Sino-American tussles: Beijing rejects Sherman’s meeting, US to sanction China diplomats

Early Friday, Retuers came out with the news, relying on two people with knowledge of the situation, to suggest that the US is up for fresh sanctions on the Chinese diplomats over the Hong Kong issue.

“The United States is preparing to impose sanctions on Friday on a number of Chinese officials over Beijing’s crackdown on democracy in Hong Kong, as well as a warning to international businesses operating there about deteriorating conditions,” said the news.

Additional details from Reuters, per their sources, signal, “Sanctions would target seven officials from China’s Hong Kong liaison office, the official platform which projects Beijing’s influence into the Chinese territory.”

On the other hand, Financial Times (FT) came out with the headlines suggesting China’s reaction to the US signals of sanctions.

Key quotes

Beijing has snubbed the US by refusing to grant Wendy Sherman, deputy secretary of state, a meeting with her counterpart during a proposed visit to China that would have been the first top-level engagement since acrimonious talks in Alaska.

The US halted plans for Sherman to travel to Tianjin after China refused to agree to a meeting with Le Yucheng, her counterpart.

The US viewed the Sherman visit as a possible stepping stone to a China visit by Blinken that would set the stage for President Joe Biden to hold his first meeting with Xi at the G20 summit in Italy in October.

Market reaction

With the news exerting additional downside pressure on the market sentiment, S&P 500 Futures drop 0.10% to 4,347 by the press time. Additionally, the risk barometer in Asia, namely the AUD/USD pair, also fades the corrective bounce off 0.7409 around 0.7425 by the press time.

Read: AUD/USD struggles to defend 2021 bottom around 0.7400 on sour sentiment