Good morning, today’s thread is for subscribers only. I will be in and out this morning, I have three questions I am most interested in but please chip in with whatever you want to talk about:
How much pressure might Xi Jinping be under from the economic mess inside China and the rapid deterioration of US-China relations?;
What percent fiscal deficit should China run this year to mitigate the impact from pandemic?;
In Thursday’s note I talked about “What might happen if the President decides to blow up the trade deal”:
“In many ways Trump is the ballast keeping those more hardline national security policies from moving forward, all because he has wanted to make the trade deal. If he now abandons that goal, do not be surprised to see movement around areas Beijing is going to get really upset about, like Magnitsky Act sanctions and Taiwan, as well as further efforts in the financial and technology sectors. So we would probably end with a trade war, tech war, information war, financial war and, best case in this scenario, cold war.
Is that the likely outcome? I am not going to predict that it is, but the odds of a sharp and significant increasing downward slope in the trajectory of US-China relations looks even more likely.”
What else might it look like? And what could change the trajectory?
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