By Clay Chandler and Eamon Barrett
March 2, 2019

There have been a flurry of small and medium-sized developments over the last few days as we await the outcome of U.S.-China trade negotiations. On Thursday, the White House confirmed it would suspend President Trump’s March 1 deadline for slapping new tariffs on Chinese imports. On Friday, Trump said in a tweet that he has called on China to lift all levies on U.S. agricultural products as a sign of good faith as negotiations head into the final stretch.

U.S. stocks ended the week at their highest level since November as investors regained confidence that a deal is imminent, overcoming the momentary panic induced by trade representative Robert Lighthizer’s warning to Congress Wednesday that “much still needs to be done.”

In Washington, the punditocracy seems generally agreed that Trump’s decision to “walk away” from a deal with Kim Jong Un in Hanoi earlier in the week gives him greater cover to say yes to a deal with Xi Jinping. The smart money is still betting that the perceived political advantages of closing a big, beautiful China agreement will override any lingering policy objections about the fine print—and that sometime this month Trump and Xi will toast their accord at Mar-a-Lago.

For hard-core trade hawks, that’s a dismaying prospect; critics from both parties are sharpening their spears. In Politico, Zachary Karabell decried Trump’s “phony trade war” as “just disruptive enough to cause consternation and insecurity on both sides of the Pacific and not nearly enough to force anyone to change much at all.” Bloomberg‘s David Fickling paid a backhanded tribute: “If President Trump wants to put his name on a big, splashy agreement that ultimately just returns things to the status quo, let him have it.”

Meanwhile Canada’s Justice Department cleared the way for extradition proceedings for Meng Wanzhou, chief financial officer of Chinese telecommunications equipment manufacturing giant Huawei Technologies, provoking indignant commentary from Chinese diplomats. Meng is unlikely to set foot in a U.S. courtroom anytime soon. The Canadian legal process allows her multiple opportunities for appeal, and Trump has hinted repeatedly that he’d consider offering Meng clemency as part of a trade deal.

Amid the hoopla, Sinocism’s Bill Bishop highlighted a report from the China Internet Network Information Center underscoring one of the reasons Fortune pays so much attention to China in the first place—and illustrating why China will still matter, no matter how the trade talks come out. The report noted that, as of December, the number of Internet users in China reached 829 million, while the number of online shoppers and customers who use online payment topped 600 million. Like it or not, China is a force to be reckoned with. In tech and many other sectors, it’s not just big, it’s yuuuuge.

More China news below.

Clay Chandler


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