NBA, Xinjiang loom over low-expectation trade talks in D.C.

Business & Technology

Chinese vice premier Liú Hè 刘鹤 arrived in Washington for talks with U.S. trade representative Robert Lighthizer and Treasury secretary Steven Mnuchin starting Thursday — then maybe Donald Trump on Friday — just as tensions between the two countries are ratcheting up 11 notches.

On Wednesday, for the first time in three days, Wall Street climbed. But as we’ve often noted here: markets are fools. This week’s news — the NBA, Xinjiang, etc. — gives us no reason to temper the pessimism we’ve maintained since Trump’s Tariff Day One.

“If you’re looking for good news, they didn’t cancel the trip,” as one analyst cited by CNBC put it. “China open to small trade deal if Trump eases tariff threats,” is the headline of Bloomberg’s low-expectation report.

Here are some of the reasons why the discussions in Washington on Thursday and Friday will be difficult:

The Xinjiang sanctions announced yesterday have opened up “a new front in the already worsening relationship between Washington and Beijing,” per the New York Times. The NYT says the restrictions are “a potentially groundbreaking use of a powerful tool that the American government typically uses against terrorists.”

With the NBA and Blizzard Entertainment in China crisis mode, many Americans are suddenly faced with the reality of censorship from Beijing affecting sports, video gaming, and any American company that does business there. American companies are asking new questions too, as they find “political hazards are getting harder to see” per the New York Times. For more on this:

NBA stands firm as CCTV cuts preseason broadcasts and brands flee

Calls to boycott technology giant Apple took off over the past weekend on social media in mainland China after news spread that the company initially rejected and then approved, an app that tracks the location of police patrols in Hong Kong. See SupChina: Some mainland Chinese call for boycott of Apple after it approves Hong Kong protest app or, in the New York Times Chinese media’s attacks on Apple and NBA help inflame nationalism:

The editorial was scathing. People’s Daily, the flagship newspaper of the Chinese Communist Party, was taking aim at Apple, accusing it of serving as an “escort” for “rioters” in Hong Kong by providing an app that allows protesters to track police movements. “Letting poisonous software have its way is a betrayal of the Chinese people’s feelings,” warned the article.

Gamers protest Blizzard censorship: “The decision to suspend Chung Ng Wai, a professional Hearthstone player in Hong Kong, for a year, while forcing him to forfeit a reported $10,000 in prize money, prompted a backlash in the United States similar to the public relations debacle the NBA has faced this week,” reports the New York Times. “Gamers posted angrily on social media and in forums, while politicians saw it as another troubling sign of China’s chilling clampdown on speech worldwide.” For example, on Reddit, a photoshop combining the PRC flag with the Blizzard logo is now one of the site’s most upvoted posts of all time.

Fitbit Inc. said it’s shifting manufacturing operations out of China for all of its health trackers and smartwatches to avoid U.S. tariffs on imports from the country, reports Bloomberg  (porous paywall).

“The Massachusetts Institute of Technology said it will review the school’s relationship with SenseTime Group Ltd., an artificial-intelligence startup that was among eight Chinese companies blacklisted by the U.S. this week over alleged human rights violations” in Xinjiang, according to Bloomberg.

“China is planning tighter visa restrictions for U.S. nationals with ties to anti-China groups, people with knowledge of the proposed curbs said, following similar U.S. restrictions on Chinese nationals, as relations between the countries sour,” reports Reuters.

Good luck to Liu He and co.!