China: President Xi goes to Davos

Research Team at BBH notes that this will be the first time a Chinese President attends Davos and it is part of an important and ironic juxtaposition that appears to be unfolding.

Key Quotes

“It will be Chinese "core" leader that will defend globalization from the populism and protectionism that appears to be on the rise in the United States and Europe. The shoe has been on the other foot for years. Chinese nationalism was worrisome for many. It was China's reluctance to free-trade rules embodied in the WTO agreements that was the cause of much trade friction. Meanwhile, the price of stabilizing the economy has been a continued increase in credit extension. At the same time, capital controls have been tightened stem the outflows. The painful squeeze inflicted in the offshore yuan market continues to deter speculation as CNH is trading at its largest premium (rather than the more usual discount) for the longest period under this dual currency regime.”

“We had argued that just like Bush and Obama backed off their campaign pledges to cite China as a currency manipulator when they assumed office. Our forecast that Trump would also back off his pledge to cite China on day one was also bluster is coming to pass. In an interview in the Wall Street Journal, the President-elect says it won't be day one. He will talk to them first. Revealing either his reluctance to take language seriously or a subtle slight to China, Trump referred to President Xi as chairman. It would be like calling a US president Commander. It is a title they have but not this purpose. Alternatively, it could be a jab that Xi is not elected. More antagonistic to the Chinese, Trump said he is not committed to the US traditional one-China policy. He claimed it was up for negotiations.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.