America's soaring and systematic goods trade deficits with China — with 2018's estimated to reach $430 billion, for an increase of more than 20 percent from the previous year — are one of the fundamental political and security issues dividing the world's two largest economies.
No one should, therefore, be surprised by the statement made last week by the U.S. Commerce Secretary Wilbur Ross that Washington and Beijing were "miles and miles" from any trade agreement. China, after all, is also considered by the U.S. to be a strategic "competitor" (adversary) and a "revisionist power," seeking to upend the American world order.
In a strange case of myopia, economic and financial analysts don't see that strategic assessment as a key driver of Washington's dealings with Beijing. Their market outlook is caught up in a bizarre view of an allegedly disintegrating Chinese economy and "news" leakages from ongoing trade negotiations.
All that is frivolous chatter and cheap trading fodder. The Chinese economy is not falling apart. Beijing has, and is actively using, a number of demand management instruments to stabilize the economic growth in the 6 percent to 6.5 percent range it apparently sees as a chief policy objective.