Expectations for the meeting between President Trump and President Xi are running high, as the two leaders prepare to meet on the sidelines of the Group of 20 (G20) meeting in Osaka, Japan. This will be the first meeting between the two leaders since trade negotiations collapsed in May, after China allegedly backpedalled on U.S. demands. Both sides have since ratcheted up their punitive measures and tariffs.
The U.S.-China trade war is dominating the G20 discussions and casting a shadow on global growth estimates. While a truce is unlikely, one possible scenario for restarting the negotiations is a goodwill statement. At the very least, President Trump signaled that he hopes the talks are "productive," although both sides have hardened their stance in advance of the meeting.
Both leaders are under enormous domestic pressure not to give in or be seen as capitulating. President Trump faces a tough reelection bid next year and needs a good trade deal with China to secure the 2020 election, although his tariffs may be disproportionately hurting the core of his voting base, U.S. farmers. Learn more in China-US Focus's explainer video. Meanwhile, the global trade landscape is undergoing a dramatic and possibly permanent shift, as Chinese businesses diversify their trade relationships, and U.S. businesses move production elsewhere. Some reports indicate that companies are circumventing the tariff rule by having their products stop at intermediate destinations, especially Vietnam, before entering the U.S., effectively dodging Trump's tariffs.
Over a dozen global telecommunications companies have been hacked, in a spree of espionage attacks directed at high-profile targets. The hackers are suspected by some to have ties to China's government, and one cybersecurity firm has linked the attack to previous Chinese cyber-espionage campaigns. The hackers have accessed prominent individuals' locations, text and call history, and other sensitive data.
China has always denied any such hacking activity, with many Chinese analysts supporting that position, although Western countries have repeatedly blamed China for compromising companies and government agencies around the world by stealing commercial secrets in a quest for trade secrets.
China-Canada relations continue their downward spiral, with Chinese accusations over counterfeit health certificates on Canadian meat imports. The discovery was made after China investigated Canadian meat for a banned feed additive. Beijing swiftly ordered Canada to stop issuing health certificates, thereby preventing Canadian suppliers from exporting to China. Canada's minister of agriculture has since confirmed that the export certificates were fake.
Prime Minister Trudeau and President Xi were seen sitting next to each other at the G20 meetings, although they failed to shake hands or acknowledge one another. Tensions between the two countries have been running high, after the arrest of a top Huawei executive last year, and the later detainment of two Canadians in China.
Prepared by China-US Focus editorial teams in Hong Kong and New York, this weekly newsletter offers you snap shots of latest trends and developments emerging from China every week, while adding a dose of historical perspective.