Xi-Obama Summit: The sticking points between the world’s two largest economies
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In a word, what’s not working in the relationship between the U.S. and China:
“Cybersecurity,” says Patrick Chovanec is Chief Strategist at Silvercrest Asset Management. “It has emerged very rapidly as an existential threat to the U.S. in both economic and military terms.”
Chovanec says reports that China’s military stole terabytes of secret data from U.S. businesses will be at the top of President Barack Obama’s agenda, and getting President Xi to acknowledge this is a problem would be considered a success for the U.S.
But first, Xi will want to bring up what’s not working for China.
“China has reason to believe that the U.S. doesn’t trust a rising China, and that the US is trying to restrain or contain China,” says Fudan University’s Xin Qiang.
He says President Xi will be looking for a more open dialogue on China’s territorial disputes with its neighbors. Xi is also seeking help to make it easier for Chinese companies to invest in the United States without creating panic in Congress.
It may seem like a big to-do list for both sides, but there’s hope because what is working between the U.S. and China is the direction China’s economy is headed, says Patrick Chovanec. “Where Chinese leaders are increasingly realizing that China’s economy needs to go is exactly where U.S. leaders want it to go.”
Remember the fury over China manipulating its currency to keep its exports cheap? Not an issue anymore, says Chovanec. China’s appreciated its currency to curb inflation. That’s made U.S. products more affordable for the world’s largest rising consumer class.
A situation both sides are sure to be happy about.
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