Trump meets Xi

China & USA

Thursday saw US President Donald Trump welcome his Chinese equivalent, President Xi Jinping. It was the first time the two have met face to face: a blind date, if you like, albeit one with global ramifications.

US markets were subdued ahead of the meeting before springing to life, while the FTSE 100 faltered in Thursday’s trading as investors grew anxious over the outcome of the confab. In company news, Unilever announced plans to sell its Flora and Stork brands, while ChemChina moved two steps closer to the completion of its record takeover of Swiss chemicals firm Syngenta.

The US missile attack on Syria has momentarily deflected the headlines away from Donald and Jinping’s first date. Still, it’s vital these two get along; the world’s most important diplomatic relationship is at stake. Previous summits between the economic powerhouses have been snugly managed, but seldom have affairs between the US and China been so complex and far-reaching. North Korea, trade and investment and the South China Sea will be among the talking points over the weekend at President Trump’s Mar-a-Lago resort in Florida.

Trump has created something of a political trap for himself. His election campaign was anchored largely on China bashing so he’s under pressure to deliver on his promises, notably turning the US-China trading relationship upside down. President Xi, one of China’s most respected and powerful leaders of modern times, will be keen to keep up appearances. His top priority will be to prevent a destabilising trade war. With the Communist Party Congress in October this year, Xi will also be wary of potential bust-ups that could threaten political stability back home.

 


The article above was previously published on the ‘Thinking Aloud’ blog on 7th April 2017