What to Expect After Trump's Visit to China Following the Quarter-trillion Dollar Business Agreements
Despite the administration’s push of a hard-edge view on foreign economic issues, President Trump marked the success of his state visit to China by personally flattering President Xi Jinping at every turn to cultivate a possible personal connection with the Chinese Leader. According to the National Public Radio , the priorities of President Trump’s visit are engaging China in confronting the nuclear threat from North Korea and pressing the Chinese government for greater free-market access. By projecting an air of deference to China, President Trump walked home with a quarter-trillion trade deal and was warmly received in China’s most prominent news outlet.
China’s plans to ease restrictions and remove caps on foreign stakes in domestic financial intermediary groups are welcomed by many U.S. companies as “a positive step forward.” Morgan Stanley and Goldman Sachs, who already own 49 percent of selected joint venture and security group in China, are committed to re-allocate their financial resources to further increase their ownership stake in selected financial services to follow and support China’s development and opening-up of its capital markets.
However, the symbolic signing of the quarter-trillion dollar trade deal that covers everything from jet engines to natural gas still faces significant challenges that require implementations of meaningful structure changes to the market. Indeed, most of the pledges can be viewed as a sign of Chinese goodwill in the form of “non-binding memorandums of understanding” instead of enforceable contracts. The future success of President Trump’s ambitious agenda of reducing U.S.’s trade deficit with China will depends on the development of a fair competitive playing field that may take years to come to fruition.
On the other hand, President Trump’s objective on uniting South-east Asian Countries to address North Korean nuclear threat may receive limited support from China. While China has severely limiting its coal imports from North Korea in the past few months, it refuses to make significant concessions to U.S.’s request for a complete black-out embargo on all key supplies from North Korea that might defuse the threat of the North Korean regime. Given the fact that President Trump did not publicly express any dissatisfaction with China’s response, it is unrealistic to expect an immediate denuclearization of North Korea.