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The Blinken visit to China: a signal of relaxation and new opportunities

Dear friends

Today I would like to share with you some reflections on the recent visit of US Secretary of State Antony Blinken to China. This important meeting sent a signal of détente and openness that could lead to promising results not only for the United States and China, but also for their allies and for global geopolitical stability.

The meeting and the agreements made pave the way for a series of positive developments, especially for the American economy. It was essential to achieve a détente of relations to ensure the continuity of the United States’ development plans, considering that the Chinese market, with its 1.4 billion consumers, cannot be left to competition. The stabilization of trade relations between the two countries is a crucial factor for the economic success of both.

In addition, the reduction of tensions, also on the technological front, was necessary. For several days now, there had been clear signs that drastic actions taken previously, such as the Chips Act, were causing immediate damage to the economy instead of protecting it as originally intended. This visit recognized the importance of a more balanced approach, overcoming the obstacles and restrictions that were limiting technological cooperation between the two nations. Although some barriers may remain on advanced technologies, marginal from the point of view of economic volumes, the way has been opened for greater collaboration and exchange of know-how in other sectors.

The trade deficit in the US widened to a six-month high of $74.6 billion in April of 2023, compared to a $60.6 billion gap in March and market forecasts of a $75.2 billion shortfall.

One of the most significant results concerns trade between the United States and China. The decision to maintain strong trade relations and not cut them is an important signal for investors and economic operators. In addition, Blinken’s visit marked a détente towards Taiwan.

The event represents a significant step towards the easing of trade and technology relations between the United States and China. This will create new opportunities for the American economy, allowing it to continue development plans and take advantage of China’s vast consumer market.

This visit sends an important political signal to U.S. partners and allies. The maintenance of trade relations with China, without cuts, with the recognition of the will not to impress excessive political constraints on them. This signal can alleviate Allies’ concerns and strengthen confidence in transatlantic relations. By strengthening cooperation and openness, the United States can work together with its allies to address global challenges more effectively.

Blinken’s visit also has an impact on Russia, which is facing further isolation. The opening of relations between the United States and China creates a geopolitical balance that could push Russia to reconsider its position. This can encourage greater dialogue and the search for peaceful solutions to international tensions, promoting greater stability in the global landscape.

Finally, Blinken’s visit marked a détente towards Taiwan. The political-military tension that has characterized relations between China and Taiwan could see a reduction thanks to this sign of openness. This is a significant step towards greater stability in the Asia-Pacific region and better mutual understanding between the parties involved. Secretary of State Antony Blinken reiterated the U.S. position on its One China policy during his meeting with Chinese leader Xi Jinping on Monday, saying he does not support Taiwan’s independence and that containing China’s economy was not a goal.

These three messages contain political values of extreme importance, especially because of the recognition they give to China’s position on the latest tensions. Détente with regard to Taiwan is a strong signal. This is a significant step towards greater stability in the Asia-Pacific region and better mutual understanding between the parties involved.

Blinken’s visit to China certainly represents a major turning point in trade and political relations between the United States, China and their partners. It represents a sign of détente and openness that offers new opportunities for dialogue, cooperation and the search for peaceful solutions. The decision to maintain strong trade relations, the possibility for China to be a negotiator for a shared peace and the geopolitical impact on Russia and Taiwan are all factors that contribute to greater stability and a positive outlook for the global landscape.

Exports from China shrank 7.5% yoy to a three-month low of USD 283.5 billion in May 2023, reversing from an 8.5% growth in April while pointing to the first fall since February and the steepest decline in four months. The latest print was worse than the market consensus of a 0.4% decline, as global demand was insufficient to sustain a recovery in outbound shipments. Among major trade partners, exports to the US plunged by 18.2% from a year earlier, while those to the EU slumped by 26.6%. By contrast, shipments to Russia surged by 114%, particularly energy. Considering the first five months of the year, exports were up 0.3% from the same period in 2022

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