'Byd can become the world's largest car manufacturer'
"It has unparalleled size and a cost advantage. Among other companies, Alibaba is undervalued and Tal Education has growing profits."
3' min read
Key points
3' min read
US tariffs will ultimately not stop China, which is focusing on domestic growth, favours trade agreements with other countries and has a stock market with upside potential. This is explained by Jian Shi Cortesi manager of Gam.
In concrete terms, what is the impact on Asia and China of the renewed trade war with the US?
A new trade war between the US and China would put pressure on Chinese exports, disrupt supply chains, and push China to let the yuan depreciate against the US dollar. The agreement reached by Beijing and Washington in May eased the pressure, but uncertainty remains given the volatility of US policy. Therefore, we continue to expect China to enjoy a very favourable policy environment this year to stimulate domestic demand and support innovation growth. In Asia, countries linked to Chinese supply chains may experience short-term disruptions, while South-East Asian countries may benefit from production transfers.
China has suspended exports of heavy rare earths and magnets, what are the economic repercussions for the US and EU?
This could cause production disruptions and increased costs for automotive, aerospace, semiconductor and defence companies in the US and EU, weakening their long-term competitiveness in the global market. Although the US and EU are likely to accelerate efforts to secure alternative supplies, short-term vulnerabilities are high. There are no winners in the trade war. A reduction in trade tensions could allow China to ease restrictions.
What measures can China take?
In the face of tariffs, China will emphasise domestic growth and greater trade openness. China presents an opposite approach to the US's deglobalisation moves, as it is committed to reducing trade barriers with other countries to promote increased world trade.
What are the opportunities for Europe and how can Europe-China relations evolve? And Italy in particular?
China is working to increase economic cooperation with all countries willing to grow trade and investment together. China and Europe have win-win potential due to the combination of scale, innovation and capital in many sectors, particularly in green tech, electric vehicles, batteries, healthcare, sustainable agriculture, smart manufacturing and tourism. Italian products (representing cultural heritage, quality, craftsmanship and design) have huge market potential in China if Italy is open to seize the opportunity to build a mutually beneficial trade relationship with China.
