="China_Macro_Reporter"></a></td></tr><tr><td style="text-align:center; font-size: 27px; font-family: sans-serif; color:#001544; font-weight:bold; line-height: 2rem;">China Macro Reporter</td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:40px; padding-top:10px; font-size: 13px; color:#001544; font-family:'Lato', sans-serif;">By Malcolm Riddell<span style="margin:0 6px">·</span>Sep 9, 2020</td></tr><tr><td style="text-align:center; line-height:1.5; display:block; max-width:480px; margin:0 auto; padding:10px 0; font-size: 18px; font-family: 'Noto Serif'; color:#c80000; font-weight:normal; letter-spacing: -0.5px; border-bottom:2px solid #c80000;">Opening Statement</td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="" target="_blank" title="Malcolm_Riddell"><img height="50px" width="auto" alt="Malcolm_Riddell" src="https://img.scoop.it/4x73lYAycA6tlG4fEtV_j0i__cjguAuwrRM5-qsdIhQ=('/crop/45')" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Decoupling...It's Complicated.</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h1 style="display: inline-block;margin-block-start: 2rem;!important: ;margin-block-end: 0.5rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 26px;line-height: 36px;font-weight: 400;letter-spacing: 0.1px;font-family: 'Lato';color: #001544;"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">The outlines of U.S.-China ‘decoupling’</strong> are becoming a little firmer.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">With this, two sides</strong> are emerging.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">On the ‘What Decoupling?’</strong> side:</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">U.S. companies </strong>in China are mostly staying put.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">And U.S. financial institutions</strong> are increasing their stakes.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">On the ‘Could we decouple faster?’ </strong>side is tech, especially semiconductors<strong style="font-weight: bold">:</strong></p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">China isn’t yet capable</strong> of producing world-class chips.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">And the Trump administration</strong> is getting better and better at starving China of them and the technology needed to make them.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">At the same time, </strong>the U.S. is waking up to the need for its own industrial policy that accelerates the U.S. lead in semiconductors and counters China’s massive support of its industry.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Nothing is firm</strong> yet, but it’s now just a matter of time.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">For China’s part,</strong> General Secretary Xi Jinping is betting on the state sector, supported by private firms, plus lots of money, to try to end China’s reliance on foreign imports and make China’s tech sectors not only self-reliant but world leaders.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">We look at each</strong> of these in today’s issues:</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">1. Betting on China: Manufacturers &amp; Financial Firms</strong></span></p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'US Companies </strong>Defy Trump’s Threats About ‘Decoupling’ From China.'</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'Why Is Wall Street </strong>Expanding in China?'</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">2. Betting Against China: Tech</strong></span></p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'The Coming Tech Cold War </strong>With China.'</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'Semiconductors </strong>and Modern Defense Spending.'</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">3. Betting On The State: Xi Jinping</strong></span></p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'Xi Signals </strong>Unshaken Commitment to State’s Role In Chinese Economy.'</li></ul><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><strong style="font-weight: bold">Go deeper into these issues - Browse the posts below.</strong></h2><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><strong style="font-weight: bold">To read the original article, click the title.</strong></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Let me know what you think. </strong>And please forward the <strong style="font-weight: bold">China Macro Reporter</strong> to your friends and colleagues.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">All the best,</strong></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Malcolm</strong>&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">1. Betting on China: Manufacturers &amp; Finance Firms</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/8vZk2a?track_p_id=4KB4f4kTeZy_J6YMfRYnKQn" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/zxbyrGBKPhFFZLzMYqfYnUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/8vZk2a?track_p_id=5QUTnD4kTeZy_kbbKPuaw2k" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">'US companies defy Trump’s threats about ‘decoupling’ from China'</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/8vZk2a?track_p_id=aYxpXNS6bev4kTeZy_p%40Qdi"><img width="100%" src="https://img.scoop.it/BhOlBeD3hnXXYY_eKZIBeDl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="text-align: right;display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;">Ker Gibbs, AmCham Shanghai</h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Financial Times</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘US companies are ignoring Donald Trump’s threats to “decouple” from China and repatriate manufacturing.'</strong></em></h2><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><a href="https://www.amcham-shanghai.org/en/article/amcham-shanghai-releases-2020-china-business-report"><strong style="font-weight: bold">Read more </strong></a>of ‘AmCham Shanghai: 2020 China Business Report’ results.</h3><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘US companies are ignoring</strong> Donald Trump’s threats to “decouple” from China and repatriate manufacturing, according to a survey of more than 200 companies with operations in the country.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The American Chamber of Commerce in Shanghai</strong> found that fewer than 4 per cent of respondents were relocating some production capacity back to the US. The majority — more than 70 per cent — had no plans to relocate any manufacturing out of China despite higher tariffs from Mr Trump’s long-running trade war with the world’s second-largest economy.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘ “Covid-19 hit the Chinese economy</strong> hard in early 2020, but the recovery was quick,” Ker Gibbs, chamber president, said on Tuesday.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “American companies</strong> still see China’s consumer market as a great opportunity.” '</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Earlier this week,</strong> Mr Trump reiterated his enthusiasm for “decoupling” the world’s two largest and closely integrated economies.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “If we didn’t do business with [China]</strong> we wouldn’t lose billions of dollars,” he said. “We will make America into the manufacturing superpower of the world and will end our reliance on China once and for all.” ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘According to the survey,</strong> the rapidly deteriorating Sino-US relationship is now the largest concern for American companies, overshadowing for the first time perennial fears about slower economic growth in China, domestic competition and intellectual property protection.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “The geopolitical tension</strong> is the number one concern among business operations managers, which is remarkable,” Mr Gibbs said.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Chinese economy</strong> has shown signs that it has largely bounced back from the coronavirus pandemic.’&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China</strong> is also continuing to rack up large bilateral monthly trade surpluses with the US — surpluses that Mr Trump expected the two countries’ “phase-one” trade deal, signed in January before coronavirus erupted in central China, would help reduce.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/9Dk4Mi?track_p_id=2d35VWfOA_DJRqX3f31CBW3" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/_WMiBTDcNqqcPnQt-JHFGUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/9Dk4Mi?track_p_id=erVXipcqhiopQO35VWfOA_m" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">'Why is Wall Street expanding in China?' </a></td></tr></tbody></table></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/K6iuu3lkhYBuRBtyw4IQszl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The Economist</strong></h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘Far from short-term greed, Wall Street’s taste for China reflects a long-term bet that finance’s centre of gravity will shift east.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In the tech&nbsp;industry</strong> the rupture between China and America continues to grow.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Yet in one part</strong> of the global economy the pattern is of superpower engagement, not estrangement: high finance.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘BlackRock,</strong> a giant asset manager, has got the nod to set up a Chinese fund business.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Vanguard,</strong> a rival, is shifting its Asian headquarters to Shanghai.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘JPMorgan Chase</strong> may spend $1bn to buy control of its Chinese money-management venture (see&nbsp;<a href="https://www.economist.com/finance-and-economics/2020/09/03/is-wall-street-winning-in-china" rel="nofollow">article</a>).’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Foreign fund managers</strong> bought nearly $200bn of mainland Chinese shares and bonds in the past year.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Far from short-term greed,</strong> Wall Street’s taste for China reflects a long-term bet that finance’s centre of gravity will shift east.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And unlike in tech,</strong> both sides think they can capture the benefits of interaction without taking too much risk.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Western, and in particular American,</strong> capital markets still reign supreme on most measures. Derivatives are often traded in Chicago; currencies in London.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘American firms</strong> dominate the league tables in asset management and investment banking.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The White House</strong> has sought to weaponise America’s pre-eminence, by pushing Chinese firms to delist their shares from New York, for example.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But if anything</strong> the trade war has shown the growing muscle of China in finance.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘A big wave of&nbsp;ipos</strong> is taking place in Hong Kong, often done by firms keen for an alternative to New York.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China’s prowess in fintech</strong> will soon be centre-stage with the listing of Ant Group, which may be the world’s largest&nbsp;ipo’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And then there</strong> is the surprising rush of Wall Street firms and other foreign investors into mainland China.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘They have been knocking</strong> on the door for 30 years with little success.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Now they are betting</strong> that China is serious about welcoming foreign finance.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘With its current-account surplus</strong> set to fall over time, or even fall into deficit, it needs to attract more foreign capital.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The terms of access</strong> have improved.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China is at last</strong> allowing Western firms to take control of their mainland operations and has made it easier for fund managers to buy and sell mainland securities.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The potential prize is vast:</strong> a new source of fees for Wall Street banks, and for fund managers a huge universe of potential customers and companies to invest in.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘There are risks.’</strong></p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China could bend</strong> the rules to protect local banks and brokers. Corruption is a hazard: in 2016 JPMorgan Chase was fined by American regulators for giving jobs to well-connected Chinese “princelings”.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Worries</strong> over human-rights abuses may intensify.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And navigating America’s sanctions regime</strong> will be tricky—global banks active in Hong Kong, such as&nbsp;hsbc, are already under pressure to cut off some Chinese officials there.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Yet American financial firms’</strong> exposure to China is low enough that they have little to lose.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The tech industry</strong> is dangerously dependent on China: Apple assembles many of its devices there.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘By contrast,</strong> the top five Wall Street banks have only 1.6% of their assets exposed to China and Hong Kong.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘China’s ability to attract Wall Street firms</strong> during a bitter trade war shows the clout its capital markets have.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But to become a financial superpower</strong> it would need to create its own global finance and payments infrastructure and make the yuan more freely convertible.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The leading Chinese firms</strong> have a tiny presence abroad (just 5% of revenues for Ant) and most of China’s trade is invoiced in dollars, making it vulnerable to American sanctions.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Building an alternative</strong> to America’s global monetary network is a huge task that will take years and require China’s control-obsessed officials to loosen their grip further.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Still, the trade war</strong> has given China a big incentive to take the next step.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">2. Betting Against China: Tech</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/4qNY12?track_p_id=4rzBx7Ep2YY_DzQs2uBEPDE" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/2P2LxiV-sg54VayqL9X2F0i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/4qNY12?track_p_id=clVXANZ6KXcTZ7Ep2YY_IrG" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">'The Coming Tech Cold War With China'</a></td></tr></tbody></table></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/lUx6yn5CDaf9oy3RrgWlCTl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Foreign Affairs</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Adam Segal </strong>| Council on Foreign Relations</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘The contours of the “tech cold war” have become clear.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘China and the United States</strong> are preparing for a long-term technological rivalry.'</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Three and a half years</strong> into its first term, the administration of U.S. President Donald Trump has finally assembled a comprehensive strategy for technological competition with China.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘From cutting chains</strong> that supply Chinese tech giants to barring transactions with them to regulating the undersea cables on which telecommunications depend, the Trump administration’s measures have often been incomplete, improvisational, and even detrimental to some of the great strengths of the American innovation system.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘They have</strong>, however, set the outlines of U.S. technology policy toward China for the near future. That policy rests on:’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘blocking the flow</strong> of technology to China,’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘reshoring</strong> some high-tech supply chains and restructuring other global supply chains, and’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘investing </strong>in emerging technologies at home.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Trump has set the course</strong> for U.S. technological competition with China.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘If there is a change in administration,</strong> the changes in the policy are likely to be a matter of fine-tuning.’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘These essential precepts</strong> are as clear to Beijing as they have become in Washington. As a result, China is preparing for a future in which it cannot rely on the United States for essential technologies. Beijing’s counterstrategy, too, has crystallized.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China is racing</strong> to develop semiconductors and other core technologies so as to reduce its vulnerability to supply chains that pass through the United States.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In pursuit of that goal,</strong> its leaders are mobilizing tech companies, tightening links to the countries participating in China’s Belt and Road Initiative, and sustaining a campaign of cyber-industrial espionage.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘As it looks to diversify its supply chain,</strong> China has taken an interest in open-source solutions that it believes will not be subject to U.<a href="https://www.linuxfoundation.org/blog/2020/07/understanding-us-export-controls-with-open-source-projects/" rel="nofollow">S. sanctions</a>.'</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Finally,</strong> if worst comes to worst, Beijing retains a powerful policy tool in its quiver: it can always retaliate against U.S. technology firms.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The contours of the “tech cold war”</strong> have become clear, but who, if anyone, will benefit from this competition remains an open question.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘A bifurcated technology</strong> world will likely innovate more slowly, at least in the short term.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘It will also</strong> be expensive.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘A&nbsp;</strong><a href="https://www.dbresearch.com/PROD/RPS_EN-PROD/PROD0000000000507995/The_coming_Tech_Wall_and_the_covid_dilemma.pdf" rel="nofollow"><strong style="font-weight: bold">report&nbsp;</strong></a><strong style="font-weight: bold">from Deutsche Bank</strong> estimates the costs of the tech war at more than $3.5 trillion over the next five years.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Still, leaders on both sides</strong> of the Pacific hope to fast-track technological development at home by making it a matter of national security.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘This year,</strong> the National People’s Congress unveiled a five-year plan in which municipalities, provinces, and companies will invest close to $1.4 trillion in building “<a href="https://www.wsj.com/articles/chinas-trillion-dollar-campaign-fuels-a-tech-race-with-the-u-s-11591892854?mod=hp_listb_pos3" rel="nofollow">new infrastructure</a>” through AI, data centers, 5G, the Industrial Internet, and other new technologies.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Chinese policymakers</strong> especially seek to reduce their country’s dependence on the United States for semiconductors.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Chinese industrial policy</strong> has allowed the country to make gains in areas such as&nbsp;<a href="https://spectrum.ieee.org/computing/hardware/will-china-attain-exascale-supercomputing-in-2020" rel="nofollow">supercomputers</a>, but Beijing’s top-down direction can also produce inefficiency, waste, and redundancy.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Most notably,</strong> the government has so far failed to close the gap between China and the United States in semiconductors, despite decades of support to that industry, and current efforts are unlikely to yield immediate breakthroughs.’ &nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In October 2019,</strong> Beijing established a $29 billion semiconductor&nbsp;<a href="https://www.eetimes.com/chinas-big-fund-phase-ii-aims-at-ic-self-sufficiency/" rel="nofollow">fund</a>, and in&nbsp;<a href="http://www.gov.cn/zhengce/content/2020-08/04/content_5532370.htm" rel="nofollow">August</a>, Chinese officials introduced other policies to support the chip industries, including tax benefits, research and development support, and incentives for international semiconductor companies to relocate to China.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Two government-backed chip manufacturers</strong> have reportedly hired more than&nbsp;<a href="https://asia.nikkei.com/Business/China-tech/China-hires-over-100-TSMC-engineers-in-push-for-chip-leadership" rel="nofollow">100 veteran engineers and managers&nbsp;</a>from Taiwan Semiconductor Manufacturing Company, the world’s leading chipmaker, and a cybersecurity firm recently revealed a two-year hacking&nbsp;<a href="https://www.wired.com/story/chinese-hackers-taiwan-semiconductor-industry-skeleton-key/" rel="nofollow">project</a>&nbsp;that stole source code, software development kits, and chip designs from seven Taiwanese chip firms.’ &nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/58XsLA?track_p_id=dFAH3FZNW33HSi5DvXKA_Aw" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/VcdAHHrWxK2Oai7z2r1MjUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/58XsLA?track_p_id=6rzcBnj5DvXKA_ckercb65E" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">'Semiconductors and Modern Defense Spending'</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Center for Strategic and International Studies</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">James Andrew Lewis</strong> | Center for Strategic and International Studies</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘Semiconductors should be the focal point for this new kind of U.S. defense spending.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘There is growing recognition</strong> of the competition with China in key technologies.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But for semiconductors,</strong> the measures the United States has taken so far are defensive.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Measures to block exports</strong> of semiconductors manufacturing equipment, restrict sales of chips made using U.S. equipment, and block Chinese acquisitions of U.S. chipmakers work to preserve the status quo, for now.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘They slow China’s growth,</strong> but they do not provide for a strong U.S. semiconductor industry.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Doing this requires</strong> increased federal investment to accompany policies oriented toward ensuring access to the global market.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Federal investment</strong> in strategic industries is no longer a taboo concept.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Let’s start</strong> by noting the United States used industrial policy to win in each of its global conflicts.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Not only was industrial policy</strong> the key to helping win those conflicts, but the technology base built in World War II and later expanded tremendously for the Cold War is the foundation of our national wealth today.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Silicon Valley</strong> was built on that federal investment, but those investments were made decades ago.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘We are coasting</strong> on spending in science, research, and technology that date to the 1980s.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘To defend ourselves</strong> against hostile powers, federal investment is again necessary.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Semiconductors </strong>should be the focal point for this new kind of defense spending.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The Chinese know this,</strong> which is why they have been willing to spend billions of dollars for decades to build their own industry.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Semiconductors power</strong> our economy and our weapons, but there is now a real risk that the United States will lose its leadership in this foundational technology.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Funding the CHIPS Act</strong> will compensate for revenues lost to new export sanctions on China and help maintain strength in a foundational technology.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Some argue</strong> that the U.S. chip industry does not need federal support.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘This would be true in a perfect world</strong> where no other country used subsidies. Nor does China have any intention to end its subsidies.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘This leads</strong> us to the CHIPS Act.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘CHIPS could be a significant step</strong> forward for national security if it is adequately funded. It would provide incentives for investment in semiconductors in the United States and better position it to compete.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The original language</strong> of the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act (now merged in the National Defense Authorization Act with the American Foundries Act) provided strong support for the semiconductor industry, including $3 billion of R&amp;D funding for the National Science Foundation (NSF), $2 billion for the Department of Energy, and $2 billion for the Defense Advanced Research Projects Agency.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘It created a National Semiconductor Technology Center</strong> to conduct research with the private sector, with a recommended budget of $3 billion over 10 years.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘It proposed a $10 billion trust fund</strong> to match state and local incentives, created an Advanced Packaging National Manufacturing Institute at the Department of Commerce, and authorized a semiconductor research program at the National Institute of Standards and Technology.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Finally,</strong> it called for tax credits for qualified semiconductor equipment or manufacturing facility expenditures through 2027.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Fully funding the CHIPS Act</strong> will create incentives, competitive advantage, and support national security.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="height:2rem; font-size:0; background-color:#f5f5f5;">&nbsp;</td></tr><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">3. Betting on the State: Xi Jinping</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/5isWzQ?track_p_id=6zUwADc8g0hAM_FhSJspT1s" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/ohddhZS_FxQLYTIJ6GKMLUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/5isWzQ?track_p_id=dpdbEwDn45hE1g8g0hAM_iB" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">'Xi signals unshaken commitment to state’s role in Chinese economy'</a></td></tr></tbody></table></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/qayu_dSE06H-GL8fZ2xQVzl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Merics</strong> | Mercator Institute for Chinese Studies, Berlin</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">“The signals are clear: China’s state-led capitalism will stay, especially now that kick-starting the economy is urgent.”</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The facts:</strong>&nbsp;On a visit to Anhui Province, Chinese President Xi Jinping stressed his support of state-owned enterprises as the core of the economy.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Xi has been touring the regions</strong> this year and his stop at steelmaker Magang on August 19 was his fifth at a large state-owned enterprise (SOE).’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Xi’s visits are strong signals</strong> of how much support SOEs enjoy in Beijing and underscore policy declarations issued over the last months.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘They have stressed the need</strong> to maintain the “public economy as the mainstay of the economy” and Xi’s belief in the importance of SOEs as drivers of innovation.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘What to watch:</strong>&nbsp;Xi is marking out his priorities in the run-up to the Chinese Communist Party’s Central Committee plenum in October that will discuss the People’s Republic’s 14th Five Year Plan (2021-25), and “future targets for 2035.” ’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘These will reflect a strong state-led development model</strong> and the desire to become a nation of “wealth and power” by 2035.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘After officially dropping</strong> the Made in China 2025 Strategy due to global pushback, Xi’s visits and the statements about the role of the state in the economy prove that industrial upgrading, indigenous innovation, and achieving industry leadership in strategic industries will loom large.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The US-China trade war,</strong> technological dependence and increasing tensions with the European Union over Hong Kong, human rights and trade are stark reminders to policymakers in Beijing of the need for national self-reliance and technological build-up.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The next months</strong> will see more signals of state support for domestic technology and industrial modernization.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘MERICS analysis by Nis Grünberg:</strong>&nbsp;“Xi’s tours give carefully curated political signals about Beijing’s priorities.”</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">“Private companies</strong> are still welcome, in fact China needs their innovation and growth potential more than ever.”</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">“But a foundation</strong> of politically controlled, strategic industries will remain at the core of the economic system.”</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">“The desire for strong SOEs</strong> and their international expansion is driven by a growing discourse about self-reliance and independence from imports of critical technology.”</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">“The Trump administration’s moves</strong> to ban Chinese companies and products are making Beijing’s desire to boost domestic capabilities and independence more urgent.”</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">“The signals are clear:</strong> China’s state-led capitalism will stay, especially now that kick-starting the economy is urgent.”</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div></td></tr></tbody></table>

<table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#f5f5f5;"><tbody><tr><td><div><table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background-color:#FFFFFF;"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="padding:3.5%; text-align:left; font-weight:700; font-style: normal; font-variant: normal; line-height: 20px;"><span style="font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 17px; color: #c80000;">CHINA</span><span style="font-family: 'Merriweather', serif; font-size: 15.5px; color: #001544;">Debate</span></td><td style="padding:3.5%; text-align:right; font-weight:normal; font-size: 14px; font-style: normal; color: #001544; font-family: 'Lato'"></td></tr></tbody></table></td></tr><tr><td style="padding:3.5%; text-align:center;"><a style="border-bottom:none; text-decoration:none;" href="https://www.chinadebate.com/china-macro-reporter/archive" target="_blank"><img style="width:70px; border-radius:3%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);" src="https://cdn.prod.website-files.com/5a3e922cf6b9a40001bc2d6b/5e3dbbf161e6c357b022bea5_China%20Macro%20Reporter%20.png" alt="China_Macro_Reporter"></a></td></tr><tr><td style="text-align:center; font-size: 27px; font-family: sans-serif; color:#001544; font-weight:bold; line-height: 2rem;">China Macro Reporter</td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:40px; padding-top:10px; font-size: 13px; color:#001544; font-family:'Lato', sans-serif;">By Malcolm Riddell<span style="margin:0 6px">·</span>September 3, 2020</td></tr><tr><td style="text-align:center; line-height:1.5; display:block; max-width:480px; margin:0 auto; padding:10px 0; font-size: 18px; font-family: 'Noto Serif'; color:#c80000; font-weight:normal; letter-spacing: -0.5px; border-bottom:2px solid #c80000;">Opening Statement</td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="" target="_blank" title="Malcolm_Riddell"><img height="50px" width="auto" alt="Malcolm_Riddell" src="https://img.scoop.it/4x73lYAycA6tlG4fEtV_j0i__cjguAuwrRM5-qsdIhQ=('/crop/45')" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">Will Pledging to Defend Taiwan Avoid U.S. War with China?</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h1 style="display: inline-block;margin-block-start: 2rem;!important: ;margin-block-end: 0.5rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 26px;line-height: 36px;font-weight: 400;letter-spacing: 0.1px;font-family: 'Lato';color: #001544;"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘None of the disputes</strong> between the U.S. and China, even the South China Sea, has as much explosive potential as contemplated changes in America's relations with Taiwan,’ writes Jerry Cohen.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Among those contemplated changes </strong>is abandoning the decades-old U.S. policy of not confirming that it would defend Taiwan against an unprovoked attack by China – the policy of ‘strategic ambiguity.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">In other words, saying directly: </strong>‘Xi Jinping, if you attack Taiwan, we will defend the island, and you will be at war with the U.S.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">You would not be faulted </strong>for thinking this was coming from the China Hawks in the Trump administration.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">In fact,</strong> the loudest voices calling for this policy change are coming from the mainstream foreign policy community.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Just this week,</strong> Jerry Cohen, dean of China legal scholarship in the U.S., and Richard Haass, president of the Council on Foreign Relations, have both called for the U.S.’s abandoning ‘strategic ambiguity.’ [Today’s issue is bookended by their essays.]</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Jerry Cohen</strong> writes: ‘Most important, the United States should abandon the policy of "strategic ambiguity" that fosters uncertainty about whether it will come to the defense of Taiwan, since this ambiguity increases the risk that conflict might result from mistaken assumptions on Beijing's part.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">And Richard Haass</strong> argues: ‘Indeed, such a change should strengthen U.S.-Chinese relations in the long term by improving deterrence and reducing the chances of war in the Taiwan Strait, the likeliest site for a clash between the United States and China.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">This assumes,</strong> of course, that Xi Jinping himself sees this as a deterrent.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">And not a signal</strong> to attack Taiwan immediately, catching the U.S. flatfooted before it could act on its new commitment.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">It is one thing </strong>to help Taiwan repel a Chinese attack.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">It is another</strong> to recapture Taiwan from Chinese occupation.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">And, based on U.S. wargames, </strong>there is a real question about whether the U.S. could prevail in either case.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Add to that the uncertainty</strong> about President’s Trump acting on U.S. commitments to its allies, and Xi could decide act if the policy changes.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">In the West,</strong> we tell ourselves that Xi Jinping would never damage China’s economy and political standing just to reunite Taiwan with China.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">And we</strong> are wrong.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Since the KMT retreat</strong> to Taiwan in 1949 in the wake of a communist victory, the Chinese Communist Party has had no higher objective.</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Unlike</strong> his more patient predecessors, Xi Jinping sees the window for achieving this closing.</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Nothing closes </strong>that window faster than the S. abandoning ‘strategic ambiguity’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">All that said,</strong> I agree (and have argued here) that the U.S. should abandon ‘strategic ambiguity.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">My concern</strong> is that we might do this, as the U.S. has done disasterously throughout its history, without taking the other guy’s point of view into consideration.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><br></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">In this issue:&nbsp;</strong>&nbsp;&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">1. 'Taiwan Needs Unambiguous American Support'</strong></span></p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">A surprising (to me) statement </strong>by a leader of the foreign policy establishment on a long-needed policy change.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><br></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">2. 'TikTok Deal Is Complicated by New Rules From China Over Tech Exports'</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In a bureaucratic two-step,</strong> China on Friday&nbsp;<a href="http://www.mofcom.gov.cn/article/b/xxfb/202008/20200802996641.shtml" rel="nofollow">updated its export control rules</a> to cover a variety of technologies it deemed sensitive, including technology that sounded much like TikTok’s personalized recommendation engine.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Scott Kennedy</strong> of CSIS says:</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">“At a minimum</strong> they’re flexing their muscles and saying, ‘We get a say in this and we’re not going to be bystanders.”</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">“It could be an effort</strong> to outright block the sale, or just raise the price, or attach conditions to it to give China leverage down the road.”</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘He added</strong> that it showed a rare bit of consensus between China and the United States that both agreed ByteDance was a national security priority.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">In any case,</strong> this is one of the rare times when China has pushed back, however indirectly, against a U.S. move against it.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">3. 'Huawei: Has Trump Really Won?'</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Commerce Department’s actions</strong> are likely the death blow against Huawei.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Even its most secure markets </strong>will switch to new suppliers to prevent the inevitable disruption that will occur when its two-year stockpile of U.S.-made chips dries out.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In the context of the U.S.-China tech war,</strong> the dashing of Huawei’s global aspirations is but one battle, and the United States should expect a&nbsp;<a href="https://www.cnn.ph/business/2020/8/18/united-states-huawei-sanctions.html" rel="nofollow">punitive retaliation</a>&nbsp;against its technology companies by the Chinese government.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">4. 'The Big China Disaster That You're Missing'</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">The disaster</strong> here is flooding in China, and here is an impact that should be factored in analyses:</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Consider</strong> this&nbsp;knock-on&nbsp;effect.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In theory,</strong> banks will&nbsp;<a href="https://in.reuters.com/article/china-banking-regulation/china-to-offer-more-financial-support-for-flood-hit-areas-idINKCN24J0OJ" rel="nofollow">likely take losses&nbsp;</a>because of natural disasters;&nbsp;their clients will pass them along to insurers.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The last thing</strong> China’s burdened, state-run financial institutions need are continued&nbsp;natural disasters.’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;">&nbsp;&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><span style="color: #d0021b"><strong style="font-weight: bold">5. 'Don't Rush to Fully Normalize Relations With Taiwan'&nbsp;</strong></span></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Jerry Cohen</strong> writes:</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Given the anti-PRC atmosphere</strong> in Washington, there is even interest in possible establishment of formal diplomatic relations between the United States and Taiwan.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Such "recognition"</strong> of the island's government, whether under its current name—the Republic of China (Taiwan)—or as a newly-branded Republic of Taiwan, would very likely trigger a long-threatened military reaction from Beijing that could envelop the PRC, the United States and Taiwan in a devastating nuclear war.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">He also provides</strong> an excellent briefing on the events in China-Taiwan-U.S. relations that brought us to this point.&nbsp;</p><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><strong style="font-weight: bold">Go deeper into these issues - Browse the posts below.</strong></h2><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><strong style="font-weight: bold">To read the original article, click the title.</strong></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Let me know what you think. </strong>And please forward the <strong style="font-weight: bold">China Macro Reporter</strong> to your friends and colleagues.</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">All the best,</strong></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">Malcolm</strong></p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">1. To Avoid War with China, Pledge to Defend Taiwan</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/7dn7NQ?track_p_id=5kDZqF4xh8SE_UgclOV3od%40" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/2P2LxiV-sg54VayqL9X2F0i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7dn7NQ?track_p_id=2b44xh8SE_146snLwm2SIGa" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">'Taiwan Needs Unambiguous American Support'</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/7dn7NQ?track_p_id=924J%4042S%40B4xh8SE_yfvef1"><img width="100%" src="https://img.scoop.it/2M8PKz7d8YJmIbjNB7AQdjl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Foreign Affairs</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Richard Haass</strong> | President, Council on Foreign Relations</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘The time has come for the United States to introduce a policy of strategic clarity: one that makes explicit that the United States would respond to any Chinese use of force against Taiwan.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘For four decades,</strong> successive Republican and Democratic administrations resisted answering the question of whether the United States would come to Taiwan’s defense if China mounted an armed attack.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Washington’s deliberate ambiguity</strong> on the matter helped dissuade China from attempting to “reunify” Taiwan with the mainland, as it could not be sure that the United States would remain on the sidelines.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘At the same time,</strong> the policy discouraged Taiwan from declaring independence—a step that would have precipitated a cross-strait crisis—because its leaders could not be sure of unequivocal U.S. support.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The policy</strong> known as strategic ambiguity has, however, run its course.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Ambiguity </strong>is unlikely to deter an increasingly assertive China with growing military capabilities.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The United States</strong> should adopt a position of strategic clarity, making explicit that it would respond to any Chinese use of force against Taiwan.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Such a policy</strong> would lower the chances of Chinese miscalculation, which is the likeliest catalyst for war in the Taiwan Strait.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘If the United States</strong> maintains this policy of ambiguity it will not keep the peace in the Taiwan Strait for the next four decades.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Too many of the variables</strong> that made it a wise course have fundamentally shifted.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘China now has the capability</strong> to threaten U.S. interests and Taiwan’s future.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘China’s defense spending </strong>is 15 times that of Taiwan’s, and much of it has been devoted to a Taiwan contingency.&nbsp;<a href="https://media.defense.gov/2019/May/02/2002127082/-1/-1/1/2019_CHINA_MILITARY_POWER_REPORT.pdf" rel="nofollow">Chinese planning&nbsp;</a>has focused on impeding the United States from intervening successfully on Taiwan’s behalf.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Gone are the days</strong> when Taiwan’s dollars went further than China’s, as China now fields equipment on a par with anything the United States makes available to Taiwan.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Whether the United States&nbsp;</strong><a href="https://www.rand.org/pubs/research_reports/RR392.html" rel="nofollow">could prevail in a Taiwan conflict</a>&nbsp;is no longer certain, and the trend lines continue to move in China’s favor.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Unless the United States</strong> devotes significant resources to preparing for a conflict in the Taiwan Strait, it stands little chance of preventing a fait accompli.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Waiting for China</strong> to make a move on Taiwan before deciding whether to intervene is a recipe for disaster.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘One thing</strong> has not changed over these four decades: an imposed Chinese takeover of Taiwan remains antithetical to U.S. interests.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘If the United States</strong> fails to respond to such a Chinese use of force, regional U.S. allies, such as Japan and South Korea, will conclude that the United States cannot be relied upon and that it is pulling back from the region.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘These Asian allies</strong> would then either accommodate China, leading to the dissolution of U.S. alliances and the crumbling of the balance of power, or they would seek nuclear weapons in a bid to become strategically self-reliant.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Either scenario</strong> would greatly increase the chance of war in a region that is central to the world’s economy and home to most of its people.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Meanwhile,</strong> the 24 million people of Taiwan would see their democracy and freedoms crushed. China would subsume the island’s vibrant, high-tech economy.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘And China’s military</strong> would no longer be bottled up within the first island chain: its navy would instead have the ability to project Chinese power throughout the western Pacific.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘China’s aim to gain control of Taiwan,</strong> through force if necessary, needs to be taken seriously.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘There is&nbsp;</strong><a href="https://www.wsj.com/articles/beyond-hong-kong-an-emboldened-xi-jinping-pushes-the-boundaries-11590774190" rel="nofollow"><strong style="font-weight: bold">speculation&nbsp;</strong></a>that Xi will marry his ambitions with the new means at his disposal to realize his “China Dream” and force “reunification” with Taiwan, potentially as soon as 2021.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘No one should dismiss</strong> the possibility that&nbsp;<a href="https://www.foreignaffairs.com/articles/east-asia/2020-07-08/taiwan-next-hong-kong" rel="nofollow">Taiwan could be the next Hong Kong</a>.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Washington</strong> can make this change in a manner that is consistent with its one-China policy and that minimizes the risk to U.S.-Chinese relations.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Indeed,</strong> such a change should strengthen U.S.-Chinese relations in the long term by improving deterrence and reducing the chances of war in the Taiwan Strait, the likeliest site for a clash between the United States and China.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">2. The TikTok Issue Just Got More Complicated</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/6AxTkm?track_p_id=4r32U8hWjtO_XNWxUz3JWCd" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/3QKIJ28TXRxlm_PNLipujEi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6AxTkm?track_p_id=5he%40pD8hWjtO_MNl5KG2TWl" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">'TikTok Deal Is Complicated by New Rules From China Over Tech Exports'</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto"><tbody><tr><td><img width="100%" src="https://cdn.prod.website-files.com/5c864c33af62620dca1373ac/5f5005cc799339cbb6abe29e_nyt-tiktok-render-v1-720h.gif" style="display:block; width:100%; border:none; height:auto"></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">The New York Times</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Paul Mozur </strong>| The New York Times</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘The moves from Beijing ensnare TikTok and potential American buyers including Microsoft and Oracle, wedging them in the middle of a tussle between the United States and China over the future of global technology.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘As the sale of TikTok</strong> enters its final stages, Beijing is saying it wants the last word.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In a bureaucratic two-step,</strong> China on Friday&nbsp;<a href="http://www.mofcom.gov.cn/article/b/xxfb/202008/20200802996641.shtml" rel="nofollow">updated its export control rules</a> to cover a variety of technologies it deemed sensitive, including technology that sounded much like TikTok’s personalized recommendation engine.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Then on Saturday,</strong> the country’s&nbsp;<a href="http://www.xinhuanet.com/politics/2020-08/29/c_1126428865.htm" rel="nofollow">official Xinhua news agency</a>&nbsp;published commentary by a professor who said the new rule would mean that the video app’s parent, the Chinese internet giant ByteDance, might need a license to sell its technology to an American suitor.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘It is exceedingly rare</strong> for a professor to make comments about a specific, in-progress deal, and that it signaled that ByteDance would now have to consult the Chinese authorities about the controls said Scott Kennedy of the Center for Strategic and International Studies.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Beijing’s last-minute assertion of authority </strong>is an unexpected wrinkle for a deal as&nbsp;<a href="https://www.nytimes.com/2020/08/27/technology/walmart-tiktok-deal.html" rel="nofollow">two groups race</a>&nbsp;to buy TikTok’s U.S. operations before the Trump administration bans the app.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Taken together,</strong> the rule change and the commentary in official media signaled China’s intention to dictate terms over a potential deal, though experts said it remained unclear whether the Chinese government would go as far as to sink it.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The moves from Beijing</strong> ensnare TikTok and potential American buyers including Microsoft and Oracle, wedging them in the middle of a tussle between the United States and China over the future of global technology.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Beijing’s displeasure alone </strong>could scare off TikTok’s suitors, many of whom have operations in China.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘TikTok </strong>is the most globally successful app ever produced by a Chinese company, and the conflict over its fate could&nbsp;<a href="https://www.nytimes.com/2020/08/17/technology/trump-tiktok-wechat-ban.html" rel="nofollow">further fracture the internet&nbsp;</a>and plunge the world’s two largest economies into a deeper standoff.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘ “At a minimum</strong> they’re flexing their muscles and saying, ‘We get a say in this and we’re not going to be bystanders,” said Scott Kennedy.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘ “It could be an effort</strong> to outright block the sale, or just raise the price, or attach conditions to it to give China leverage down the road,” he said.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘He added</strong> that it showed a rare bit of consensus between China and the United States that both agreed ByteDance was a national security priority.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘If Beijing blocks the sale of TikTok,</strong> it would effectively be calling the Trump administration’s bluff, forcing the U.S. government to actually go through with restricting the app and potentially incurring the wrath of its&nbsp;<a href="https://www.nytimes.com/2020/07/10/style/tiktok-ban-us-users-influencers-taylor-lorenz.html" rel="nofollow">legions of influencers and fans</a>.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Ordering companies</strong> like Apple and Google to take down TikTok in app stores globally could also prompt further anger against the Trump administration and even lawsuits.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Beijing’s move</strong> also could risk empowering the more hawkish members of Mr. Trump’s team and igniting an even more forceful response from the administration, which has said that it could take more measures to block tech companies like Alibaba and Baidu from&nbsp;<a href="https://www.state.gov/announcing-the-expansion-of-the-clean-network-to-safeguard-americas-assets/" rel="nofollow">doing business in the United States</a>.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">3. Huawei: Has Trump Really Won?</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/6T7o4u?track_p_id=04ngV4Q_A55TbJwirHN53Nl" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/2CcBybgkmUCTZbLI5Tbnzki__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6T7o4u?track_p_id=dI3jDSqEb1c1z%404ngV4Q_SK" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">'Closing the Book on Huawei’s Global Aspirations'</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Foreign Affairs</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Connor Fairman</strong>&nbsp;| Council on Foreign Relations</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘The Commerce Department’s actions are likely the death blow against Huawei.’</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘On August 17,</strong> the U.S. Department of Commerce&nbsp;<a href="https://www.commerce.gov/news/press-releases/2020/08/commerce-department-further-restricts-huawei-access-us-technology-and" rel="nofollow">announced</a>&nbsp;that non-U.S. companies were prohibited from selling items produced with U.S. technology to Huawei.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The decision</strong> follows restrictions&nbsp;<a href="https://www.reuters.com/article/us-usa-huawei-tech-exclusive/u-s-moves-to-cut-huawei-off-from-global-chip-suppliers-as-china-eyes-retaliation-idUSKBN22R1KC" rel="nofollow">imposed</a> by the Commerce Department in May against companies using U.S. technology to manufacture Huawei-designed chips, which left open the possibility for the company to purchase widely available chips designed by other companies.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘This latest effort</strong> has been cited by some as the “<a href="https://www.cnn.ph/business/2020/8/18/united-states-huawei-sanctions.html" rel="nofollow">nail in the coffin</a>” for the company, as U.S. technology is&nbsp;<a href="https://asia.nikkei.com/Spotlight/Huawei-crackdown/How-a-handful-of-US-companies-can-cripple-Huawei-s-supply-chain" rel="nofollow">integral to</a> multiple stages of the semiconductor supply chain, including design, manufacturing, and testing.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Although Huawei </strong>has built up an estimated&nbsp;<a href="https://asia.nikkei.com/Spotlight/Huawei-crackdown/Huawei-builds-up-2-year-reserve-of-most-important-US-chips" rel="nofollow">two-year reserve</a>&nbsp;of U.S. chips needed for its 5G base stations and cloud computing business, it lacks a similar stockpile of components that go into their smartphones, including memory chips, camera lenses, and 5G processor chips.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Less than a month ago,</strong> it appeared that the company’s access to these items was unfettered, as it&nbsp;<a href="https://www.wsj.com/articles/qualcomm-inks-licensing-deal-with-huawei-despite-u-s-china-tensions-11596059709" rel="nofollow">inked an</a> agreement to continue licensing patented technology for its mobile phones from San Diego-based Qualcomm in late July.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Now,</strong> the language of the Commerce Department’s announcement suggests that even this deal, which would have supplied Huawei with Qualcomm technology used by most mobile phones, will be negated.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Analysts predict</strong> that if Huawei runs out of the components that go into their handsets, shipments could drop by as much as&nbsp;<a href="https://asia.nikkei.com/Spotlight/Huawei-crackdown/Huawei-in-survival-mode-as-suppliers-race-to-beat-US-deadline" rel="nofollow">75 percent next</a> year.’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Commerce Department’s actions</strong> follow a multi-year U.S. campaign to exclude Huawei from several markets that it hoped to supply 5G equipment to, including those of the&nbsp;<a href="https://www.reuters.com/article/us-canada-huawei-analysis/canada-has-effectively-moved-to-block-chinas-huawei-from-5g-but-cant-say-so-idUSKBN25L26S" rel="nofollow">Five Eyes</a>,&nbsp;<a href="https://www.ft.com/content/55642551-f6e8-4f9d-b5ba-a12d2fc26ef9" rel="nofollow">India</a>, and several countries in the&nbsp;<a href="https://www.reuters.com/article/us-france-huawei-5g-security-exclusive/exclusive-french-limits-on-huawei-5g-equipment-amount-to-de-facto-ban-by-2028-idUSKCN24N26R" rel="nofollow">European Union</a>.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘These are some of the largest markets</strong> outside of China and will result in massive revenue loss for the company.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘While Huawei remains</strong> an important telecommunications gear supplier in Southeast Asia, Latin America, and Africa, many countries in these regions will likely finally forgo partnering with the company for 5G, fearful that it will not be able to supply and maintain gear for their networks under the new restrictions.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘For years,</strong> the Chinese government has&nbsp;<a href="https://www.scmp.com/tech/policy/article/3096131/china-unveils-major-tax-incentive-policy-encourage-innovation-domestic" rel="nofollow">attempted to boost</a>&nbsp;its domestic semiconductor industry, with mixed success.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Despite tax incentives</strong> and multiple rounds of funding by the China National Integrated Circuit Industry Investment Fund since 2014, Chinese chipmakers are&nbsp;<a href="https://www.scmp.com/tech/big-tech/article/3090433/can-chinas-fledging-semiconductor-industry-rescue-huawei-tighter-us" rel="nofollow">still unable</a> to produce the chips that power high-end smartphones and 5G equipment.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Estimates for how long</strong> it would take them to catch up to foreign counterparts range from three years to “<a href="http://scmp.com/tech/big-tech/article/3090433/can-chinas-fledging-semiconductor-industry-rescue-huawei-tighter-us" rel="nofollow">generations</a>.” ’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Huawei</strong> cannot afford to wait that long, and it is quickly running out of options.'</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Commerce Department’s actions</strong> are likely the death blow against Huawei.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">Even its most secure markets </strong>will switch to new suppliers to prevent the inevitable disruption that will occur when its two-year stockpile of U.S.-made chips dries out.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In the context of the U.S.-China tech war,</strong> the dashing of Huawei’s global aspirations is but one battle, and the United States should expect a&nbsp;<a href="https://www.cnn.ph/business/2020/8/18/united-states-huawei-sanctions.html" rel="nofollow">punitive retaliation</a>&nbsp;against its technology companies by the Chinese government.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">4. Flood Damage to the Chinese Economy</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/6lI8P2?track_p_id=bYaeXcJnj6WN7YyavG_EZee" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/Q7K3LvBpUHwYzkoXdXm2WUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6lI8P2?track_p_id=53fWz17YyavG_NLs4TfozcC" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">'The Big China Disaster That You're Missing'</a></td></tr></tbody></table></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/Uh8dR2cV1zSbQz16_L9whzl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e" 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%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Bloomberg</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Anjani Trivedi </strong>| Bloomberg</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">'The last thing China’s burdened, state-run financial institutions need are continued&nbsp;natural disasters.’&nbsp;</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Three Gorges Dam</strong> on the mighty Yangtze, the world’s largest dam is under pressure in the&nbsp;massive flooding that’s wiping away billions of dollars of value in China.’&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The&nbsp;predicament</strong> symbolizes&nbsp;a looming crisis for Beijing.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Climate change</strong> is bringing more frequent and intense deluges that threaten&nbsp;the economic heartland, and infrastructure defenses installed with&nbsp;the disasters of previous eras in mind&nbsp;can’t keep up.’&nbsp;</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘There’s very little time</strong> to prepare for what’s coming.’&nbsp;</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The problem</strong> isn’t that China lacks water management projects.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘It has built</strong> hundreds of thousands of levees, dikes, reservoirs&nbsp;and dams&nbsp;on its seven major river systems.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But many are&nbsp;struggling</strong> to cope&nbsp;with months of rain-fed flooding that has&nbsp;ravaged vast swathes of industrial and agricultural land and engulfed millions of homes.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Flood policy</strong> hasn’t been made the a priority it should be given the high stakes.’&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The Yangtze River Economic Belt</strong> is home to more than&nbsp;40% of China’s population (about 600 million people) and&nbsp;accounts for&nbsp;almost 50% of export value and&nbsp;45% of gross domestic product,&nbsp;<a href="https://www.chinawaterrisk.org/wp-content/uploads/2019/09/CWR-Yangtze-Water-Risks-Hotspots-Growth.pdf" rel="nofollow">according to China Water Risk</a>.’&nbsp;</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘On its own,</strong> the region could be the third-largest economy in the world.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘More severe disasters</strong> are anticipated.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Climate change </strong>is increasing&nbsp;the risks of extreme rainfall events, making it “even more likely&nbsp;that dams like the Three Gorges will be unable to prevent the worst flooding from occurring in the future,”&nbsp;hydroclimatologist Peter Gleick, a member of the U.S. National Academy of Sciences, told the&nbsp;<a href="https://www.scmp.com/news/china/society/article/3093713/global-warming-and-illegal-land-reclamation-add-severe-floods" rel="nofollow">South China Morning Post</a>.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Consider</strong> this&nbsp;knock-on&nbsp;effect.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In theory,</strong> banks will&nbsp;<a href="https://in.reuters.com/article/china-banking-regulation/china-to-offer-more-financial-support-for-flood-hit-areas-idINKCN24J0OJ" rel="nofollow">likely take losses&nbsp;</a>because of natural disasters;&nbsp;their clients will pass them along to insurers.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In China,</strong>&nbsp;<a href="https://insuranceasianews.com/chinas-regulator-urges-insurers-support-for-flood-hit-regions/" rel="nofollow">insurance companies&nbsp;aren’t well-prepared</a>; statistics remain sparse and risk-modelling around flood&nbsp;events has become more difficult.’&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘In 2016,</strong> China’s non-life insurers were hit with losses of more than&nbsp;4 billion yuan related to floods and storms between June and August.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘This time,</strong>&nbsp;Fitch Ratings Inc. analysts expect claims “to continue to surge as the rainy season is not over yet in certain parts of China.” ’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘They noted</strong> on July 15 that insurers in Hubei, Guangxi and Jiangxi provinces had reported aggregate incurred losses of more than 500 million yuan as of a week earlier,&nbsp;including claims from motor, agricultural and property insurance.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The last thing</strong> China’s burdened, state-run financial institutions need are continued&nbsp;natural disasters.’&nbsp;</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div></div><div></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="display:block; padding:10px; background-color:#c80000; text-align:center; font-family: 'Lato'; font-size: 1.5rem; line-height:1.35em; color:#ffffff; font-weight: bold;">5. Jerry Cohen on U.S.-China-Taiwan Relations</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/7vxRhY?track_p_id=daBkEFNqKE1uN27H2Z8o_ve" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/d9Ws8fLPt75oPx410BA2Kki__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7vxRhY?track_p_id=1F7H2Z8o_mZzihBwPcoZnZx" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">'Don't Rush to Fully Normalize Relations With Taiwan'&nbsp;</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td><a href="http://sco.lt/7vxRhY?track_p_id=07H2Z8o_zeaxZ%40qa2hgaEA5"><img width="100%" src="https://img.scoop.it/hVeVLf0GGRRa1AdAqPdx1Dl72eJkfbmt4t8yenImKBWpnB4YU4myT9-8UqDpoJyK" style="display:block; width:100%; border:none; height:auto"></a></td></tr><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Newsweek</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Jerry Cohen</strong> | Council of Foreign Relations</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘Most important, the United States should abandon the policy of "strategic ambiguity" that fosters uncertainty about whether it will come to the defense of Taiwan.'</strong></em></h2><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘None of the disputes</strong> between the U.S. and China, even the South China Sea, has as much explosive potential as contemplated changes in America's relations with Taiwan.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Given the anti-PRC atmosphere</strong> in Washington, there is even interest in possible establishment of formal diplomatic relations between the United States and Taiwan.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Such "recognition"</strong> of the island's government, whether under its current name—the Republic of China (Taiwan)—or as a newly-branded Republic of Taiwan, would very likely trigger a long-threatened military reaction from Beijing that could envelop the PRC, the United States and Taiwan in a devastating nuclear war.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘It would be much wiser</strong> to continue the policy of gradually demonstrating increased support for Taiwan's current status.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Much more can be done</strong> by Washington and other concerned governments to build on existing "unofficial" arrangements for political, economic, educational and cultural cooperation with Taiwan, as well as for expanding its opportunities to contribute to many functional international activities.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘New forms of imaginative links</strong> with Taiwan must be developed.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Of course,</strong> pressure for Taiwanese participation in existing public international organizations should be increased, as should efforts to help it retain its remaining formal diplomatic relationships.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘But this will require the U.S.</strong> to return to vigorous alliance diplomacy and to institutions and arrangements that it has recently abandoned, such as the World Health Organization and the Trans-Pacific Partnership.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Otherwise,</strong> Beijing's growing role as gatekeeper will continue to frustrate global governance by excluding Taiwan, as WHO experience illustrates.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Most important,</strong> the United States should abandon the policy of "strategic ambiguity" that fosters uncertainty about whether it will come to the defense of Taiwan, since this ambiguity increases the risk that conflict might result from mistaken assumptions on Beijing's part.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The U.S.</strong> can anchor its relationship with Taiwan in long-standing policies, while articulating a clear but moderate statement of its determination to defend the island against unprovoked attack.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘This would serve</strong> as a strong reminder to the PRC that public international law no longer permits nations to use force to settle territorial disputes.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Such an assurance</strong> will do much more to protect the 23 million Taiwanese than would formal U.S. diplomatic recognition.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td style="height:2rem; font-size:0;">&nbsp;</td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="max-width:600px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block; padding-top:10px;"><a href="http://sco.lt/8E7m1g?track_p_id=1w83INFm_sHVNZbjJePqiY4" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/d9Ws8fLPt75oPx410BA2Kki__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; 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); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/8E7m1g?track_p_id=dysVRls5WMNGrC83INFm_ZG" style="color:#001544; font-size:30px; line-height:40px; font-weight:700; font-family: 'Lato'; text-decoration: none; border-bottom:none;" target="_blank">China, the U.S., &amp; Taiwan: The Backstory</a></td></tr></tbody></table></td></tr></tbody></table></div><div><table align="center" border="0" cellpadding="0" cellspacing="0" width="100%" style="padding-bottom:10px; margin:0 auto; background:#fff;"><tbody><tr><td style="padding:0 3.5%; font-family: 'Noto Serif';"><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Newsweek</strong></h3><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><strong style="font-weight: bold">Jerome Cohen</strong> | Council on Foreign Relations</h3><h2 style="text-align: center;display: block;margin-block-start: 2rem;!important: ;margin-block-end: 2rem;font-size: 18px;line-height: 30px;font-weight: normal;font-family: 'Noto Serif';color: #c80000;padding: 3.5%;background-color: #f5f5f5;"><em style="font-style: italic"><strong style="font-weight: bold">‘Beijing has long maintained that any formal declaration of independence by Taiwan would be intolerable and trigger possible nuclear war.’</strong></em></h2><h3 style="display: block;margin-top: 0em;!important: ;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-size: 14px;line-height: 21px;font-weight: normal;font-family: 'Lato';color: #5d5d5f;"><em style="font-style: italic"><strong style="font-weight: bold">More </strong></em>from Jerry Cohen's terrific essay.</h3><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘To understand why Taiwan</strong> is a flashpoint requires recalling recent history.’</p><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘When in 1949,</strong> Chiang Kai-shek's Nationalist forces lost the Chinese Civil War on the mainland to Mao Zedong's Communists, Chiang's central government, called the Republic of China (ROC), fled to Taiwan.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The ROC</strong> had reincorporated Taiwan into China four years earlier, after the Allied Powers, victorious in World War II, authorized Chiang's military to occupy the island, which had been a Japanese colony for half a century.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘China had been forced</strong> to transfer sovereignty over Taiwan to Japan in the 1895 peace treaty that ended the First Sino-Japanese War.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Following Japan's 1945 defeat in World War II,</strong> Tokyo surrendered sovereignty over the island but, because of the ongoing Chinese Civil War, the post-World War II treaty arrangements never specified whether that sovereignty was transferred to the ROC, then occupying the island, or to the PRC, which established its national government on October 1, 1949, or to some other status.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Taiwan's legal status</strong> was thus in doubt as Mao's PRC forces were preparing an assault that might overcome Chiang's control of the island and terminate the civil war.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The highly debated question</strong> in Washington was whether the United States, which had long equivocated about how to respond to China's civil war, would intervene in the Taiwan Strait to defend the ROC.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In January 1950,</strong> President Harry S. Truman and Secretary of State Dean Acheson announced, amid great controversy, that the U.S. would not intervene.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Despite the fact that</strong> no peace treaty had transferred Taiwan's sovereignty to either of the still-contending Chinese governments, Washington maintained that Taiwan had, in fact, been restored to China when Chiang's forces were placed in control of the island.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘That, stated Secretary Acheson,</strong> was done in accord with the allies' wartime commitments, and "nobody raised any lawyer's doubts" about it.’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The U.S.</strong> thus concluded that, since Taiwan should be deemed Chinese territory, Washington should not intervene, since intervention would subject it to international condemnation for violating China's territorial integrity.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Yet less than six months later,</strong> when North Korea invaded South Korea, the U.S. immediately reversed its position.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Because it perceived the North Korean attack </strong>to be not only the initiation of civil war in Korea, but also an all-out attack by the communist bloc that threatened Taiwan as well as French-controlled Indochina, President Truman announced that the legal status of Taiwan, referred to by its Anglo-Portuguese name "Formosa," had actually never been determined and that it would await "restoration of security in the Pacific, a peace settlement with Japan or consideration by the United Nations"; in the interim, America's Seventh Fleet would defend Taiwan.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘That stunning reversal</strong> remained the official U.S. position for over 20 years.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘It was the principal obstacle</strong> to establishment of diplomatic relations between the U.S. and the PRC, even after the ROC was replaced by the PRC as the Chinese representative at the UN.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Chairman Mao</strong> insisted that if the U.S. wanted to normalize bilateral relations, the U.S. would not only have to give up its diplomatic relationship with the ROC, but also formally concede that Taiwan is Chinese territory—a position that Chiang Kai-shek himself shared.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘That was the challenge</strong> confronting President Nixon when he made his world-famous visit to China in February 1972.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘There, in the Shanghai Communique,</strong> he waded into the problematic waters of whether Taiwan is part of China.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The U.S.</strong> not only "acknowledged" the PRC claim that all Chinese on either side of the Strait believe that Taiwan is part of China, but also went on to state that "the United States does not challenge that position." ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Nevertheless,</strong> when negotiating normalization with Beijing in 1978, President Jimmy Carter, while agreeing to terminate the U.S.-ROC defense treaty as well as diplomatic relations with the ROC, secured Deng Xiaoping's temporary willingness to tolerate continuing American arms sales to Taiwan.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Congressional adoption</strong> of the Taiwan Relations Act (TRA), several months after normalization, further documented abiding American concerns for Taiwan's defense against possible PRC resort to force.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The TRA</strong> even presented an ambiguous possibility that the U.S. might itself come to Taiwan's defense, if necessary.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The premise of the U.S. position,</strong> expressed in the 1979 normalization joint communique and two subsequent ones with the PRC, is that the U.S. will accept a peaceful resolution of the Taiwan Strait dispute that is freely consented to by both sides.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In 1979,</strong> both sides of the Strait were governed by harsh military dictatorships.'</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The American hope</strong> was that, over time, each government might evolve in democratic fashion and eventually find a cross-Strait modus vivendi.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Since 1987,</strong> Taiwan has gradually and peacefully achieved the democratic, rule of law, human rights-protecting society for which it is now widely praised.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘The PRC,</strong> by contrast, has developed into an extraordinary economic powerhouse with a military that increasingly threatens Taiwan and a political system that, under Xi Jinping, has become the most successfully repressive regime in Chinese history.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Nevertheless,</strong> despite the growth of a distinctive Taiwanese identity that has led most islanders to fear reunification with the mainland, the ROC, under the Nationalist government of President Ma Ying-jeou, from 2008 to 2016 made over 20 "semi-official" agreements with the PRC that opened up broad cross-Strait cooperation.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘That remarkable feat</strong> was based on the shared belief of the Nationalist government and the PRC that Taiwan is part of China, although many Taiwanese doubted the wisdom of this development and there was never any agreement on whether this notional "China" should be represented by the ROC or the PRC.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘In 2016,</strong> this limited and abstract "one China consensus," usually referred to as "the 1992 consensus," dissolved with the island's election of President Tsai Ing-wen of the Democratic Progressive Party, which had never accepted "the 1992 consensus." ’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘President Tsai,</strong> a moderate leader of a party long associated with the goal of establishing independent Taiwanese statehood, nevertheless made clear from the outset her desire to continue Taiwan's cooperation with the PRC, convinced, as she put it after her resounding 2020 re-election, that "both sides have a duty to find a way to exist over the long term." ’</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Yet she has steadfastly refused</strong> to endorse "the 1992 consensus," because to do so would deprive Taiwan of the future option to deny that the island is Chinese territory, to declare its formal independence from China and to establish diplomatic relations with other countries on that basis.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘Beijing has long maintained</strong> that any formal declaration of independence by Taiwan would be intolerable and trigger possible nuclear war.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘President Tsai,</strong> a careful leader who has shown no interest in exercising what may justifiably be called the nuclear option, has countered by claiming that no formal declaration is necessary since Taiwan has long enjoyed de facto independence.'&nbsp;</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'Xi Jinping's reaction</strong> has been to cease many aspects of the cross-Strait cooperation and contact attained under President Ma, and to mobilize ever-greater military, political, diplomatic, economic and psychological pressures on the Tsai government in the hope of coercing it to belatedly embrace the "one China consensus." ’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘The Trump administration,</strong> reflecting its inconsistent efforts to forge an overall policy toward the PRC, for most of its almost four years paid relatively little attention to Taiwan.’</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">‘Although continuing to sell arms </strong>to the island, the administration sought to avoid offending Beijing in most of its ostensibly "unofficial" contacts with the island.'&nbsp;</li><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'But that policy</strong> has now changed as part of its recent all-out efforts to challenge the PRC, and Washington has made many new moves to demonstrate stronger support for the island’.</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"><strong style="font-weight: bold">‘It is in this context</strong> that the possibility of U.S. establishment of formal diplomatic relations with Taiwan must be discussed.'&nbsp;</p><ul style="margin-top: 0rem;!important: ;margin-bottom: 0rem;"><li style="margin-top: 1rem;!important: ;margin-bottom: 1rem;font-size: 17px;line-height: 28px;"><strong style="font-weight: bold">'Such a dramatic move,</strong> which might be thought to sustain President Trump's flagging re-election prospects, would be a leap too far and very likely lead to tragedy for all concerned.’</li></ul><p style="display: block;margin-block-start: 1rem;!important: ;margin-block-end: 1rem;margin-inline-start: 0px;margin-inline-end: 0px;font-size: 17px;line-height: 28px;font-weight: normal;font-family: 'Noto Serif';color: #001544;"></p></td></tr></tbody></table></div></td></tr></tbody></table>