About $250 billion in economic deals were announced during President Trump’s state visit in China on Thursday.
Here was Chinese President Xi Jinping:
“Just now, the president and I witnessed the signing of some major cooperation agreements by our businesses.”
“This is the way that China operates,” says Alan Wheatley, an Associate Fellow for Global Economics at the London think tank, Chatham House.
“They group together lots of deals that are in the works, they group them all together into one big headline numbers that will impress the visitor.”
The most consequential of Thursday’s deals was a $43 billion announcement by three Chinese energy firms to purchase liquified natural gas, or LNG, from a yet-to-be-built production site in Alaska.
Eager to announce a deal, energy-hungry China and energy-rich America proved a good match, explains Kerry-Anne Shanks, head of Asia gas analysis for the energy analysis firm Wood Mackenzie.
“US exports are rising very fast, and Chin’s imports are rising very fast, so naturally, LNG trade between the two nations will increase over time.”
Even better, construction of the Alaska LNG project would be both labor-intensive, meaning Trump could tout major job creation, as well as requiring long-term contracts to keep operational, meaning revenues could stretch out for years.
But for all the hype over the Alaska project, Shanks said China values flexibility in its dealings and can buy gas from a lot of countries. And that means the “deals” announced Thursday are far from final.
“We definitely think there’s a slice of the cake to be had for U.S. LNG exporters, but it might be a quite small slice of a very big cake.”