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China’s Global Times recently quoted the State Councillor and Foreign Minister Wang Yi as he spoke to the state media during the yearly interview. The Chinese diplomat emphasized on the US need to work to restore trust established between the two countries in the past four decades.

Key quotes

“Nobody or no force can prevent the 1.4 billion Chinese people’s steps toward modernization.”

“China is always willing to find solutions through negotiation and dialogue on the basis of mutual respect.”

“Cooperation benefits both while fight damages both,”

“We hope the US side can re-establish a proper acknowledgment of China and return to practical policies in regard to China,”

FX implications

Comments like this from Chinese diplomats signal the on-going rift between the US and Beijing. Even if the year-end trading lull is restricting the market’s reaction to the news, such headlines negatively affect traders’ risk-taking capacity and favor the safe-havens.