Investors are once again focused on the Sino-U.S. affairs ahead of President Joe Biden’s first virtual meeting with China’s Xi Jinping later on Monday.
Taiwan likely to dominate the virtual talks
While trade and technology are also on the agenda, CNBC’s Eunice Yoon expects “Taiwan” to dominate the virtual talks. On “Squawk Box”, she said:
Taiwan is going to be a major priority. Chinese have been messaging this with several different editorials saying that Taiwan is the ultimate red line for China and that President Xi is going to warn President Biden to step back from any perceived support for an independent Taiwan.
Tensions around Taiwan have been a “non-financial” tail risk for investors, but President Biden is expected to reiterate the “one-China” policy in his talk with President Xi, which could send a sigh of relief among global investors.
Economic issues are not on the agenda
Interestingly, economic issues like supply chain constraints and tariffs are not on the U.S. agenda, Yoon revealed, citing a senior administration official. China sees tariffs as a bigger problem for U.S. businesses in the first place.
Chinese state media has referenced tariffs saying that tariffs are more of a U.S. business problem and that Biden is the one who’s under pressure, because these tariffs put even more a strain on the U.S. companies, stoking inflation.
China has been trying to steer the conversation to climate change, and away from bilateral issues like human rights, she added.
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