As Xi Jinping is about to make his first visit to the United States of America, BBC’s Rico Hizon has Tama Churchouse on to discuss what economic sticking points may be discussed or dealt with during the visit.
But there are tensions over a range of issues, so what happens when the leader of the world’s second largest economy visits the world’s largest. Tama Churchouse from the Churchouse Letter, which looks at Asian financial news, joins us now from our Hong Kong Studio. Tama, great to have you with us on Asia Business Report. Xi Jinping arrives in the United States in a moment of vulnerability, you have the volatility in the mainland markets, and the slowdown in the economy.
Tama Churchouse: I don’t believe that he’s in a vulnerable position, at all at the moment. I know all eyes are focused on the Chinese slowdown, but he’s certainly not vulnerable, I don’t believe, in any way. It’s obviously an extremely important visit, there’s going to be a lot of things on the agenda and I think American corporations are going to be looking closely, over the next couple of days, to see what they can get out of this.
Rico: How do you think the United States will approach the devaluation of the yuan currency against the US dollar? Because in the past they have always insinuated that the Chinese have been manipulating their currency.
Tama: First of all, this is not a devaluation in any meaningful sense, this is the move of the Renminbi into a more market oriented, you know, market-determined currency. The fact that it is depreciated is certainly worth note, but this is not the beginning of a currency war, in any way shape or form, it is not a competitive devaluation at all.
Rico: All right, I mean according to Xi Jinping, he does not want confrontation, what he wants is that both countries work together. Do you see any major deals being closed when Xi Jinping is in America?
Tama: Yeah, I mean we’re going to expect some major deals, Xi Jinping is visiting the Boeing factory later today, the likelihood is going to be the announcement of either a large order or possibly the opening of a new finishing factory in China, that’s pretty significant. But at the end of the day, the US corporate needs China more than it needs them, so I expect some platitudes from Xi Jinping, but I’m not expecting any fundamental change in structural reform that’s going to make life much easier for Americans doing business and American companies doing business in China.
Rico: What about the issue of intellectual property? Will that be a major talking point between the two sides?
Tama: It will be a major talking point, but whether or not there’s going to be any significant resolution, it’s going to be hard to see at this stage. It is definitely going to crop up and especially in the technology sector, this is a massive issue, but again like I say, I believe the US corporate needs China more than they need them, so I don’t believe there’s going to be any major changes within the next few days.
Rico: So many issues on the table between the United States and China to be discussed during Xi Jinping’s visit to America, thank you so much for joining us, Tama Churchouse in Hong Kong.