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"China’s strongest card is probably Trump’s need to restore sanity to US fiscal policy ASAP. The challenge in negotiations will likely be finding a way to fix the looming US fiscal crisis while also accommodating China’s need for domestic stability. Both countries have strong incentives to reach an agreement." Great observation!

The most daunting part of reaching an accord may well be the extent of government control of the economy in China and its fear of losing that control. Its inaccurate reporting of its economic numbers, its enabling of market manipulation (which to its credit it has addressed to an extent), its currency manipulation (which it is still engaging in) and its continuing debt crisis around local governments and real estate are not things it will welcome foreign prying into. It has already rejected IMF proposals to help with the debt problem - probably wisely. Then there are the larger Chinese issues of declining population (with therefore a contracting industrial capacity) and lack of an internal or other external market for consumer goods that could replace the U.S. On the U.S. side as you note there is the fiscal debt issue with its Treasury Bond liquidity / interest rates subsidiary issues, the possibility of not being able to import critical goods, and being subject to currency manipulation by the Chinese.

As Trump has often said, it is not China's fault that this situation has arisen; it is that the West encouraged China to take advantage of it through never enforcing a level playing field. Still, after all this time, it will take risking a measure of honesty with itself (if not transparency to the rest of the world) on the part of the Chinese government, as well as at least a temporary suspension of the "China is our enemy" attitude of the U.S. oligarchy and bureaucracy, to enable a potential agreement.

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