NEWS (1). "Trump Gets His Trade Deal, China Gets the Win. China has suffered short-term pain from the trade war, but it stands to gain in the long term." Short-term pain? Nope. The Chinese never risked business without a strong safety net. While Trump busied himself a-front his foes homebased, Beijing upgraded its infrastructure in anticipation of influx of foreign/US investments when a trade pact is finally signed. Also, it firmed up economic agreements with Latin/South American giants Brazil, Argentina, and Bolivia--as well as in Sub-Saharan Africa. Then there's China's BRI gaining traction in eastern Europe via Ukraine. And of course China accelerated investments in Southeast Asia, as well. "Short-term pain," what? Beijing is still within its annual target of 6 to 6.5 GDP growth rate.
NEWS (2). "Trump Signs China Trade Deal, Putting Economic Conflict on Pause. An initial pact, cooling tensions in an election year, follows months of escalating tariffs and a trade war that seemed as if it would never end." What could be the best time to sign a trade pact? This: Two major humps in MidEast trade, al-Baghdadi and Soleimani, had been taken out. Tehran needs China to stay as its #1 trade partner; Chevron expands as border issues between Kuwait and SA were fixed; Saudi Arabia, Bahrain, UAE and Egypt shook hands with Qatar. War is bad for business. Aramco goes IPO. Fact: Global economic powers closely watch Washington's political drama due to obvious reasons. Sure, not just the Chinese. Consider oil-rich Arab sheikhs like the Saudis, Qataris and Emiratis. So there you go: Trade pact signed.
NEWS: "China Trade Deal Details Protections for American Firms." News adds: "The agreement is expected to include significant concessions to protect U.S. technology and trade secrets, but its success hinges on whether China will follow through on its commitments."
Copyrights are a central issue. Washington was aware of such a bottleneck when Bill Clinton signed a trade pact with Jiang Zemin nearly 20 years ago. The most integral issue is Beijing's overprotectiveness of its own internal business per se in re foreign traders coming in. Think British East India Company's Opium Wars or the Boxer Rebellion of many generations ago. I don't think China has really changed its Great Wall mindset despite its embrace of Western capitalism.
Beijing's iron-clad protection of homebased business, though leaning on the extreme, isn't really that bad. A government has to protect its own. Meantime, Bill Clinton's globalization oversight vis a vis 2000 trade pact left America's small and medium entrepreneurs (SMEs) reeling as China pumped up its manufacturing mojo. Beijing's massive production line a.k.a. working class was kept busy as job orders/deliveries incessantly packed shipments. When demands overflowed, China spread them out overseas via lands that the giant nation bought/rented as per its "Go Global" program that "soft-started" in the 1970s and went full gear following Beijing's WTO entry in 2001. All these, as China kept its countryside factories and plants strong.
Protection of American firms homebased is a goal yet there is also the pressure of looking after US Forbes 400 within the Great Wall. The latter is the bottleneck: 1 Percent corporate gods who opted to ship jobs out. Would they care about a labor force that the new Left stereotype as nationalist/populist? Conservative voting bloc that they accuse of provoking Right-wing extremism? A media narrative that demonizes the working class as racist anti-immigrant church-going bigots? Meanwhile, what works in Beijing's socialist/Buddhist governance system doesn't necessarily apply as per America's political/cultural structure. For one, China controls its 4 state-owned banks; the US wades in and around the baton of 4 giant private banks.
I don't think the new trade pact is about China than it is about the United States. Reason why Trump prolonged the hawing and haggling, which is basically the way he rolls his economic dice. Tariff gambits here and there. Bill Clinton saw a huge, largely untapped Chinese market in 2000 as export destination while probably not anticipating that the Chinese could actually turn the table upside down, not around, via low tax/tariff, cheap raw materials, low overhead etcetera to lure US corporations in. China had massive workforce. Aside from ample prep in lands bought in Argentina and Zimbabwe, for example, Beijing hooked up with surging Asian tigers/tiger economies, notably Taiwan and South Korea, to keep deliveries checked.
By the time the mighty lo mein dragon entered WTO in 2001, it had ample prep via its "Go Global" program that was silently scouring the peripheries while America was busy fortifying external Defense mojo. Meantime, 21st century pulled in. While US companies trooped out to savor globalization and a purist environmental tact pressured carbon footprinting plants out of the glade, America's small and medium traders reeled. By the time George W sat, 9/11 happened and so global war on terror was the Oval Office priority. Defense budget soared to $720+ billion all-time high. Bailouts came, which Obama carried on in his first term and then recession hit in 2008. Small business sunk some more and the working class suffered. Unemployment peaked at 10 percent in 2009.
As economic downturn growled, Obama unleashed stimulus package, initially estimated to be $787 billion, that essentially benefitted banks and giant corporations. All these as Beijing carried on spreading out loans and investments globally. That's where we are now: How do we restrain China from its massive Belt and Road Initiative? The hawks' push for military aid and security leverage which China doesn't buy at all? Good thing about Trump, compared with EU's collective administration post 2008 downturn, the US did recover but European Union is still mired at 0.2 percent GDP growth rate. So as two humps, al-Baghdadi and Soleimani, are taken out of the Strait of Hormuz bottleneck, let's see how these two superpowers work things out. Hence, I stay positive.
