US-China Relations & Trade War - APEC sideline Xi-Trump meeting expectations are low, similar to past summits [3][4] - US has consistently underestimated China's bargaining power, viewing the relationship as a one-way dependency [8] - Trump is likely to back down from his threat of an additional 100% tariff on top of the pre-existing 30% to 50% [6] - China's rare earth export controls are causing potential pressures on global supply chains and US manufacturing [7] Impact on US Economy - Tariffs are causing goods inflation, especially in categories like furniture and some consumer appliances [10] - The impact of tariffs has been slower and more gradual than initially anticipated [9][10] - Executive overreach in trade policy is undermining American legitimacy [10][13] China's Economic Strategy - China needs a new source of growth, as the property sector is struggling and exports face protectionist backlash [17] - Boosting household consumption share of GDP from currently around 40% to 50% by 2035 should be a target [19] - China has built buffers by diversifying soybean purchases and developing its domestic AI industry [14] Renminbi Internationalization - The dollar is under downward pressure due to executive overreach, deficit spending, and high levels of US debt [21] - China is gradually putting pieces together to make the renminbi more attractive as a global reserve currency [23] - China needs to open its capital account and continue to build capital reform infrastructure to internationalize the renminbi [23][24]