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Meeting protocol reflects trade talks mood

Business | Ivan Tong Feb 18, 2019
The Hang Seng Index corrected 531 points on Friday before the results of the United States and China trade debate in Beijing were announced. The correction followed the benchmark index surging for one a half months. There are fewer opportunities for the index to further drop significantly again, as the market is optimistic the trade talks will result in a deal. Vice Premier and chief trade negotiator Liu He and US Trade Representative Robert Lighthizer are to lead the next round of talks this week in Washington. President Xi Jinping met the key members of the US trade talks delegation after two days of debate. There are some insights into the two nations' bargaining, compared to the meeting of US President Donald Trump and Liu at the end of January. Xi sat in the middle of the conference hall with the Sino-US delegation next to him when they met in Beijing. Meanwhile, Xi's attitude is neither overbearing or servile when announcing this round of trade talks saw progress, and said the two sides would speed up the debate progress ahead of the March 1 deadline. He also wishes to reach a win-win trade deal during this week's negotiations in Washington. In Trump's meeting, the US and China delegations both sat in his White House office. Whatever his speech and body language, those show his attitude is overbearing and insinuate that China should offer some benefits to the Americans. Liu also made a joke about China buying five million tonnes of soybeans per day from the United States. Obviously, Xi wishes to reach a deal as soon as possible, while Trump doesn't. However, Trump's attitude seemed to change to become proactive after he required an update on trade talks from the members of the delegation on Saturday at his Florida retreat, and said on Twitter the talks in Beijing were "very productive." It is possible that Trump and Xi would make a deal within 90 days of the cease-fire. However, most investors still believe that the deal wouldn't solve the dispute between the two nations. No one knows the HSI's ups and downs in the future, although I believe there are higher opportunities for the market to fall this year as the macro-economics are gloomy. In the short term, the market would be most affected by the capital inflow and outflow than the macro-economy. That's why the investors are too short-sighted to the market. Besides, the US market already rose for seven weeks, and the S&P 500 surged 18 percent from the first trading day after the Christmas holiday to nearly 2,800 points. The valuation of the index is much higher than January 2018's falling at present, and imply that the downward pressure of the US market is much more than the Hong Kong market. It is possible US investors will sell their stocks when the two countries make a deal in the future and the market surges.


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