WASHINGTON (Reuters Breakingviews) - Finance services firms look sidelined as the White House focuses on finding easy China wins. Energy and industrial companies like General Electric will have a chance to cozy up to Beijing’s new leadership during U.S. President Donald Trump’s upcoming Asia trip, but Wall Street isn’t coming along. The U.S. business delegation’s composition reflects Trump’s desires to find low-hanging fruit deals to tout domestically, but low expectations for deeper concessions.
Trump arrives in Beijing next Wednesday, and the administration has been on the hunt for announcements that would make for photo ops or press releases during his visit. Companies applying to join a business delegation were queried on whether they had deals with China in the works that they could unveil while overseas, people familiar with the matter told Breakingviews. Billions of dollars in sales and investments benefitting the United States are expected. For example, one of the stars of the show will probably be Sinopec’s 700-mile pipeline deal in Texas and the U.S. Virgin Islands, which could be worth about $7 billion in investments.
U.S. corporate delegates include GE, Honeywell, Thermo Fisher and Cheniere Energy. They arrive at an opportune time to meet Chinese leaders, who just wrapped up a major party congress and rolled out new leadership slate at the end of October.
However, the United States remains locked in contentious talks over improving market access for American firms in the People’s Republic, including financial services. A senior administration official said Tuesday that progress has become more difficult. China is retrenching under President Xi Jinping, who has shown scant respect for market-based principles.
While there have been some advances on raising ownership equity caps in financial services, a deal has not been finalized, and the lack of representation by big names like Citi or Goldman Sachs on this trip suggests no major compromise is nigh. William Zarit, chairman of the American Chamber of Commerce in China, said he hoped the one-off deals don’t overshadow the need to push for structural changes.
Convincing Beijing to expose its domestic financial industry to more foreign competition is a tougher pitch than selling goods. The Trump administration is not indifferent to the financial sector’s concerns, but low expectations for photo-op concessions have kept the industry at the back of the line this time around.
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