Washington versus Beijing: respect for Hong Kong status


US-China tensions
The Hong Kong dossier promptly raised the level of tensions between the United States and China. The reaction of the US Secretary of State, Mike Pompeo, was immediate: “We condemn the Chinese proposal to impose a national security law in Hong Kong unilaterally and arbitrarily. It would be a fatal blow to its autonomy ยป. The United States is calling on Beijing “to reconsider the disastrous proposal.” President Donald Trump, who promises to deal with the matter in a “very decisive” way, raised the dose. The US grants Hong Kong preferential trade treatment, which could be revoked if the special region loses its autonomy. The European Union also calls for dialogue and supports Hong Kong’s autonomy and the “one country two systems” principle.

The tensions add up to the long series of open fronts between Beijing and Washington: from trade, to technological competition, to skirmishes over Taiwan to the controversy over the pandemic, which also imposes its heavy duty on the Chinese economy.

Farewell to the target of the GDP
In the context of global uncertainty, the regime has even decided for the first time since 1990 to give up the fetish of the economic growth target, to concentrate all its attention, and concern, on work. The Communist Party cannot afford discontent and social unrest even in the motherland. At work, Premier Li has set a target for 2020: the creation of over 9 million jobs, lower than the 11 million in 2019. “We will fight to keep existing jobs safe, to create new ones and to help the unemployed find work, “said Li.

The abandonment of the GDP target to be reached at all costs had actually been brewing for some time and the pandemic provided the country’s leadership with the right opportunity.

However, the package supporting the recovery disappointed analysts, who expected more robust measures. The public deficit will however increase to over 3.6% of GDP, without fixing a ceiling, a sign that the government wants to keep its hands free. According to Bloomberg economics, taking into account the special bond issues planned ($ 140 billion of sovereign bonds to support the recovery and containment of the contagion, plus 525 billion issued by local authorities to finance infrastructure projects), it would reach 8% of the GDP.

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