A “secret” summit and
an economy that can’t gain traction
Xi visits Obama (and America hardly noticed)
Presidential summits are usually long on hype and short on substance. This one was short on both. President Xi Jinping’s visit to the US was timed to coincide with the Pope’s visit, which in hindsight hardly seems like a coincidence. With all the contentious issues over the last six months, like cyber espionage and the South China Sea, and with US presidential candidates stirring up anti-China sentiment, the White House likely thought that the less attention given to Xi’s visit, the better. Since the Chinese were sure to ignore the Pope and focus on Xi’s visit anyway in their domestic media, there was no reason for China to disagree. Thus did a meeting between the leaders of the world’s two largest economies receive roughly the same amount of media attention as “National Donut Day.”
As is typical with such meetings, there wasn’t much of substance to report anyway. There was a promise to play nice relative to hacking companies for intellectual property—but actions will speak louder than words on this issue over time. There was also some positive movement relative to a bilateral investment treaty, which would be good news for both sides. On the other hand, discussions relative to the South China Sea seemed to indicate that both sides will continue to “agree to disagree.” On this issue, like all others, it is what happens after the meeting, not what was discussed at the meeting, that will matter most.
In other news, it was déjà vu all over again for the economy which every months seems to be a little bit weaker. Still no reason to panic. But no reason to expect a quick rebound, either.
Below are the stories covered in our newsletter for September.
More bad news than good news on the economy
Once again most indicators suggest the economy has not bottomed out yet. The government reaffirms intent to take prudent approach to stimulus but many expect another round of rate cuts and other measures.
Is China’s economy bigger than we think?
A new study suggests that, if China followed the most recent standards relative to measuring its economy, it would actually be roughly 15% larger than the most recent estimates.
SOE’s to move toward the market
China announced details relative to planned reform of state-owned enterprises. The new steps are encouraging but not necessarily decisive.
LAW & POLITICS
Charges dropped in industrial espionage case
A Chinese professor working at Temple University had been charged with stealing technology. Based on evidence produced by the defendant’s attorney, the prosecutors have dropped the case.
American arrested for espionage
Another foreign businessperson has been detained by Chinese authorities for “espionage.” No details have been released as yet.
Cyber Espionage Sanctions Considered
The Obama Administration is considering levying sanctions against Chinese firms suspected from benefitting from cyber espionage. Given discussions held during Xi Jinping’s visit to the US, the administration is likely to delay the use of sanctions, for now.
Pope Trumps Xi (no pun intended)
Xi Jinping’s US visit was overshadowed by the simultaneous papal visit, leading many to think the timing was an intentional attempt to downplay the visit in the US. As expected, common interests were emphasized and small agreements announced, but nothing major occurred.
Protestors demand money back from “scam” exchange
China has seen a proliferation of gray market, unregulated commodities exchanges. One has defaulted on financial instruments it sold, setting off protests from angry investors. Could be the “tip of the iceberg.”