Jason Liu: «China Could be Somewhat More Resilient»
While Donald Trump's tariffs are creating more turbulence, China’s economy has restructured even before the current US presidential term to better withstand shocks, according to Deutsche Bank's Jason Liu.
The global trade environment remains uncertain, most notably between the US and China. Despite an interim deal that saw US tariffs on Chinese imports fall from 145 percent to 30 percent, the situation remains fluid. This is especially the case due to ongoing geopolitical risks such as the recent Israel-Iran conflict with Washington backing the former and Beijing having strong ties with the latter.
«Going forward, if there are some breakthroughs in the negotiations between US and China, I think that could actually bring some stabilization for the export sector,» said Jason Liu, head of CIO office, APAC at Deutsche Bank Private Bank, during a media briefing attended by finews.asia.
Longer Supply Chain
Regardless of whether or not trade with the US improves, China has been positioning itself to withstand such export shocks. Since 2021, Chinese trading with the global south has grown by more than $200 billion, accounting for more than half of its trade surplus. Liu also notes the trend of rerouting between China and other economies, such as Vietnam, which could further offset risks.
«China could be somewhat more resilient than before because there are a lot of exports going to emerging markets,» Liu explained. «Overall, I think China's foreign trade supply chain is getting longer now compared to the past. And in other words, it's also getting more resilient in terms of tariffs.»
Dollar Weakening Support Asia EM
On top of trade resilience contributing to Asian equities, Liu also underlined a major historical driver in the exchange rate with the greenback.
«Next 12 months, we do expect the US dollar to remain relatively weak and that's actually overall supportive for emerging market equities,» Liu noted.
«In the near term we think, of course, US-China discussions on tariffs could actually affect the market sentiment. But if you look at six to 12 months in the medium term, I would say we're still quite positive on Hong Kong, China equities, and especially on the tech side. For India, we also have a positive view on Indian banks.»
