Chinese Trade Deal Sentiment: CEO Daily

 fortune.com  09/13/2019 09:45:36 

Good morning from Hong Kong, where the Mid-Autumn Festival is underway, and everyone is handing out mooncakes. Mooncakes are a tradition like Christmas fruit cakeenjoyed much more in the giving than the receiving. Ive tried three different ones in the last two days, and am done.

The holiday has shuttered markets in China, but those in the rest of Asia are modestly celebrating signs that the U.S. and China may reach an interim trade agreement when they meet next month. Chinas top trade negotiator, Vice Premier Liu He, told business leaders that the whole world is expecting to see progress in China-U.S. trade relations. And President Trump said he is open to a interim deal. Id rather get the whole deal done, he said, but an interim deal is something we would consider, I guess.

One big reason for considering it is continued evidence that the economy is slowing. The International Monetary Fund said yesterday that the trade spat could shave 0.8% off of global growth.

Ive been traveling in China for the past two weeks, and have found near universal sentiment here for restoring good relations between the U.S. and China. The notion of a world with two separate, parallel and competing economic spheres of interest is not one that has much appeal on this side of the world. In Yunnan last week, former IFC CEO Jin-Yong Cai said the U.S.-China trade spat not only had economic ramifications, but also could be an obstacle to progress on the environment. In Chongqing this week, party officials took me and my Fortune colleagues on a tour of the Joseph Stilwell museumthe rare monument to an American in China.

But on the U.S. side, support for conciliation is far less clear. In a debate yesterday, Democratic presidential candidates seemed to be trying to outdo Trump on trade. The fact of the matter is China&theyre stealing our intellectual property, theyre violating the World Trade Organization, theyre dumping steel on us, said former Vice President Joe Biden. In addition to that, were in a position where if we dont set the rules, were going to find ourselves with China setting the rules. And thats why you need to take on China.

Even if theres a temporary truce next month, the war is far from over.

More news below.

Alan Murrayalan.murray@fortune.com

@alansmurray

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This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.

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