Korea Funding Corp on U.S.-China tensions, tech nationalism
That is partly as a result of relations are unlikely to shift within the close to time period, mentioned Choi Heenam of Korea Funding Company.
“The U.S.-China dispute is not simply political,” he instructed CNBC’s Tanvir Gill on the primary day of the Singapore Summit. “It is a hegemonic battle based mostly on structural issues reasonably than political curiosity.”
“I feel it would proceed to be an overhang for the worldwide economic system, however in the end, not harmful,” he mentioned on Monday.
He mentioned he does not see U.S. hawkishness towards China altering a lot after the presidential elections in November as a result of there’s bipartisan help for Washington’s present coverage towards Beijing.
“With that in thoughts, we do not have to be too bearish in regards to the market, even when tensions between the 2 international locations escalate. As an alternative, we have to make the most of the ‘risk-off’ mode out there, if there’s any.”
A risk-off state of affairs is when traders are much less tolerant to dangers and dump belongings, pushing down costs.
Choi additionally weighed in on the rise of protectionism and mentioned it will “positively hinder” the event of recent applied sciences.
“Because the pure results of the pandemic disaster, extra international locations … have a tendency to focus on nationwide curiosity reasonably than world curiosity,” he mentioned. “Which means tech nationalism goes to be intensified. That could be very unhealthy information for corporations.”
Along with their commerce dispute, the U.S. and China have additionally been locked in a know-how warfare, with Washington placing strain on Chinese language know-how corporations.
The U.S. is making an attempt to cease Chinese language corporations, reminiscent of smartphone maker Huawei, from buying vital elements. The U.S. Division of Protection mentioned this month it could blacklist Semiconductor Manufacturing Worldwide Company, China’s largest producer of semiconductors.
Choi mentioned Korea Funding Company tends to speculate extra in American know-how corporations, however acknowledged that there is “apparent aggressive benefit” for some Chinese language corporations. KIC must strike the correct stability between each international locations, however “harmful” forces could cause corporations to lose their aggressive edge, he mentioned.
“That is going to hinder our funding curiosity,” he mentioned. “My concern is de facto on that concern, so my hope is that all the things goes to be solved peacefully and simply.”