[Originally posted in 2017] To understand the China ‘One-Belt / ‘One-World‘ economic trade strategy it becomes necessary to understand how structurally weak the Chinese economy was when created.
People often talk about the ‘strength’ of China’s economic model; and indeed within a specific part of their economy -manufacturing- they do have economic strength.
However, the underlying critical architecture of the Chinese economic model is structurally flawed and President Trump with his current economic team understand the weakness better than all international adversaries.
Lets take a stroll and lightly discuss.
China is a central planning economy. Meaning it never was an outcropping of natural economic conditions. China was/is controlled as a communist style central-planning government; As such, it is important to reference the basic structural reality that China’s economy was created from the top down.
This construct of government creation is a key big picture distinction that sets the backdrop to understand how weak the economy really is.
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Steve Bannon appears on CNBC to discuss the economic objectives of China and how President Trump and USTR Lighthizer are confronting three very important convergences.
Bannon does a good job outlining the three Chinese priorities: ¹One-belt, one road; ²Made in China 2025; and ³Huawei 5G rollout; and how those efforts conflict with U.S. interests.

Something slightly delayed next week’s schedule by a few days.  Quite possibly the issue with the “Sanctions”, discussed yesterday.  However, that said, the next two face-to-face discussions between USTR Lighthizer and Vice Premier Liu He have been scheduled.

Statement from the Press Secretary – At the direction of President Donald J. Trump, United States Trade Representative Robert Lighthizer and Secretary of the Treasury Steven Mnuchin will travel to Beijing, China, for principal-level meetings starting on March 28, 2019, to continue negotiations aimed at improving the trade relationship between the United States and China.

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Yesterday the U.S. Treasury announced sanctions against two Chinese shipping firms for violating ongoing sanctions against North Korea [TREASURY HERE].
With USTR Robert Lighthizer and Secretary Mnuchin set to travel this weekend to Beijing for ongoing trade discussion, the sanction timing complicates the dance with the dragon. Subsequently President Trump sends the following tweet:

Slamming China with sanctions (over DPRK dragon activity) while Beijing is showing the Panda mask (during Beijing trade negotiations) is not wise. If the Panda mask drops during trade negotiations to reveal the Dragon face, then ok. However, the majority of the West, driven by a misunderstanding of the China-DPRK relationship, does not know how directly a manipulative Beijing controls Pyongyang.
Taking aggressive sanction action against China could backfire with Beijing ordering those around Chairman Kim to test a missile.
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Shortly before the president signed an executive order on affirming first amendment rights on college campuses yesterday, President Trump sat down for an extensive interview with Maria Bartiromo.
The interview covers a wide range of topics with a primary focus on the U.S. economy, ongoing trade discussions and issues that impact the U.S. workforce. One of the granular issues that surfaces is a subject we discuss frequently, the value of the ‘chicken tax‘; the 25% tariff on imported trucks and SUV’s.   WATCH:

President Jair Bolsonaro and First-Lady Michelle Bolsonaro are staying at the Blair House as guests of President Donald Trump and First-Lady Melania Trump.  They will be meeting together tomorrow.
Tonight at 11:00pm Fox News host Shannon Bream has an exclusive interview with President Bolsonaro from the Blair House.   Additionally, the White House has provided some background details that highlights the importance of the summit.

[White House Briefing] SENIOR ADMINISTRATION OFFICIAL: Hey, good afternoon. So obviously, tomorrow, the Brazilian President Jair Bolsonaro will be meeting with President Trump. Clearly, we have seen, since day one, President Bolsonaro’s election as a real opportunity to fundamentally remake our relationship with Brazil.
This is something that we have been doing since day one, in which, within an hour of President Bolsonaro being — at that time, President-elect Bolsonaro being confirmed as the President-elect, President Trump called him, was on the phone with him. A couple of weeks later, National Security Advisor John Bolton went down to Rio to visit with him. Secretary of State Pompeo led the delegation to his inauguration.
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LOL, an interesting albeit typically lighthearted discussion with CEA Chairman Kevin Hassett on the budget proposal and status of U.S.T.R trade talks with China.

China has no cultural or political space between peace and war; they are a historic nation based on two points of polarity.  They see peace and war as coexisting with each other.
China accepts and believes opposite or contrary forces may actually be complementary, interconnected, and interdependent in the natural world, and they may give rise to each other as they interrelate to one another.  Flowing between these polar states is a natural dynamic to be used -with serious contemplation- in advancing objectives as needed.
Peace or war. Yin and Yang. Panda or Dragon. Culturally there is no middle position in dealings with communist China; they are not capable of understanding or valuing the western philosophy of mutual benefit where concession of terms gains a larger outcome.  If it does not benefit China, it is not done. The outlook is simply, a polarity of peace or war.  In politics or economics the same perspective is true.  It is a zero-sum outlook.
Acting Secretary of Defense Patrick Shanahan and Chairman of the Joint Chiefs of Staff General Joseph Dunford confirm to the Senate Armed Services Committee that Google’s work in China is directly benefiting the government and Chinese military.

When Senator Chuck Schumer said the “intelligence community has six ways to Sunday to get back at you“, few realized he meant the IC were treasonous spies and the “you” was our country.  An official within the DIA from 2014 to 2018 was selling U.S. intelligence secrets to China and he plead guilty today (full pdf below).
(Justice Department) Ron Rockwell Hansen, 58, a resident of Syracuse, Utah, and a former Defense Intelligence Agency (DIA) officer, pleaded guilty today in the District of Utah in connection with his attempted transmission of national defense information to the People’s Republic of China. Sentencing is set for Sept. 24, 2019.
Assistant Attorney General for National Security John C. Demers, U.S. Attorney John Huber for the District of Utah and Special Agent in Charge Paul Haertel of the FBI’s Salt Lake City Field Office announced the charges.
Hansen retired from the U.S. Army as a Warrant Officer with a background in signals intelligence and human intelligence. He speaks fluent Mandarin-Chinese and Russian. DIA hired Hansen as a civilian intelligence case officer in 2006. Hansen held a Top Secret clearance for many years, and signed several non-disclosure agreements during his tenure at DIA and as a government contractor.
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The Bureau of Labor Statistics (BLS) released some important data today surrounding the state of the U.S. economy. The first release shows the current CPI (consumer price index) or rate of inflation:

(BLS Release) […] The all items index increased 1.5 percent for the 12 months ending February, a smaller increase than the 1.6-percent rise for the 12-months ending January. The index for all items less food and energy rose 2.1 percent over the last 12 months, a slightly smaller figure than the 2.2-percent increase for the period ending January. The food index rose 2.0 percent over the past year, its largest 12-month increase since the period ending April 2015. In contrast, the energy index declined 5.0 percent over the last 12 months. (read more)

As noted above, energy prices are 5.0% lower year-over-year; this is a significant reason for the current low inflationary rate.  Also energy prices (fuel, gas, oil) disproportionately impact the middle-class as an unavoidable cost.  Lower gas prices (currently down 9.1%) help middle-America, and also have a downstream impact of lowering product transportation costs.
An overall annual rate of inflation at 1.5 percent is exactly on target.  CTH has been predicting this energy-based outcome for more than three years:
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