‘Stopping the escalation of the trade war benefits China, the U.S., and the whole world,’ he says
Source: Zero Hedge
Confirming a late Friday leak from Global Times’ editor Hu Xijin…
… on Saturday, China’s Vice Premier and top trade negotiator, Liu He, spoke to a technology conference audience and for the first time adopted the position represented by the Trump administration for over a week, namely that last Friday’s “Phase 1” of the deal represented “substantial progress in many fields” and laid “an important foundation for the signing of a phased agreement.”
“Stopping the escalation of the trade war benefits China, the U.S., and the whole world. It’s what producers and consumers alike are hoping for,” he added.
For China, which has been radio silent in its interpretation of last Friday’s trade announcement, this represented the first formal admission that trade talks are, in fact, going well.
China and the U.S. reached some form of understanding in meetings last week that could end a trade war that has roiled the global economy in the previous 15 months.
President Trump has frequently touted how China will start buying $50 billion worth of U.S. agriculture products, though, we reported on Saturday morning that traders had seen no such purchases yet.
As described previously, the “phase one” deal isn’t a trade deal, it’s akin more to a “farm package.” Furthermore, “phase one” doesn’t address more significant issues such as forced technology transfers and industrial subsidies.
That said, as Bloomberg noted, Liu didn’t address specifics about the trade talks in his speech. Instead, the vice premier said China would expand investments in core technologies to ensure the economic restructuring of the economy was stable, adding that economic activity in the year ahead is “very bright.”
“We’re not worried about short-term economic volatility. We have every confidence in our ability to meet macroeconomic targets for the year,” he said.
As reported on Friday, ahead of the latest round of talks, President Trump’s top economic advisors and industry experts warned him of an economic downturn if a further escalation in the trade war is seen by 2020. As such, it is likely that a lite trade deal could be on the table next month.
But as our readers have recently learned, the trade war didn’t start the synchronized global downturn, which has been almost entirely a function of China’s clogged up credit impulse…
… so any deal – lite or otherwise – won’t result in an immediate acceleration of global growth; indeed, as some speculate, failure to observe a substantial economic rebound following a “deal” could well mark the point when central banks and governments finally throw in the towel, as they finally usher in the final lap in the global race to debase destroy fiat currencies and hyperinflate away the debt: MMT and Helicopter Money.,