Source: China Customs General Administration, Netwealth calculations
If these meetings go well, then the plan is for a follow up next week in Washington between US trade representative Lighthizer and Liu He, who also, in what was interpreted as a good sign, paid a short visit to the trade talks in Beijing this week. Assuming the direction of travel continues to be positive, then in Davos at the end of January, President Trump could meet Vice Premier Wang Qishan, who is heading up the China delegation.
Naturally, it is a case of watching what people do as well as listening to what they say. The comments, it seems, are constructive. The markets are taking positives from that. But don’t be surprised if after the next few weeks, some of the language cools, and the focus switches to the detail. The challenge often is in agreement that there needs to be measurable metrics, so both sides can monitor progress. There are many areas where one would expect there to be progress, as a favourable trade relationship is in the economic interests of both sides. But while there may be progress on trade, do not be surprised if there are other areas on tension in the future, given the domestic political timetable in the US as we approach election year in 2020 and also in view of the wider strategic and defence and security issues that will matter too. As a result, financial markets will focus on policy measures in China to stimulate domestic demand and further positive steps in alleviating trade tensions.
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