Today's State visit by Pres. Hu of China to the White House played to a light and fidgety crowd.
Top GOP members of Congress are passing on attending this evening's State dinner. China has
lost in the court of American public opinion, and this will make dealings between the two countries
far more difficult going forward. Now that most Americans are leery and distrustful of China, the
way will be open here for politicians to scapegoat and demagogue on China. China public
opinion has been adverserial to the US for years, and now that sense of a formidable adversary
will be reciprocated. Focus is strengthening in the US on the issues of jobs seen lost to China,
an ever rising level of subpar quality goods from China (toys, pharma, construction materials)
and questions over just how tightly the civilian side of China's gov. controls its military.
Although it is doubtful that a broader deterioration in the foundation of the US - China relation-
ship will have consequences for the capital markets in the year ahead, we are starting a new
and more tense chapter.
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