The New Cold War & Investment Post the U.S Election: How Will Geopolitics Impact Investment Returns & Asset Allocation?
Delft Partners thought that you should listen to two macro economists discuss the Geopolitical backdrop to investing in Asia. Please click with the password and watch below. This is a webinar between Stewart Paterson of Hinrich (https://www.hinrichfoundation.com/), Capital Dialectics, (and also ex HF manager and CS Asia head of AA) and Russell Napier an economist and asset strategy adviser.
We do not share all of their views, but we do invest on the basis that Asia and the USA will again engage with China aggressively but now through the usual channels, and that National Industrial Policy (NIP) is likely to be implemented in most economies. NIP essentially means that addressing the concerns of domestic populations will become a bigger part of policy making frameworks. Such a change will create investment opportunities such as capital investment to create duplicate sourcing supply chains, large scale capital stock investment, and tactical tariffs and tax breaks to shift production 'back home'. It has already started. Donald Trump's use of the Defense Production Act 1950, to force American companies to make respirators and face masks was perhaps the first example? The change to NIP needs to be discounted by the market and it has not yet been. The next 5 years will not be like the last 10.
This webinar is provocative and thorough in its assessment of how China will react to concerted and coordinated political pressure (the Quad Alliance) and its response to a reduction in inward foreign direct investment as reliance on China is strategically reduced by G20 countries.
It is kindly provided by ERIC which is a 'free to use' Independent Global Research Marketplace for Professional Investors. www.eri-c.com
ERIC runs a rolling programme of 'Introductory Talented Analyst webinars' on topics of investor interest to showcase high-quality research providers to its registered Professional Investor users.
To access the ERIC site and the programme, Professional Investors can register using this link: https://www.eri-c.com/register?forwardTo
If you wish to contact ERIC through Delft we can facilitate
Interestingly the CEO of Intel, the USA based technology equipment maker and designer, wrote an open letter to President elect Joe Biden yesterday. The argument for a National Industrial Policy is now being adopted by a number of high profile business leaders. This return to NIP will increasingly create new investment opportunities.
We attach a sample paragraph here.
"Your planned investment in American-made goods is critical to U.S. innovation and technology leadership. According to the Semiconductor Industry Association, the U.S. accounts for just 12% of global semiconductor production capacity, with more than 80% taking place in Asia. Rising costs and foreign government subsidies to national champions are a significant disadvantage for U.S. semiconductor companies that make substantial capital investments domestically. A national manufacturing strategy, including investment by the U.S. government in the domestic semiconductor industry, is critical to ensure American companies compete on a level playing field and lead the next generation of innovative technology."
'The New Cold War & Investment Post the U.S Election: How Will Geopolitics Impact Investment Returns & Asset Allocation?'
Webinar Replay Link & Passcode: https://us02web.zoom.us/rec/share/jbdMauXqDhNTGC-6kxCH1RP8ut47mLQGY8rUN0D_C8dY9mhDXCU40z7m7D-WXqg2.RQwk_u_APhwEfrv6