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Biden, Xi chat cheers markets but risks still abound

The mood music accompanying Joe Biden’s virtual summit with Xi Jinping was a loudly ticking clock.

Time is most certainly not on the side of US President Biden as inflation appears to rise as quickly as his poll numbers tank. Economic angst – and political gridlock – clouds his ability to put wins on the reform scoreboard ahead of Congressional elections a year from now.

The ticking Xi hears is that of a closing window to ensure today’s upswing in Chinese markets is backed up by fundamentals ahead of his long-planned coronation as the first three-term Chinese leader.

As Covid-19 risks flare up anew, domestic default risks abound and global recoveries disappoint, Xi is juggling more challenges than ever before.