On which parts of the trade deal did the Chinese side backtrack? On the whole lot, it seems – or at least ‘nearly all aspects’.
The unofficial-official explanation is that Beijing dropped all its hard commitments and reinserted traditional-style vague intentions, because incorporating US demands into enforceable PRC law takes effort and ‘could provoke unwelcome challenges from within senior policy circles’ (policy circles already supposedly angered by China’s concessions).
No-one outside Zhongnanhai has a clue what CCP elites bicker about, but we can guess that accusing someone of being soft on the barbarians never fails.
We can also assume that this whole situation springs from a major miscalculation on the part of the Chinese side – Xi Jinping’s hubris to be exact. Trump is supposed to fold but doesn’t. At some point, pulling the plug on the deal is the only way out. Not just because of ‘face’ or humiliation or fear of showing weakness, but because the state-led, interventionist, subsidizing, mercantilist ‘development model’ is substantially the same thing as the CCP’s monopoly of power (or, as they call it, ‘sovereignty’).
China’s negotiator Liu He is off to Washington to ‘clear up any misunderstandings that may have arisen’. To make things interesting, Trump is now deciding that the trade war makes a useful weapon against Joe Biden.
The Hang Seng Index has done another ‘whoomph’ this morning – down over 500 points. Common sense tells you the two sides must find a way out of this. But after 20 years or more of mutual tolerance between two massively mismatched systems, maybe that won’t happen, and we’re heading for trade and investment de-linkage.
In which case, Hong Kong – no longer autonomous and flexible, but under orders to integrate and grasp Bay Area Opportunities – will take some serious hits. Perhaps it would, in some ways, be a relief.