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The last time U.S. Vice President Mike Pence took the stage to speak about the Trump administration’s China policy, his words sent shock waves through the political leadership in Beijing.

A little more than a year ago, on Oct. 4, 2018, Pence bashed China for what he called an all-of-government approach to meddling in U.S. democracy and the midterm elections that took place a month later.

Pence’s next big China speech, set for Thursday in Washington at a Wilson Center event, is coming at another crucial moment in the bilateral relationship — one where the stakes are high for him to find the right balance.

President Donald Trump is aiming to sign a limited trade deal with Chinese leader Xi Jinping next month, and a weakening American economy is chipping away at the U.S.’s leverage. Meanwhile, pressure is building from Capitol Hill to stay firm, highlighting White House moves this month to sanction Chinese entities accused of connections to the surveillance and imprisonment of more than a million Muslim Uighurs in the northwestern region of Xinjiang.

According to people briefed on Thursday’s speech, the vice president is expected to focus on human rights and religious freedom — citing Xinjiang and democracy protests in Hong Kong that for months have challenged Beijing’s rule. While the tone of his speech might be harsh, the people said he will likely conclude by calling for a peaceful coexistence. White House officials for weeks have been debating how critical Pence’s remarks should be, they added.

Jude Blanchette, a China analyst at the Center for Strategic and International Studies, said “Beijing will almost surely see this as a further indication that a hypothetical resolution of the trade frictions won’t be sufficient to re-balance the bilateral relationship.”

Washington insiders know that the speech is months overdue. Pence was originally supposed to deliver it on June 4, which marked the 30th anniversary of the Tiananmen Square massacre. After the White House tried to garner support for the speech and its significant timing around the anniversary, Trump decided to delay it — in the hopes of landing a meeting with Xi at the Group of 20 leaders’ summit in Osaka.

Pence’s rescheduled speech remains a tricky one timing-wise: The chief trade negotiators from both sides are set to hold a conference call Friday to talk about progress toward locking down phase one of a deal.

Charting the Trade War

South Korea’s economy grew at a slower pace in the third quarter, putting it on track for the smallest expansion since the global financial crisis as trade uncertainties weigh on investment. Still, the improvement in exports, which grew 4.1% in real terms from the second quarter, indicates that weakness in the global tech sector may be over the worst. 

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  • Taken to the cleaners | IRobot, the maker of the Roomba vacuum cleaner, abandoned its strategy to pass along tariff-related costs to U.S. consumers after the price increase curbed growth.
  • An unofficial boycott | The trade war has stoked a surge in Chinese nationalism and anti-American sentiment that’s increasingly swaying marketing decisions and consumer buying habits.
  • Stephanomics podcast | Why does the IMF keep lending to a troubled country like Argentina? Bloomberg’s senior executive editor for Economics discusses this and other questions.

Economic Analysis

  • French worry | Trade tensions and a disorderly Brexit pose large downside risks to France’s economy in 2020. 
  • South Korea’s struggle | The nation’s GDP growth was clipped by trade war, but the fiscal cavalry is on its way.

Coming Up

  • Oct. 25: CPB releases Global Trade Monitor
  • Oct. 28: U.S. advanced goods trade balance
  • Nov. 1: South Korea trade balance

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To contact the author of this story: Jenny Leonard in Washington at jleonard67@bloomberg.net

To contact the editor responsible for this story: Brendan Murray at brmurray@bloomberg.net, Zoe Schneeweiss

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