U.S.-China techno-trade war — from Wall Street to pharma

Foreign Affairs

There’s no reason to hope for a swift or tidy end to the U.S.-China techno-trade war, now in day 376 by our count, but here is a selection of the latest reporting, speculation, and scuttlebutt:

“Wall Street is the latest front for U.S. suspicions about China,” suggests Jodi Xu Klein in the South China Morning Post, noting that the U.S. Securities and Exchange Commission is leading “cries for vigilance as investors become more exposed to Chinese stocks” of companies with untransparent accounting standards.

The Philippines chooses Chinese 5G: “The country got its first taste of next-generation 5G services in late June with gear supplied by Huawei,” reports the Wall Street Journal(paywall). This month, a new carrier “backed by state-owned China Telecommunications Corp.” will start rolling out a new network “largely designed in China, to be executed by Chinese engineers in the Philippines.” The article calls the moves “a blow to the U.S.”

Related, in the New York Times: As Duterte courts China, U.S. says don’t forget your old friend (porous paywall)

China’s not desperate for a deal. That is the takeaway from two interviews with respected analysts of the Chinese economy:

  • In this video, James Kynge of the Financial Times says that “tariffs on exports are less important to China than Donald Trump thinks.”
  • “One of Wall Street’s leading authorities on Asia believes China is in no rush to cut a trade deal with the United States,” according to CNBC. “Despite China’s worst quarterly growth number in 27 years, Yale University senior fellow Stephen Roach contends its economy isn’t as bad as the latest figure implies.”

Scroll down to the BUSINESS AND TECHNOLOGY section of this email for more on China’s economy. 

Is someone on the inside profiting from Donald Trump’s erratic announcements about trade with China? Vanity Fair magazine asks: “Who knew Trump would offer a truce with Xi?”

Jimmy Lai (黎智英 Lǐ Zhìyīng), the “Hong Kong media magnate and democracy champion…thinks that President Donald Trump is wise to ‘play hardball’ with China’s ruling communists on trade because ‘that’s the only thing they understand,’” says the Wall Street Journal (paywall). “But Mr. Lai is also urging the U.S. to ‘show humility’ and allow China an opportunity to save face in striking a new deal.”

Is Chinese pharma the next target of the Trump administration’s decoupling program? An article published in several American newspapers warns of America’s over-reliance on pharmaceuticals made in China, and calls on the U.S. to consider medicine a “strategic asset.”