Chinese Foreign Minister Wang Yi speaks at the opening ceremony of the International Forum for Trilateral Cooperation that commemorates the 20th anniversary of trilateral cooperation among China, South Korea and Japan.
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By Aaron Pressman and Adam Lashinsky
May 10, 2019

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We were just wrapping a dinner panel in San Francisco to promote the upcoming Fortune Global Sustainability Forum in China’s Yunnan province this fall when news emerged that another round of U.S. tariffs against its trade adversary would shortly take effect.

That trade talks were faltering, the ones for which the Artist of the Deal previously set a March 31st deadline for completion, was of intense interest to the panelists, Deutsche Bank’s Priscilla Lu and Andrew Chung, a venture capitalist with 1955 Capital in Silicon Valley. Both invest in China. Both see a challenging road ahead given the inevitability of China’s growth and continued tensions between the two economic superpowers.

The damage already has had an impact. Lu notes Chinese direct investment in the United States has plummeted. Chung says entrepreneurs have redoubled their efforts to gain access to markets like Indonesia, China, and Malaysia, despite the tension.

If China’s trade delegation leaves Washington, D.C., without a deal, expect markets to get hammered, particularly tech stocks. The market rallied Thursday on hopeful words from the president, then started falling on Friday morning. Actions by trade negotiators will speak louder than words.

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All of Silicon Valley focused Thursday on the bombshell op-ed by Facebook co-founder Chris Hughes, who argues that his former company should be broken up. I read his manifesto carefully. It is a thoughtful, erudite, passionate (but not emotional) argument for why his friend Mark Zuckerberg has amassed too much power. He argues that Facebook needs to be cleaved quickly, before it accomplishes the self-serving task of integrating Instagram and WhatsApp with Facebook itself. Hughes’s words pack a punch as much for their well-argued eloquence as his insider’s knowledge and defense of his friend’s humanity. Facebook doesn’t need breaking up because Zuckerberg is a bad person, Hughes argues, but because the concentration of so much power in Zuckerberg’s hands is a bad thing.

Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com

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