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Gavekal Research
Dan Wang
Aug 04th 2020
The Assault On Chinese Tech
After a whirlwind of negotiations, the US government may have succeeded in forcing the sale of TikTok’s US operations to a US company. The US earlier used national-security grounds to restrict the business of Huawei. Both companies still have large domestic businesses, but US government actions over the past year may mark a peak for the global expansion by Chinese tech firms.
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Gavekal Research
Vincent Tsui
Jul 31st 2020
Not All Tech Markets Are Created Equal
Aided by lockdown effects, Big Tech has rolled out some stellar results. Self-isolating consumers have replaced devices and devoured cloud computing services, spurring a new upgrade cycle. Such demand has boosted Asia’s tech supply chain, but surging hardware demand is about to become more specific, with some segments facing excess supply and others sustained tightness.
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Gavekal Research
Anatole Kaletsky, Arthur Kroeber, Tan Kai Xian
Jul 31st 2020
Webinar: Global Investment Roundtable, July 2020
In our monthly Global Investment Roundtable, US analyst Tan Kai Xian analyzed the latest US data and assessed the risk that the present economic stall-out turns into a double-dip recession. Arthur Kroeber explained why the Trump Administration has amped up its Cold War rhetoric on China. Anatole Kaletsky tied it all together and tried to explain the recent movements in global markets.
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Gavekal Dragonomics
Xiaoxi Zhang, Wei He
Jul 30th 2020
Questions On The Digital Renminbi
The People’s Bank of China is on the way to becoming the first central bank in the world to launch a digital currency. The idea of a digital renminbi has sparked a huge amount of interest, but confusion and speculation are rampant. In this Q&A, Xiaoxi and Wei provide clear answers to some of the big questions about the digital currency.
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Gavekal Dragonomics
Rosealea Yao
Jul 29th 2020
Construction’s Surprising Resilience
After a robust recovery in construction following the Covid-19 lockdown, the big question now is whether this growth rate is sustainable. Using a rolling sum of construction starts, Rosealea posits that construction should slow only moderately in the second half, providing room for steel demand to continue growing for the rest of 2020.
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Gavekal Research
Dan Wang
Jul 29th 2020
Video: The Hong Kong Sanctions Regime
As US-China tensions amp up, Hong Kong faces US actions in response to the national security law imposed by the Chinese government. This includes an end to preferential trade treatment and penalties for foreign financial institutions that transact with officials found to be undermining the city’s freedoms. In this video interview, Dan explains how the program will play out and addresses the question of whether the US government will target Hong...
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Gavekal Dragonomics
Gilliam Collinsworth Hamilton
Jul 28th 2020
How To Contain A Lingering Virus
China is seeing its highest number of daily new locally transmitted Covid-19 cases since March, and government officials are rushing to contain the outbreak. In this Quick Take, Gilliam explains how China has developed a standard containment strategy to handle this and future outbreaks while minimizing economic damage.
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Gavekal Research
Arthur Kroeber
Jul 24th 2020
Edging Toward A New Cold War
The US decision to close China’s consulate in Houston is a big deal. The precise motivations are obscure but the story is not: the Trump Administration is turning up the heat on China before the US presidential election. In the next few months Washington is likely to make new moves pushing the US closer to a Cold War posture against China.
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Gavekal Dragonomics
Andrew Batson
Jul 24th 2020
Macro Update: The Supply-Side Recovery
China has rapidly bounced back from its Covid-19 lockdown, but the recovery has been an unbalanced one with supply outpacing demand. Economic policy has also turned more cautious amid exuberance in property and financial markets. In this regular chartbook, the Dragonomics team outlines how the next stage of China’s recovery will proceed.
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Gavekal Research
Anatole Kaletsky
Jul 23rd 2020
Do Bubbles Predict Or Project?
With the second quarter data season now in full swing, the rebound in equity prices that followed the Covid-19 panic seems to have stalled. So, what happens now? In this piece, Anatole follows up on Louis’s recent efforts to define reasons for the surge in equity values and proposes a fresh explanation centered on the nature of bubbles.
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Gavekal Dragonomics
Rosealea Yao
Jul 22nd 2020
The Marginal Impact Of Housing Renovation
The State Council recently announced a nationwide target to renovate 39,000 antiquated residential compounds in 2020, improving accommodation for 7mn total households. In this Quick Take, Rosealea explains how the target will provide space for local governments to further tighten property policy without upsetting China’s economic recovery.
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Gavekal Research
Louis Gave
Jul 21st 2020
The Consequences Of ‘Worthless Cash’
In the second quarter of this year, global equity markets registered their best quarterly performance in two decades. In this, the third paper of a series about the record-breaking rebound, I will consider the possibility that the present growth in monetary aggregates is leading investors to conclude that they have no alternative.
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Gavekal Dragonomics
Dan Wang
Jul 21st 2020
The Next Steps In US-China Decoupling
As the US election approaches, the Trump Administration is intensifying pressure on China on all fronts. In this report, Dan outlines the executive-branch agencies tasked with implementing sanctions and restrictions, what they have accomplished so far, and what tools are at their disposal should Trump decide to further escalate the situation.
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Gavekal Research
Charles Gave
Jul 21st 2020
Toward A Renminbi-Gold Standard
As the international trading and monetary order of the last 50 years continues to crumble, the endgame must be the US dollar losing its lofty position at the apex of the system. Louis and I have argued that this process began in and around 2005 as the US moved to “weaponize” the dollar, thereby ensuring the renminbi’s emergence as a competitor.
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Gavekal Research
Vincent Tsui
Jul 17th 2020
Unpicking The Tourism Effect
Despite a worsening Covid-19 situation in many big developing economies and concerns over central banks’ monetization responses, emerging market investors continue to climb the wall of worry, betting that a putative “second wave” does not stymie the recoveries of developed economies and China. But another challenge for EM economies is a collapse in foreign tourism.
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Gavekal Dragonomics
Thomas Gatley, Rosealea Yao, Wei He, Xiaoxi Zhang
Jul 16th 2020
The Recovery Tapers Off
Although Q2 GDP growth rebounded strongly after Q1’s significant contraction, sequential growth slowed considerably into June. In this Quick Take, Thomas, Rosealea, Wei and Xiaoxi report on why despite this latest rebound it will be difficult for the country to maintain its upward momentum as it moves into Q3.
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Gavekal Research
Vincent Tsui
Jul 16th 2020
Video: Singapore's Policy Path
Just days after securing another five years in power at the ballot box, Singapore’s government announced that the island republic’s gross domestic product contracted a worse-than-expected -12.6% year-on-year in the second quarter. However, with large accumulated fiscal reserves, the government has considerable scope to spend in order to stimulate Singapore’s economy.
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Gavekal Research
Tom Miller
Jul 15th 2020
Pick Your Side
The British government’s decision to block Huawei from the UK’s 5G mobile network, confirmed yesterday, is further evidence that the post-Covid world is splitting into two opposing security blocs. International distrust of China is hardening along ideological lines, spurring liberal nations to prioritize national security over economic growth.
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Gavekal Dragonomics
Dan Wang
Jul 14th 2020
A Bumpier Road To Semiconductor Supremacy
The Chinese semiconductor industry has made substantial progress over the last year, making credible gains in both design and production—despite attempts by the US to stymie China’s advancement. In this report, Dan explains how the US has escalated its anti-China campaign and outlines the rough road ahead for the industry.
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Gavekal Research
Tom Miller
Jul 14th 2020
India’s Pharma Problem
India, the world’s pharmacy, is in danger of running out of drugs. The source of the danger is India’s deteriorating relationship with China, which provides up to 70% of the bulk ingredients for India’s pharmaceutical industry. Most Indian pharma makers hold at least two months of stock, but if the situation is not resolved, the global pharma supply chain could be disrupted.
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