US-CHINA: A TWEET, A SWIPE, AND A BARBED OVERTURE

The past few days have been a mini-roller coaster for those of us watching the increasingly fraught relationship between the US and China. Late last week, President Trump announced that he’d had a good chat with his Chinese counterpart Xi Jinping, bolstering hopes of a breakthrough on trade when the two men get together at the G20 meetings in Argentina later this month.


Then, over the weekend, Mr. Xi took an implicit swipe at the US, warning against its “law of the jungle” approach to global trade. Yesterday, Mr. Xi's top adviser Wang Qishan struck a softer tone, telling the Bloomberg New Economy Forum that China is open to working things out with Washington. But with a catch: China, he said, would not be "bullied and oppressed by imperialist powers."

As a reminder, over the past several months, China and the US have slapped tariffs on more than $360 billion worth of each other's goods. Trump is prepared to up the ante further if the Chinese don't agree to key demands, such as cutting support for Chinese firms and ending the squeeze of sensitive technologies from Western ones.

The trouble is that China isn't in much of a mood to capitulate. President Trump is, of course, on (very) firm ground when he says that China has, for many years, gotten away with unfairly supporting its own state companies while extracting technology from foreign ones as the price of entry into China's massive market.

But from Beijing's perspective, as Mr. Wang's comments make clear, what's at stake here isn't just the narrow issue of trade, industrial policy, or technology. It's about something bigger: China's rise as a world power. In Washington's attempts to change a state-backed economic model that has made China powerful, the Communist Party leadership sees a replay of old Western attempts to stifle China's bid to "take center stage globally" as President Xi put it last year.

Few issues in global affairs are as pressing today as the question of whether the world's two largest economies can reconcile what appear to be increasingly divergent national interests. To quote one seasoned observer not given to hyperbole – their failure to do so would "destroy hope for the world order."

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A few days ago, the New York Times published a bombshell report on the Chinese government's systematic oppression of Muslims in Western China. The story was about many things: human rights, geopolitics, Chinese society – but it was also about technology: Beijing's repression in Xinjiang province is powered in part by facial recognition, big data, and other advanced technologies.

It's a concrete example of a broader trend in global politics: technology is a double-edged sword with sharp political consequences. Artificial intelligence, for example, can help develop new medicines but it can also support surveillance states. Social media helps nourish democracy movements and entertains us with cat memes, but it also feeds ISIS and 4Chan.

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Increasingly violent anti-government protests in Hong Kong have dealt a major blow to the city's once booming economy. Tourism – an economic lifeline in that city – has dropped, and retailers are suffering from a sharp decline in sales. Now, six months since the unrest began, Hong Kong has recorded its first recession in a decade, meaning its economy has contracted for two consecutive quarters. Here's a look at how Hong Kong's quarterly gross domestic product (GDP) growth has fared during the past two years.

Tehran's Next Move: "We don't want an Islamic Republic, we don't want it," was the chant heard among some protesters in Tehran over the weekend after the government announced a 50 percent fuel price hike meant to fund broader support for the country's poor. Under crippling US sanctions, the country's economy has plummeted, unleashing a "tsunami" of unemployment. What started Friday as nationwide economic protests took on a political coloring, as protestors in some cities tore up the flag and chanted "down with [Supreme Leader] Khamenei!". The unrest seems to be related, at least indirectly, to widespread demonstrations against Tehran-backed regimes in Iraq and Lebanon as well. Economically-motivated protests erupt in Iran every few years, but they tend to subside within weeks under harsh government crackdowns. So far, the authorities have shut down the internet to prevent protestors from using social media to organize rallies. But Iran's powerful Revolutionary Guards Corps has warned of more "decisive action" if the unrest continues.

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13 billion: Building a single state-of-the-art US aircraft carrier costs about $13 billion, a figure that exceeds total military spending by countries like Poland, the Netherlands, or Pakistan. But as China's ability to hit seaborne targets improves, the Economist asks if carriers are "too big to fail." (Come for that, stay for the many strange Top Gun references in the piece.)

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