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In a rush to offer more hardships to China, as promised earlier in the week, US Secretary of State Mike Pompeo announced several restrictions over Chinese diplomats’ in the US. The Hill came out with the details suggesting, “Under the new restrictions, senior Chinese diplomats will need approval from the State Department to visit American university campuses and meet with local government officials.”

In response to the news, the Chinese Embassy Spokesperson said that the US moves are requiring Chinese diplomats to register ‘yet another unjustified restriction’.

Key quotes

Approval will also be required for cultural events for more than 50 attendees happening outside the Chinese embassy or consular posts.

The State Department last year placed restrictions on Chinese diplomats in the U.S., requiring them to notify the agency of any meetings with local government officials or events on university campuses, though prior approval was not required.

Pompeo said State is taking further steps to label embassy and consular social media accounts as Chinese government accounts. Twitter last month began labeling foreign government social media accounts, including Chinese diplomatic accounts in the U.S.

The secretary said the State Department’s actions are in response to restrictions on American diplomats who he said are subject in China to ‘a system of opaque approval processes’ that limit their ability to freely interact with Chinese society, on university campuses, with the press and on social media.

‘We’re simply demanding reciprocity,’ he said. ‘Access for our diplomats in China should be reflective of the access that Chinese diplomats in the United States have and today’s steps will move us substantially in that direction.’

FX implications

The news adds to the already strained relations between the US and China, which in turn should have weighed on the market’s risk-tone sentiment, which in turn becomes the logic behind the recent halt in the AUD/USD and AUD/JPY recoveries.

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