Will the war continue? We hope so.

"China's vaunted economic managers aren't infallible -- and they're currently making a familiar mistake," wrote A Polk. The government is sending mixed messages as "they're instructing banks to continue improving risk management and balance sheet control, even as they push out an increasing portion of their loans to small businesses. The latter carry higher credit risk, almost by definition." The Indian government is to force public sector (PSU) banks to facilitate loans of up to Rs 10 million to small and medium businesses (MSMEs) in less than an hour. This despite bad loans at PSU banks rising to 15.6% of total loans, according to the Reserve Bank. Total bad loans at listed banks is in excess of Rs 10 trillion. Bad governments seem to react the same way. Small, city level banks were ordered to increase loans to small businesses by Pan Gongsheng, a deputy governor of China's central bank. But these small banks borrow from the inter-bank market which is contracting because of measures to reduce risks in the banking system. Profit growth of Chinese companies is falling and debt levels are shrinking. "Easy access to funds had long fueled growth for mainland Chinese firms but a concerted campaign by authorities to rid the financial system of excess liquidity and rein in irrational corporate expansion is taking its toll." Then there is the trade war between the US and China. The just concluded APEC summit in Papua New Guinea ended with no joint statement at the end because of a war of words between Chinese President Xi Jinping and the US Vice President Mike Pence. Pence accused China of "tremendous barriers" and "tremendous tariffs" and "as we all know, their country engages in quotas, forced technology transfer, intellectual property theft, industrial subsidies on an unprecedented scale". Xi defended China's right to do all that. Trump may meet Xi at the G20 conference in Buenos Aires later this month, but after the bad temper shown at the APEC summit little is expected. The actual worry of the US is that China is going to overtake it in technology, by stealing trade secrets through spies, by hacking, and by inserting malware capable of diverting information into telecom equipment, wrote N Chanda. Xi Jinping is the man responsible for the cold war between the US and China and the US would have reacted even if Trump was not the president, wrote M Schuman. US presidents have been kowtowing to China since Richard Nixon, wrote B Chellaney. Obama was not given a staircase to descend from his aircraft and had to use a rear exit. We hope that Trump is able to hit the Chinese where it hurts.