On Friday, the earnings season began in earnest when four big banks reported their financial results. The group has massively underperformed, so the stage is set for earnings beats, but guidance is still in question. It’s hard to imagine that banks have made business model changes that really address the real issues of inconsistencies. However, they could begin by making loans to individuals and small businesses.
Until then, we will hear more about the tariff war that America joined after four decades of ignoring.
On that note, I’m watching the Chinese media closer than ever. Their newspapers reveal an air of confidence as if they are making painful efforts to quell growing fear and anxiety. Yes, President Xi Jinping is something of a modern-day emperor, but he must keep China’s wealthy folks from smuggling out even more billions. And he must keep growing the middle class, which has more clout than ever before in China.
On another note, check out the recent excerpts from the Chinese media:
The Propaganda Blueprint
On U.S.- China Trade Tensions
The following censorship instructions, issued to the media by government authorities, have been leaked and distributed online. The name of the issuing body has been omitted to protect the source.
First, regarding the U.S.-China trade conflict:
Three "Don’t Relays": Don’t relay comments from Trump, from U.S. government spokespersons, or from U.S. officials. Don’t relay U.S. news reports or commentary on the trade conflict without waiting for response from the Ministry of Commerce.
The China Securities Regulatory Commission will soon organize experts to lead the chorus in stabilizing market expectations.The next step will be for the People’s Bank of China to take to the stage with substantive policy moves to boost high-quality economic development.
[Vice Premier] Liu He has indicated that this stage of the U.S.-China trade conflict requires calm and rationality. Each department should strengthen its contribution to the stabilization of market expectations. We stop negotiation for now, acting tit for tat, roll out corresponding policies, hold public opinion at a good level without escalating it, limit scope, and strike accurately and carefully, splitting apart different domestic groups in US. The trade conflict is really a war against China’s rise, to see who has the greater stamina. This is absolutely no time for irresolution or reticence.
Don’t attack Trump’s vulgarity; don’t make this a war of insults.
Note different implementation stages in the breakdown of the [U.S. tariffs on Chinese exports worth] US$50 billion: levies on the $34 billion from July 6 are highly likely to happen. Levies on the remaining $16 billion will be considered on July 13, and take effect at the beginning of August, if approved.
All media should prepare well for protracted conflict. Don’t follow the American sides’ fluctuating declarations. Play down the correlations between the stock market and trade conflict.
Second, other matters:
Give prominence to reports on economic bright spots and developments, showing our economy’s prospects for continued steady improvement. Emphasize economic reports using important page placement and timing. Interview experts recommended by each department; websites and Weibo and WeChat accounts must emphasize suitable forms of network propaganda.
To re-emphasize: do not make further use of "Made in China 2025," or there will be consequences. (June 29) [Chinese]
China levies its own tariffs in self-defense
Beijing confident, protecting national interests as US initiates trade war
Trade protectionism is harming U.S. manufacturing
Trade protectionism is harming the U.S. manufacturing industry, as some enterprises have decided or are planning to transfer parts of their businesses out of the states in order to avoid possible impacts the protectionist trade policy may incur.
117-year-old U.S. motorcycle company Harley-Davidson recently announced plans to move part of its motorcycle production out of the states.
The Trump, Navarro, Lighthizer 'Iron Triangle’
With such a mindset, "US trade tsar" Lighthizer and "China threat" advocator Navarro have become Trump's best friends in fulfilling his mission. All of them believe that trade is a zero-sum game. Thus, the only three Americans who want to wage a trade war against China have finally banded together.
However, they are completely wrong in believing that China will simply surrender under their coercion and blackmail. While Lighthizer is known for forcing the Japanese to sign the Plaza Accord in the mid 1980s, he has not realized that China is not Japan, and the year 2018 is also totally different from 1985. Replicating what he had tried in the 1980s has proved futile.
I Don’t Have to Cheer for the Home Team
I understand America doesn’t have state media, but when 99% of media hates the current occupant of the White House, it makes it easier for global adversaries to push back and remain belligerent. I always cheer for the home team; in this case, President Trump isn’t starting a war - he is trying to finish one. Of course, I would do some things differently; and now, all I have to do is to become president of the United States.