Xi Jinping: The Art of the Deal

China appears to be the winner of the Trump-Xi meeting at G-20, experts say

• Trump has touted his “far better than expected” meeting with Chinese dictator Xi Jinping at the G-20 summit in Japan, but experts say that Beijing appears to have gained an upper hand in the trade war.
• Trump said after his meeting with Xi that Huawei will be allowed to purchase U.S. products — suggesting a softening in Washington’s blacklist of the Chinese tech firm.

By Yen Nee Lee

China appears to be the winner in the trade war, strategist says

Donald Trump has grandiloquently touted his meeting with Chinese dictator Xi Jinping at the weekend as “far better than expected” — but trade and investment experts said Beijing appears to have gained the upper hand in the trade war.
Trump and Xi agreed at the G-20 summit in Japan to withhold from slapping additional tariffs on each other’s products as the two sides return to the negotiating table in a bid to finalize a trade agreement. 

In addition, Trump agreed to allow Huawei to purchase U.S. products and China will buy “large amounts” of American farm produce.
Washington had earlier announced a ban that restricts Huawei’s ability to do business with U.S. firms due to national security concerns. 

Trump’s softer stance on the Chinese tech giant was seen by observers as a major concession that the U.S. has granted China.
“It is looking like, so far, China is coming out as a winner from this G-20,” Francesco Filia, chief executive and chief investment officer at asset management firm Fasanara Capital, told CNBC’s “Squawk Box Europe” on Monday.
“It’s not even clear what they gave up in order to get it,” he said, noting there was a lack of details about what the two leaders agreed on at the meeting.
Filia is not the only one who has expressed skepticism over the U.S.-China trade developments.
Trump standing down on some of his threats to China was “one of the most concerning outcomes at the G-20,” said Danielle DiMartino Booth, chief executive of research firm Quill Intelligence.
“He obviously gave a lot of ground back to China,” she told CNBC’s “Squawk Box Asia” on Wednesday.

Huawei’s status
Back home, both the U.S. and China governments appeared to tread Trump’s Huawei announcement with caution. 

A statement by China’s foreign minister on the meeting between Trump and Xi didn’t mention Huawei at all, while White House economic advisor Larry Kudlow said the president didn’t intend to grant “a general amnesty” to the Chinese tech firm.
Kudlow said Huawei remained on the so-called entity list, which largely blocks it from buying U.S. products. 

He added, however, that the Commerce Department will grant more licenses to allow American companies to do business with Huawei as long as the transactions don’t threaten national security in the U.S.

The lack of clarity surrounding the president’s comments on Huawei is one reason why reaction in markets following the Trump-Xi meeting “wasn’t actually that strong,” according to Eric Robertsen, head of global macro strategy and FX research at Standard Chartered Bank.
While negative risks surrounding trade have gone away for now, there wasn’t much “meaningful or tangible” outcome from that meeting between the two leaders, Robertsen told CNBC’s “Squawk Box Asia” on Wednesday.
But Suresh Tantia, senior investment strategist in Asia Pacific at Credit Suisse, said Trump’s Huawei announcement shows that “everything can be negotiated”. 

Joshua Wong: World leaders ‘must’ raise our eroding freedoms at G-20

• Joshua Wong called on G-20 leaders to voice concerns over the Chinese territory’s waning freedoms at their summit in Japan.
• “It’s a must for world leaders to share their concern,” Wong, who rose to prominence during 2014 protests for broader democracy in Hong Kong, told CNBC.
• Huge protests this month have shaken the Asian business and finance center on increasing worries over growing mainland Chinese influence in the former British colony of 7.4 million people.

By Kelly Olsen

It’s time for world leaders to keep their eyes on Hong Kong: Joshua Wong.

Prominent Hong Kong pro-democracy activist Joshua Wong said Friday that G-20 leaders meeting this week in Japan can help protect the city’s freedoms by raising their concerns with Chinese dictator Xi Jinping.
Protests this month, some massive in scale, have shaken the Asian business and finance center on increasing worries over what many see as growing mainland Chinese influence in the former British colony of 7.4 million people.
Ahead of the Group of 20 gathering on Friday and Saturday in Osaka, Japan, Hong Kong activists have tried to use the meeting to draw attention to Hong Kong, holding rallies and taking out ads in prominent global newspapers.
“It’s a must for world leaders to share their concern,” Wong said, urging U.S. President Donald Trump and others to follow the lead of Japanese Prime Minister Shinzo Abe, who appeared to obliquely reference the situation in Hong Kong in a meeting with the Chinese leader on Thursday as relations between Asia’s two biggest economies continue to improve.
Abe told Xi of Japan’s support for an “open and free” Hong Kong under the “one country, two systems” set-up, Japan’s Mainichi Shimbun newspaper reported.
A senior Chinese foreign ministry official had said Monday that China would not allow Hong Kong to be brought up at the G-20.
“It’s not only related to political freedom but also related to economic freedom that’s being strongly eroded by Beijing,” the 22-year-old Wong, secretary-general of local pro-democracy group Demosisto, told Chery Kang on CNBC’s “Squawk Box.”
Wong rose to prominence in 2014 during Hong Kong protests known as the Umbrella Movement that called for broader democracy. 

On Friday, he said that the territory’s status as an international financial center must be maintained to ensure a stable business environment.

Hong Kong pro-democracy activist Joshua Wong speaks with CNBC on June 28, 2019 in Hong Kong.

A legal change put forward this year by the Hong Kong government to allow criminal extraditions to China was the spark for the protest movement, but at its core lie years of mounting frustration over waning local autonomy.
Fierce opposition to the proposed legislation, which opponents, including business groups, feared could expose people in Hong Kong to China’s politically controlled courts, forced the city’s top official, Chief Executive Carrie Lam, to indefinitely shelve the plan. 

And while refusing protesters' demands to step down and entirely withdraw the legislation, she has publicly apologized and acknowledged it is unlikely to be resubmitted for debate.

‘Make their decision’
Hong Kong, a former British colony, on July 1, 1997 became a special administrative region of the People’s Republic of China under a “one country, two systems” framework, with the territory’s legal system independent from the rest of China.
It was guaranteed a high degree of control over its own affairs, including managing its economy and currency.
Aside from concerns about closer legal ties to China, calls for increased democracy are growing prominent in the protests.
Politically, Hong Kong has its own legislature, but the chief executive is not directly elected and only candidates acceptable to the central government in Beijing are eligible for the role.
Wong, who was released earlier this month after serving a brief prison term related to the 2014 protests, said people in Hong Kong want to freely elect their leader, calling the position “just a puppet of Beijing, serving the interests of (the) communist regime.”
Speaking ahead of the anniversary Monday of Hong Kong’s return to China, Wong renewed a call for direct elections for chief executive, expressing the hope that an annual demonstration that takes place on the day will see another large turnout.
“It’s time for Carrie Lam and the leader of Beijing to make their decision,” Wong said.
Lam’s office had no specific comment on Wong’s remarks, instead referring CNBC to her previous responses to media questions, most recently at a press conference on June 18.

Cease-Fire

After Trump summit, no mention in China of 90-day deadline or trade concessions

By Anna Fifield

In this Dec. 1, 2018, photo, President Trump and Chinese dictator Xi Jinping attend their bilateral meeting at the G-20 Summit in Buenos Aires, Argentina.

BEIJING — China seems to have a markedly different view of the trade war cease-fire reached with the Trump administration over the weekend, with state media making no mention Monday of the 90-day time frame or the reduction in tariffs on imported American cars or indeed any specifics about buying more American products.
That raises the prospect that the two sides have come away from their meeting in Buenos Aires, on the sidelines of the G-20, with very different ideas about what comes next.
“Do we have another Singapore summit, where the North Korean delegation went home with a very different set of perspectives?” asked Paul Haenle, a former Asia adviser to former presidents George W. Bush and Barack Obama, now running the Carnegie-Tsinghua Center in Beijing. 

He was referring to the summit between President Trump and North Korean leader Kim Jong Un, which seemed to produce different definitions of the word “denuclearization.”
In the absence of a joint statement or a joint news conference after their meeting, each side has been putting their own spin on the summit and its outcome.
President Trump portrayed the agreement as a second chance for Chinese dictator Xi Jinping, saying he would give the Chinese leader 90 days to deal with the structural issues in the trading relationship — like forced technology transfer and industrial espionage. 

If no deal is reached in that time frame, the American president said he would go ahead with his previous plan to raise tariffs on $200 billion in Chinese products from 10 to 25 percent, which had been due to kick in on Jan. 1.
President Trump had been threatening to increase the existing tariffs and also to impose new tariffs on the remaining $267 billion worth of goods that China sells to the United States each year.
President Trump tweeted late Sunday night that China “has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.”
But there was no mention of any of this here on Monday.
The People’s Daily, the official newspaper of the Chinese Communist Party, ran a photo of Trump and Xi shaking hands and smiling at the top of Monday’s front page. 

But the story, while stressing agreement and cooperation, had nothing about buying “very substantial” amounts of agricultural, industrial goods and energy products, as the White House said, and nothing about the 90 day deadline. 

Nor was there anything about tariffs on car imports into China.
Nor did news bulletins on CCTV, the state broadcaster, include any mention of buying more American goods or coming to an agreement within 90 days. 

Only the nationalist Global Times tabloid mentioned the time frame, and then the attributed it to the White House alone.
Neither was there any sign of the White House contention that Xi had promised to reconsider Qualcomm’s bid to buy NXP Semiconductors, a Dutch rival. 

The $44 billion deal collapsed after Qualcomm, the American smartphone-chip maker, failed to get Chinese regulatory approval.
What Chinese state media did say, however, was that the two sides would work to “gradually” to decrease the trade imbalance — a statement that appears to be at odds with the rapid progress that President Trump wants.
Chinese Foreign Ministry spokesman Geng Shuang did little to clear up the discrepancies on Monday, saying that the two sides’ readouts from the meetings spoke for themselves.
“I only want to stress that the two leaders reached important consensus and the teams on the two parts will follow through on the consensus,” he said at a press briefing. 

The two sides would “speed up” their talks and “attempt to conclude a mutually beneficial agreement at an early date.”
Asked specifically about the 90-day deadline, the spokesman demurred. 

“I think you should focus on that we discussed and agreed,” he told reporters. 

“We agreed to hold off on imposing new tariffs. This agreement is quite significant since it has stopped our trade dispute from escalating and also opens up new prospects for win-win cooperation.”
Chances are that both sides are “cherry picking” the details that suit them, said Zhao Hai, an economics specialist at the Chinese Academy of Social Sciences in Beijing.
While Trump has come under fire from industries that are suffering from the Chinese tariffs, like soy beans and pork, so too is Xi navigating sensitive economic terrain at home. 

The Chinese economy was already slowing before the trade war erupted.
Stock markets, at least, seemed relieved at the truce, however temporary. 

China’s benchmark Shanghai composite index closed up 2.57 percent Monday.
“This is hopefully a turning point for both sides to stop and rethink the direction they were heading in,” Zhao said. 

But the “downside” was the 90-day time frame set by Trump. 

“The U.S. needs to lower its expectations,” he said.
Indeed, other analysts said that the delay in tariffs appeared to be win for China.
“The Chinese are always playing for time and any pause that involves more talking is a victory for Beijing, as it only adds to the chances they have for a shift to a more favorable US domestic political environment,” wrote Bill Bishop, publisher of the influential Sinocism newsletter.
“As we have learned with the waning ‘maximum pressure’ campaign on North Korea, once you step back from the brink it is difficult to marshal the support to return to it if the talks do not bear fruit,” Bishop said.
The real question now is whether the world’s two biggest economies can make progress on substantive matters in the next three months. 

Just having China buy more American goods and shrinking the trade deficit will not solve the broader structural problems in their economic relationship.
“Is China going to make the changes that the international community desperately hopes that China makes, so that foreign companies can complete on a level playing field?” asked Haenle of Carnegie-Tsinghua.
These changes include allowing greater access to the Chinese market and stopping foreign companies from having to hand over their technological secrets as a condition for operating in China.
Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation, doubted that the truce would lead to a solution to the long-term trade problems.
“The two sides seem to have a very different understanding of the priorities when it comes to handling the structural problems,” Mei said. 

“The United States think it’s all about unfair trade practices while China believes it’s about low national savings. It’s one problem with two interpretations.”
Given that, Mei was not optimistic about what would come after the 90-day truce. 

“I think we should be prepared for the protracted war,” he said. 

“Personally, I’m preparing for the U.S. to impose tariffs on all Chinese exports.”

We are at war against the Chinese, and it's not just over trade

• CNBC's Jim Cramer does not expect a trade deal between the U.S. and China any time soon.
• President Trump and Chinese dictator Xi plan to meet around the G-20 summit later this month.

By Matthew J. Belvedere

President Donald Trump speaks during a press conference with Xi Jinping at the Great Hall of the People in Beijing on November 9, 2017.

CNBC's Jim Cramer said on Monday he does not expect a trade deal between the United States and China any time soon.
"I think we are at war against the Chinese, and it's not over. And the war is not just trade," Cramer said on "Squawk on the Street," taking cues from the speech that White House trade advisor Peter Navarro delivered last week.
Dr. Navarro said Friday any agreement between Washington and Beijing to end their trade dispute, which resulted in back-and-forth tariffs, will be on "President Donald J. Trump's terms, not Wall Street terms."
Cramer said the tone of Navarro's speech on economics reminded him of the kind of rhetoric that then-President Ronald Reagan used decades ago during the Cold War with Russia over nuclear arms.
"That's a speech that Reagan gave against the Soviet Union. And that didn't end well for the Soviet Union," said Cramer, the host of "Mad Money." 

"The G-20 is going to be so important."
Cramer was referencing the summit of the Group of 20 leaders in Buenos Aires, Argentina, at the end of the month when President Trump and Chinese dictator Xi Jinping plan to meet.
In September, the White House imposed its latest round of tariffs, totaling $200 billion of Chinese products. 

In response, China levied tariffs on $60 billion of U.S. goods.
President Trump has also threatened additional tariffs of $267 billion, which would basically cover the rest of all Chinese imports into the U.S.

Rogue Nation

China’s Silence at G-20 Underscores Communication Challenges
By Ye Xie

Haruhiko Kuroda, governor of the Bank of Japan, center, laughs before posing for a group picture at the G20 finance ministers and central bankers summit in Buenos Aires, Argentina, on March 19, 2018. 

At the Group of 20 meeting in Buenos Aires, a top U.S. Treasury official lambasted China’s trade practices.

The chief American trade representative has pressed countries to ally with the U.S. in pushing back against the Chinese in exchange for relief from American tariffs on steel and aluminum.
Chinese delegates in response, including Zhou Xiaochuan -- who stepped down as the central bank chief this week -- and Vice Finance Minister Zhu Guangyao, have gone radio silent. 

There’s no war, at least, not one of words. 

There’re no press briefings or media interviews scheduled either in Buenos Aires. 

That is a contrast to Germany, Brazil, France and the U.S., whose officials actively sought press coverage to make their voice heard during the two-day meetings.
While it’s not unusual for Chinese officials to favor private lobbying and maneuvering behind the scenes, their aversion to the limelight is becoming awkward at a time when the U.S.’s public blasts on China over trade have grown. 

The Trump administration plans to impose tariffs worth as much as $60 billion on Chinese products as early as this week.
At home, China has not been entirely reticent. 

Speaking at the end of the annual National People’s Congress on Tuesday, Li Keqiang said that China wants to avoid a trade war, saying that the government plans to further open the manufacturing sector and won’t force foreign companies to transfer technology.
Still, the lack of a clear-cut communication strategy at the international stage may have robbed China from a chance of winning public support and sympathy.