chapotraphouse

The key here is the joint venture, because it opens up the possibility for a US-China joint venture inside China as well.

Read my comment here in the news mega for how the US can potentially play this game.

If the US says you share your TikTok algorithm with us, and you let Meta inside China and we share some of our AI technology with you and lift the other AI restrictions Biden has put into place, will you take it?

If the US says what if Meta/some US tech companies invest $100 billion into China to help boost your domestic consumption, will you take it?

If the US says, we will cut the Fed rates further in 2025 to help alleviate your local government debt burden, will you take it?

In other words, the stick is mutually assured destruction - if you don’t want to play ball, I’ll make the situation so much worse for both of us. The carrot is you give us some of what we want and we promise not to further our threats, and we both come out of this with our respective PR wins. You have 1.4 billion of people to take care of, think about them.

It’s a classic dilemma of “saving your economy” and “preserving or giving up parts of your sovereignty” for China. There are going to be red lines, and there are going to be compromises. All the tariffs, sanctions and bans set the initial conditions for negotiations that can then be bargained down to a point where both sides are satisfied with.