Biden To Take Tough Stance on China

US/China relations have been back in the spotlight this week with President Biden vowing to take a tough stance against China. Biden warned the world's second largest economy that it can expect "extreme competition" from the US under the new administration.

Following on from the volatile and incendiary situation which developed over the course of Trump's two year trade war with China, political spectators had been keen to see how Biden would approach the issue. Biden recently declared that he would hold China accountable for human rights abuses though highlighted that he won't do it "the way Trump did."

"Extreme Competition"

Speaking with reporters this week, Biden said that he is yet to speak with Chinese premier Xi, though added that the two have a lot to talk about. Biden kicked off his presidency by reversing some of the tariffs put in place by Trump and said that that two countries "need not have a conflict" though warned that China can expect "extreme competition".

Biden Knows Xi Well

Biden has good experience when it comes to dealing with Xi. As Obama's VP, Biden said he "had 24, 25 hours of private meetings with him" adding that he "travelled 17,000 miles with him". Biden describes Xi as "very bright" though did say that he "doesn't have a democratic, small D, bone in his body."

China Warns US Not To Interfere

However, it is not yet clear what stance China will take. In the first communications involving the new administration, Chinese foreign official Yang Jiechi told his US counterpart that he was optimistic over the future of US/China relations. However, Jang also warned the US not to interfere with Hong Kong, Tibet or Xinjiang.

For now, markets await the first formal discussion between the two national leaders. However, given Biden's commitment to holding China accountable for human rights abuses, the path ahead could be just as rocky as the one just travelled.

Technical Views

USDCNH

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