Trump-Xi: 250bn of commercial agreements as expected

At the end of Trump‘s visit to China, we start to see further details of the commercial agreements between China and the US. As already mentioned in previous posts, China and the US appear to try to re-balance the relationship focusing on the total of the Balance of Payments, Current Account and Capital Account. On one hand, they try to reduce the US trade deficit (which would bring more money into the US if done via increasing exports to China and brings to China products that China needs) and, on the other hand, more Chinese investment into the US (which brings more money into the US, something that America needs, and also brings more investment opportunities for Chinese companies).

In a nut-shell, a nice chess game.

Chinese magazine, Caixin, just published an article that confirms the expectations we had before the trip, which I here summarize:

  • Chine commits to import from the US more agricultural products and energy
  • Xi will encourage Chinese enterprises to invest in the US.
  • Chine plans to import more high-tech products from the US (this is a bit of sore point)
  • Xi invites US companies to cooperate on One Belt One Road/Silk Road projects, that means getting contracts.

Finally, Xi declares that this is a win-win partenership and Trump affirms that – unbelievable –  China should not be blamed for the US’s high trade deficit, rather it is Obama’s fault.

Not even I would have predicted such benevolent attitude of Trump towards China. A Real Business man!

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