Jul 24, 2020
Tensions between the two largest economies in the world continue, following the US’s demand to shut down China’s consulate in Houston on Wednesday. This was done in an effort to oppose China’s espionage, as the relationship between China and the Trump administration intensified. The US also accused China of violating human rights in Hong Kong.
“We must admit our truth that should guide us in the years and decades to come, that if we want to have a free 21st century and not the Chinese century of which Xi Jinping dreams, the old paradigm of blind engagement with China simply won’t get it done,” commented US Secretary, Mike Pompeo, “We must not continue it and we must not return to it.”
On Thursday, Mike Pompeo spoke at the Richard Nixon presidential library in Yorba Linda, California, and mentioned the fears of President Nixon about “opening the world” to the Chinese Communist Party in the 1970s, “Today China is increasingly authoritarian at home and more aggressive in its hostility to freedom everywhere else,” Pompeo stated, “If the free world doesn’t change Communist China, Communist China will change us,”
Following the closing of the consulate in Houston, China has ordered for the US consulate in Chengdu to close too. Bejign commented that the US had, “unilaterally provoked the incident”.
“The truth is that our policies – and those of other free nations – resurrected China’s failing economy, only to see Beijing bite the international hands that were feeding it,” Pompeo added. “We opened our arms to Chinese citizens, only to see the Chinese Communist Party exploit our free and open society.” The US Secretary then compared China’s actions to that of the Soviet Union.
On late Tuesday, 15th July Dow Jones futures and S&P 500 rose right after biotech company Moderna announced their COVID-19 vaccine looked promising. ⚕️ This news caused the stock market to show resilience once more. 💷https://t.co/8GpK5Tja2x#moderna #covid19 #dowjones pic.twitter.com/jSt3pqfJv5
— Online Financial Reviews (@OnlineFinancia7) July 15, 2020
The tensions sent global stocks to tumble of Friday. The Asian markets woke up turmoil following the closing of the US consulate in Chengdu. Hong Kong’s Hang Seng (HSI) declined over 2% while the Shanghai Composite Index (SHCOMP) went down 3.9%. European stocks suffered too – The FTSE 100 declined 1.7%, Germany’s DAX dropped 2% while France’s CAC 40 declined 2%.
Wall Street is preparing for an equally rough start for the day, as the S&P 500 NASDAQ declined 0.8% overnight. As geopolitical tensions between China and the US grow, economists expect a further decline and financial unpredictability to come.