US president Donald Trump has ramped up criticism of China’s initial handling of the Covid-19 crisis. In the latest development, Trump threatened to cut off the US’s relationship with China.
“There are many things we could do,” Trump said in a Fox News interview on Thursday. “We could cut off the whole relationship. Now if you did, what would happen? You’d save $500bn.”
Trump did not explain further about what he meant by cutting off “the whole relationship”.
On Wednesday, Trump extended by a year the executive order that prohibited US telecommunications companies from using equipment made by firms deemed a national security threat. These firms include China’s Huawei Technologies and ZTE.
That wasn’t all. On Monday, Trump said that he was not interested in reopening negotiations on the trade deal with China. The phase one of the trade deal was reached in January.
“China has been taking advantage of the United States for many, many years, for decades because we had people at this position, right here where I’m standing, sitting right in that office — the Oval Office — that allowed that to happen,” Trump said at a White House briefing.
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In separate news, US national security adviser Robert O’Brien and National Economic Council chairman Larry Kudlow called for the Thrift Savings Plan, a federal employee retirement fund, to pull their decision to invest in Chinese equities. This is according to a Monday letter from the two to US labour secretary Eugene Scalia.
In the letter, Kudlow and O’Brien warned that the planned investments “would expose the retirement funds to significant and unnecessary economic risk” and “channel federal employees’ money to companies that present significant national security and humanitarian concerns”.
Zhao Lijian, a spokesperson at China’s foreign ministry, fought back in a Wednesday press conference.
“It is inconsistent with the laws of the economy to obstruct or even politicise normal US investment in Chinese markets under the pretext of national security,” he said. “It will only cost them business opportunities and undermine the interests of US investors.”
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The Chinese Ministry of Commerce will exempt some foreign companies’ executives from the travel ban, Bloomberg reported, citing people familiar with the matter. However, they still need to go through the mandatory quarantine.
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The People’s Bank of China, China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission and the State Administration of Foreign Exchange jointly published draft rules to further develop the Greater Bay Area (GBA), by opening up its financial markets and connecting the financial infrastructure of the region with the mainland.
GBA covers Hong Kong SAR, Macau SAR and nine municipalities in the Guangdong province including Shenzhen and Zhuhai. The area is to serve as a pioneer in China’s commitment to reform and opening up.
The regulators have put together 26 rules. Key among them are the setting up of a “wealth management connect” and a renminbi offshore investment fund.
The regulators will also support foreign banks to simultaneously set up branches and subsidiaries in GBA and establish financial asset investment and wealth management companies that are not subject to any foreign ownership thresholds.
The regulators plan to facilitate the development of the offshore renminbi market and strengthen Hong Kong’s important position in the global offshore renminbi market.