Trade war, day 193: ‘I think that we are going to…do a deal with China’

Domestic News
President Donald Trump talks with reporters on the South Lawn of the White House before departing for the American Farm Bureau Federation's 100th Annual Convention in New Orleans, Monday, Jan. 14, 2019, in Washington. (AP Photo/ Evan Vucci)

Today, Trump again reiterated his optimism about reaching a trade deal with China.

Helping Lighthizer’s case to dampen Trump’s optimism is the still-unfulfilled promise of approvals for American credit card companies to take payments in Chinese currency. The Financial Times reports (paywall):

China’s central bank has refused to acknowledge applications submitted by Visa and Mastercard to process renminbi payments, despite rules in 2017 that removed formal obstacles to foreign participation in the $124tn market following a decade-long struggle…

In a typical Chinese permissions process, formal acceptance and acknowledgment — shouli [受理 shòulǐ] in Chinese — is the initial step towards approval. According to the application procedure published in 2017, the central bank must decide on applications within 90 days of acknowledgment.

FT reporter Gabriel Wildau, who broke the story, commented that this is “among the more flagrant examples of how regulatory slow-walking and informal barriers hurt foreign companies [in China].” Journalist and Lowy Institute senior fellow Richard McGregor asks if there are reasons for the delays besides simple protectionism, such as “access to Chinese data.”

At the same time, China made another goodwill gesture toward opening its financial markets, as the State Administration of Foreign Exchange announced that it would “raise the quota for the Qualified Foreign Institutional Investor (QFII) program to $300 billion from $150 billion effective immediately,” according to Caixin.

Other trade-war-related links:

Previously in SupChina’s trade war coverage:

Trade war, day 189: Chinese commerce ministry mum on details of negotiations