Regional Integration Trends
The US-led trade war is escalating on a weekly basis, if not daily. Mr Trump is breaking all the rules of international engagement and diplomacy. It doesn’t matter whether you are a geopolitical ally of the US or an enemy. The deepening political crisis between the US and NATO ally Turkey and renewed sanctions against Russia have shown that. In Mr Trump’s world there are no friends, only foes. In Asia Japan and Korea are finding out that the US under Mr Trump’s leadership is no longer a reliable trading partner or political ally. China probably realised this sometime ago.We live in interesting times, is one way to look at it. Put bluntly it is downright scary. In Asianomics Special Report, No.6/2018, Regional integration trends, 20 August we look at how the Asia is likely to and in fact is already starting to respond to rising US protectionism. Intra-Asian economic, trade and capital linkages have strengthened, especially since the global financial crisis. This was inevitable. We believe that rising US protectionism could prove a powerful catalyst for Asian companies to expand regionally, for Asian countries to put aside historical differences and deepen cooperation and for China to push ahead with BRI faster.
In this uncertain world, this would be a boon for investors. Accelerated regional integration would throw up exciting new investment opportunities. If there is one region in the world that can survive Mr Trump and prosper, it is Asia.
Sharmila
Asianomics, founded by Dr Jim Walker in 2007 and based in Hong Kong, specialises in economic analysis research, cross-referencing their work with credit cycles, profit cycles and cash flows. Asianomics focus is on developments in the Asia-Pacific region, and they also cover developed markets like the US and Europe.
The Austrian Economics model provides a framework for the economic research. The basis of the School of Austrian Economics is that economies work more efficiently and effectively when companies and individuals are free from excessive interference by government and special interest groups. The Asianomics economic research team includes Deputy Chief Economist Sharmila Whelan who is recognised for non-consensus thinking and her depth and quality of primary research, and Chief Economist Dr. Jim Walker.
Asianomics’ subscribers have access to regular economic commentary, stand-alone Country Reports, Special Reports and Investment Strategy Reports. Dr. Jim Walker also provides weekly webcasts.
Dr. Jim Walker is regarded as one of Asia’s leading economists. Prior to setting up Asianomics, he was the Chief Economist at CLSA Asia-Pacific Markets, where he worked for more than 16 years. He has achieved numerous ‘Best Economist’ rankings in the Asiamoney, Institutional Investor and Greenwich surveys of fund managers.
Previous successful calls include:
- In 1995 Dr. Jim Walker wrote about the prospect of Asia being forced off its de facto dollar peg “within the next two-three years”. The Asian Crisis, precipitated by the Thai baht devaluation, began in July 1997.
- Forecasted the US 2007 downturn and financial sector meltdown in series of ‘Apocalypse’ reports.
- Called early the upswing in the Indian stock market in the final quarter of 2013.
Recent Recommendations:
- Overweight China - We are overweight Chinese equities with momentum improvement in the economy.
- Short Sterling, Long Renminbi - China’s currency offers good upside with a positive carry.
- Short European Financials, Long Indian Financials - This is the simplest pair trade to play superior demographics and growth in Asia relative to the region with the biggest problems.
- Long EM Asia, Short Developed countries - South and SE Asia, and direct investors from North Asia, are ‘buy and hold’ investment bets.
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