In my view I think the US side makes the mistake that they think they call the tune on the trade talks. As you know, Xi's foundation fo China is socialism with Chinese characteristics and his recent speeches it is clear he is unmoved to change how China will looks after its people. What is clear over the past year is that Xu has abandoned the concept of even just considering some of the benefits of liberal democracy with capitalistic characteristics

Given the way both sides approach the trade talks i don't see how they come together in an agreement that either side can find satisfaction and along term accommodation.

I think Peter Navarro on the US side is big negative to making real progress in trade talks. His attack mode on China just hardens the Chinese position to give as little as possible. He doesn't respect the Chinese sensibility and believes he doesn't need to. As the US trade 'conscience' behind he US approach and Lighthizer' anti-Chinese stance, in my view China will stall until 2020 to see if Trump will be around for another four years. They make take the increase tariffs after March 1and bear the pain which they see is a short term risk.

I go with the statistic that on the Chinese perspective that US trade only accounts for 18% of China's trade with the world and that trade only accounts for 22% of PRC's GNP. And China views the talks in that light. While China does fret on loss of access to American technology that may come out of this, in my view there are two lines of thought with Chinese trade perspective. The one that predominates that if China gets it's 5G network up and running by the end of the year, they will gain the upper hand in that area as the PRC goes towards the 6G technology of the future.

What sticks in my mind is that US gets preoccupied in playing catchup and Qualcomm and Cisco can't keep up with pace. As they must get the 5G network up and running in the US while Hwawei already has the intellectual know-how to forge ahead of US tech companies. Again if 1.44 billion people have access to 5G and excludes american tech firms from access in retaliation from Hwawei's exclusion from US strategic allies, the US has shot self in the foot.

Remember China views the long term in everything, so I can't see that other than short term trade pain China for the most part will be unmoved. It still commands market access and I don't see it giving up that advantage very much at all.

That's my two cents. Thanks.

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Liu He seems to have borrowed one of Donald Trump's ties. Wonder if he is signalling something there!

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Dick Radez January t

I wonder if your observation about President Xi's comments on being ready for battle in Point 4 is serious enough. The South China Morning Post had an article similar to the China Daily article, but the title was "Chinese President Xi Jinping gives army its first order of 2019: be ready for battle. This article was on January 5th.

Then The National Interest had a column by Gordon Chang on January 4th by Gordon Chang: Is China Gearing Up To Invade Taiwan.

And then we have a U.S. president who seems reluctant to do much to assist allies.

I wonder if Xi Jinping sees an opportunity to take military action against Taiwan without having the U.S. intervene.

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