Trump, Xi joust for world economy crown with divergent plans

Bloomberg

President Donald Trump touches down in Beijing on Wednesday seeking immediate wins for the world’s-biggest economy. His host, President Xi Jinping, is playing a longer game.
Xi has mapped out a two stage blueprint: first, to entrench China’s manufacturing might by 2025 through a shift up the technology chain to high value-add products. Second, as laid out last month, build a “great modern socialist country” so China is “a global leader” by 2050.
Trump, who’ll be accompanied by business leaders eager for deals, wants to cut his nation’s trade deficit with China, which last year totalled $327 billion according to IMF data. That gels with his campaign pledges to return manufacturing jobs to the US, including reviving industries like coal mining and steelmaking.
“Xi’s model is to build an economy that looks more like America’s, and Trump’s is to build an American economy that looks more like China’s has been,” said Hugh White, a professor of strategic studies at the Australian National University in Canberra and a former intelligence analyst and senior defense official. “Xi’s increasingly focused on China’s economy expanding into high-tech and high value-add-ed jobs and letting other people mine the coal and make the steel. Trump’s model of course is just the opposite.”
So far, the Trump presidency has been a positive for China’s economy as low US unemployment and slow-to-no progress on tariffs has supported a return to growth for China’s exports, while a weak dollar for the first three quarters of the year was a boon for the yuan, said Bloomberg Intelligence Chief Asia Economist Tom Orlik.
“In an optimistic scenario, Trump’s appetite for tweetable wins and China’s longer-term focus could coalesce around financial market opening — a boon for the US investment banks, and a support for China as it attempts to tame its credit boom,” Orlik said. Trump — whose two-day itinerary to China includes a stop at the Forbidden City in Beijing and a state dinner — told reporters in Tokyo on Monday he has an “excellent” relationship with Xi. Still, the US president said there’s a “very unfair trade situation.”
“It has to come down,” Trump said of the trade deficit. “And that has to do really with free trade, fair trade, or reciprocal trade. And frankly I like reciprocal the best of the group.” Commerce Secretary Wilbur Ross has warned it will take time to resolve complex issues like intellectual property rights and forced technology transfers.