Beijing Rattles Sabers Before U.S.-China Talks

• Just as U.S. and Chinese officials signal their first return to the negotiating table since trade talks collapsed in May, defense hawks in Beijing accused the U.S. of undermining global stability.
• A coincidence perhaps, but the sharp rhetoric is a vivid example of how fragile relations have become between the world’s two biggest economies.
• China’s military is also rapidly modernizing as it pushes to extend its influence in the East China Sea, South China Sea, and the Indian Ocean, spurring tensions in a region dominated by the U.S. military since the end of World War II.
• Further, Huawei, the Chinese tech giant on the U.S. blacklist, quickened revenue growth to roughly 30% in the first half after securing critical supplies to keep production going despite U.S. export restrictions.
• Taken together, the mood music hardly bodes well for a major breakthrough when senior U.S. trade officials meet their Chinese counterparts in Shanghai on Monday.

(Source: Bloomberg)