But if the president strikes the deal on the terms being reported, he will actually be making a huge concession to Beijing that achieves few U.S. goals, and is so bad that even Trump will have trouble spinning it as a political win.

On Thursday afternoon, several media outlets reported that the United States and China have agreed to a limited interim trade deal that will surely boost markets in the short term and provide a temporary de-escalation of the U.S.-China trade war. For more than two months, sources briefed on the negotiations told me, the two sides had been stuck. The Trump administration wanted to freeze tariffs in exchange for Beijing agreeing to purchase more U.S. agricultural products and granting more market access for U.S. financial firms. But China wouldn’t sign off, demanding the White House sweeten the pot by offering substantial tariff rollbacks, as well.

On Thursday, The Wall Street Journal reported the Trump team caved on that huge point. If true, the result would be a deal that immediately relieves major pressure on the Chinese economy in exchange for future promises the Chinese side may never fulfill. Beijing’s concessions also don’t address the bulk of the structural issues and abuses that make Chinese economic aggression a long-term threat to the U.S. economy.

Of course, we know that no Trump decision is final until he announces it. He could still reject what his officials have brought him.

“It’s all Trump’s call,” said Derek Scissors, a senior fellow at the American Enterprise Institute. “He either makes a call that’s consistent with decades of his beliefs or he’s getting played. . . . But he hasn’t gotten played unless he rolls back tariffs.”

Some reports said the interim deal includes some promises by Beijing to better secure intellectual property rights. But China has made and broken such promises many times before. Also, administration officials say the tough structural issues, including China’s economic espionage, forced technology transfer and unfair subsidies would be tackled in a subsequent Phase Two agreement. But few believe that will ever happen.

“There is pretty much consensus there’s not going to be any meaningful ‘Phase Two,’ “Scissors said.

If Trump substantially reduces tariff pressure on China as part of the Phase One deal, Beijing’s incentive to make future concessions as part of any Phase Two negotiation disappears.

The conventional wisdom is that Trump is prioritizing his reelection prospects and needs a big win to brag about on the campaign trail. That’s why he is lowering his terms for a deal. The Phase One deal was already a huge concession compared to the more comprehensive deal the two sides were closing in on in May.

If the president strikes the deal now, markets will surely go up in the short term – but late next year, the deal’s weaknesses will be laid bare. If China doesn’t do everything it’s promised by the time voters go to the polls, Trump will bear the brunt.

As the election nears, the pressure on Trump to keep the market up and avoid any crises will only increase. Beijing knows that – and it’s calculating that the U.S. president will have little leverage if China doesn’t hold up its end of the bargain.

A bad deal is worse than no deal. That’s why Trump was right when he said last week he likes the idea of waiting until after the election to make a deal with China.

“He is trying to pivot to negotiating and dealmaking for the last year of the first term. He wants to show he’s the dealmaker in chief,” said Tom Wright, a senior fellow at the Brookings Institution. “But he doesn’t necessarily need [signed] deals for that strategy to work.”

Trade hawks inside the administration have long argued that a deal on these poor terms will be a bad story for Trump – and they are right. He would be much better off turning down the deal on the table, maintaining the pressure and keeping the negotiations alive.

If he gets reelected, Trump will have all the leverage in the world to do what he’s wanted to do for more than 30 years – finally stop China from taking advantage of the U.S. economy. But if he gets played now, the best and perhaps last opportunity to pressure Beijing to really change its bad economic behavior could be lost forever.

In order to be ready and be well prepared for changing external factors, it is a need for business itself to rethink and redefine its existing way of working and step ahead in the digital era.

Prior to redefining work in practical approach, enterprises should come up with solid vision and expectation of what your future of work and organisation might look like in consideration of two major trends: a capability to handle a changing of customer expectation and preference with a wider array of options provided in the market, and a pressure of corporate performance to no longer delivering diminishing returns but increasing improvement and marginal outputs not only for customers and shareholders but also for employees to work in a better environment. These two trends significantly lead to a new non-linear value for future of work by emphasising on reorienting the organisation, systems and processes around learning, adapting and transforming in time for the changing environment. Lagging in execution seems to be a significant loss of opportunity for companies, not only to satisfy customers but also to develop itself.

Redefining work is to re-imagine what work should be shifted to create a big impact with smart moves. Big impact doesn’t mean spinning up large or major changes and creating big investment. It rather means to demonstrate a significant impact with actual planning and monitoring before, during and after execution, to ensure a success of future change and generate further momentum in a timely manner. Going with big moves without well-designed working processes, less-talented workers and unstructured organisation might create an imbalance between spending a big investment and achieving the desired results. There are three key shifts to create redefining work efficiently; shift the objective, shift the focus and shift the requirement.

First, shift the objective of work from traditional linear development, focusing heavily on efficiency and cost saving of sales and product development, to boarder non-linear value creation. Spreading an idea of transformation on both business and support functions, such as IT, HR and Finance, to optimise way of working and support sustainable growth and, at the same time, build internal development in a long term. Actions can be taken without starting from scratch or doing everything at once. Proof of concept becomes a meaningful tool to help targeting on the right issues, shortening time to identify pain points and seek out improvement opportunities.

The second is to shift the focus. The organisation needs to know how to best redefine way of working to rapidly respond to rapidly changing customer expectations and a more complex environment by freeing up workers to do more value-added and/or insight-driven activities instead of executing routine and/or standardised tasks. Digital technologies and automation are applied to optimise many processes. Robotic process automation, for example, can take part of the repetitive work. BI tools can be applied on reporting for better visualisation to support routine forecast and constant performance evaluation. Technologies give humans an opportunity to identify and address unseen opportunities that could contribute sustainable differentiation and create new value across systems, practices, and infrastructure as long as it has been used wisely.

Lastly, shift the requirement of workers beyond specific skills to build and train them on core human capabilities to learn fast and adapt quickly to context. Organisation must drive fast learning and problem-solving skills among workers and, at the same time, promote collaboration between humans and machines plus humans and humans to better address and diagnose previously unknown opportunities that have never been considered before. Then, develop roadmap, test a pilot initiative and implement quick-wins/initiatives in a timely manner.

It’s a need for business to grow and change in a promptly manner in response to external changes. Redefining work is relevant for many organisations to shift from old school practice to the future-state working culture considering three key shifts: shift the objective, shift the focus and shift the requirement across process, system and people in order to create a smart move and deliver a big positive impact on the organisation and ecosystem in a long run. It’s time for management to either plan upfront for change or stand behind.

Then, investors tend to experience a problem of excess supply and could start to lower their production as seen in the lower capacity utilisation rate and the shrinking Manufacturing Production Index (MPI). Companies cut working hours, resulting in a decline in overtime payment.

Consumers then get hit because of declining non-farm income whereas farm income remains volatile from drought and floods, affecting agricultural production.

Meanwhile, the government has tried to provide cash transfers to the poor and introduced consumption stimulus packages which could somewhat help stabilise purchasing power.

However, it may be hard to revive spending when income remains low amid weak confidence.

The BOT cut the policy rate twice this year from 1.75 per cent to 1.25 per cent while we would wait and see the transmission of higher liquidity to the financial market that could stimulate investment and consumption.

Despite rate cuts and relaxation of capital outflows by the BOT, the baht has remained strong against regional peers, deterring competitiveness on top of global economic slowdown.

Will the economy slow down further?

The National Economic and Social Development Council (NESDC) reported that the Thai economy in the third quarter of 2019 expanded by 2.4 per cent from the same period last year or increased by 0.1 per cent from the second quarter after seasonal adjustment.

The slow quarterly growth is quite alarming because Thailand could experience a technical recession — two consecutive quarters with negative quarter-on-quarter growth — if the downward trend persists.

We do not think so. We still look at the Thai economy on the bright side – continual slow growth.

Some good signs to expect in 4th quarter

Despite softening growth, there are some indicators pointing towards rebounding economic activities.

First, we could expect continual positive contribution to growth from external factors. Export growth would likely fall modestly while imports could fall more than exports, causing a large trade balance surplus.

Stronger tourism revenue could be a positive factor to growth. Local investors could run down inventory before accelerating their production, which could cause continued negative import growth for the next few quarters.

Second, investment could likely pick up, especially projects that are a collaboration between the private sector and the government or public-private partnership.

An increase in project approval by the Board of Investment (BOI) for the Eastern Economic Corridor (EEC) and other areas signalled higher private investment going forward.

However, we could watch out for residential construction as problems of oversupply could linger.

Third, private consumption grew well for tourism-related spending, such as hotels and restaurants, food and non-alcoholic beverage, whereas some items could continue slowing down amid weak purchasing power among low-income households.

Car sales may fall further amid lower consumer confidence. Fourth, public spending could be stronger to drive growth, especially when we could expect the budget bill to pass by January 2020.

Outlook for 2020 – the year of 2 Rats

The year 2020 in the Chinese zodiac is the Year of the Rat. In economic outlook, we could look at it as both positive outcome and risk factors for RAT. For positive outcome, we could expect Relocation, Active stimulus and Tourism. We could expect industry relocation from China to Thailand, especially to the EEC area to avoid the US-China trade war and use Thailand as a connectivity hub for Asean.

Investors could resume increasing their production, which could generate higher income for households and contribute to higher exports.

The government would likely be more active in terms of fiscal stimulus when the budget bill is passed by January 2020.

The BOT would likely hold the rate unchanged at 1.25 per cent throughout the year but they may cut the rate if the economy decelerates further, as they still have policy space to employ when necessary.

Tourism would likely remain a growth driver for the Thai economy, especially after the number of Chinese tourists rebounded sharply in the third quarter.

Risks that could restrain Thailand’s economic growth are real estate, the appreciating baht and the trade war.

The problem of over-supply in residential real estate with tight regulation on mortgage by the BOT could lower outlook on private construction.

The strong baht against peers could hurt exports, especially commodity exports which could subsequently lower outlook for farm income.

Tourism may suffer a slight hit from the stronger baht against peers but the number of tourists would likely grow along higher Chinese demand for travelling.

Meanwhile, at present, we don’t expect the trade war to escalate, which could allow exporters and investors to adjust themselves no matter what tariff rates could be set.

However, if trade wars escalate to higher tariffs or more countries are added to US President Donald Trump’s list or trade wars lead to currency wars and technological wars, the global economy could decelerate which could subsequently hurt Thailand’s exports and domestic market.

In sum, we would project a moderate positive outcome with low likelihood for risk factors. We projected the Thai GDP to grow by 2.7 per cent in 2020 from 2.4 per cent in 2019.

Outlook for FX and interest rate

The BOT would likely hold the rate unchanged at 1.25 per cent throughout 2020. The BOT would monitor the transmission of interest rate cut on the financial market before taking another step to loosen monetary policy.

Meanwhile, liquidity in the market is rather high due mainly to slow business loan growth, especially from small enterprises.

Consumer loan growth would likely soften from tight regulation on mortgage from the BOT together with more caution by commercial banks for fear of rising NPLs.

Thus, Thailand would not have a problem of tight liquidity which requires another rate cut.

On the other hand, Thailand’s financial market is likely to experience a challenge of stability due to the prolonged low interest rate environment which could induce investors to invest in risky assets without properly understanding risks.

Meanwhile, the BOT could encourage more capital outflows from local investors so as to allow the baht to weaken or slow the pace of appreciation against the US dollar and regional peers.

In line with the attempt by the BOT, we project that the baht would strengthen to Bt29.50 to the US dollar by year-end 2020 amid the large current account surplus.

Net exports could remain large due mainly to slow import growth from high inventory and low oil prices while tourism revenue could grow moderately from rebounding Chinese tourists.

In addition to trade flows, foreign direct investment could accelerate amid higher project approval by the BOI in line with industry relocation.