With President Obama traveling in China, Wall Street is once again looking at new ways to profit from our blossoming relationship.
We think Obama may have revealed an important clue about the future in the following statement
"We have to understand that the future of the United States and Asia is inexplicably linked. The issues that matter most to our people, issues of economic growth and job creation, non-proliferation, clean energy, these are all issues that have to be part of a joint agenda."
What should you be watching?
The drumbeat of calls for China to allow the yuan to get stronger seems to be growing louder.
On Monday the IMF added its voice to the call – and said a stronger Chinese currency must be part of the package of “necessary reforms.” The commentary is similar in language and tone used by the Obama administration -- and President Obama himself -- during his China visit this week.
However, that Western ‘drumbeat’ may be falling on deaf ears. China's Commerce Ministry on Monday rebuffed both calls.
For the past year the yuan has been almost frozen in place against the dollar, as Beijing strictly regulates the nation’s currency. Many analysts now believe that economics and not politics is what will convince Beijing to allow the yuan to float – and that will require a surge in domestic demand.
Meanwhile, the administration is downplaying any chatter of a US-China trade war.
Robert Hormats, the US Under Secretary of State for Economic, Energy and Agricultural Affairs, said although "tensions, misunderstandings and frictions" were inevitable between China and the US, he was certain they would be resolved through talks.