-
Gavekal Research
Simon Pritchard
Jun 11th 2019
The Threat To Hong Kong
On Sunday, a million Hong Kongers protested a planned law change that will let individuals be extradited to face trial in China, the city’s biggest political protest in more than 15 years. On Monday, the city’s equity benchmark rose 2%. The betting is that this political furor will pass. But the broader context puts the city at risk of becoming collateral damage in the US-China confrontation.
0 -
Gavekal Dragonomics
Ernan Cui
Jun 11th 2019
Tourism Falls Victim To The Trade War
The boom in China’s outbound tourism could go down as another casualty of the trade war. As Ernan explains in this piece, the combination of a weakening currency and rising political tensions is becoming a major drag on international travel by Chinese—just as the structural factors driving outbound tourism growth are shifting into a lower gear.
-
Gavekal Dragonomics
Thomas Gatley
Jun 05th 2019
Navigating The Shocks To Earnings
Chinese listed companies have lately suffered more than their fair share of shocks to earnings. In this piece, Thomas explains the financial and accounting problems that have squeezed profits in recent quarters. But he argues that, even with the trade war, 2019 is likely to be a normal profits downcycle rather than a disastrous one.
-
Gavekal Dragonomics
Lance Noble
Jun 04th 2019
How Multinationals Are Managing The Trade War
The collapse of US-China trade talks and the ratcheting up of tariffs has intensified the challenges faced by global companies with operations that span both countries. In this piece, Lance reports on their range of responses to the trade war: some are shifting out of China, some are investing more in China, and some are not doing anything yet.
-
Gavekal Research
Udith Sikand
Jun 03rd 2019
EMs Hit The Trade Wall
It is not clear if the latest trade actions launched by the US against Mexico and India form part of coherent plan. Such moves do signal that the US-centered multilateral trading system is hanging by a thread. This upending of the post-WWII order is especially bad news for trade-dependent emerging economies.
-
Gavekal Research
Research Team, Tom Holland
Jun 03rd 2019
Strategy Monthly: Who Suffers Most In A Long Trade War?
Markets have started to price in a long US-China trade and tech war, and we agree. The odds now favor an indefinite conflict. Damage from the trade war will vary based on a country’s trade-dependency and policy space. Big problems could emerge in Europe and in EMs exposed to China’s supply chain.
-
Gavekal Research
Charles Gave
May 31st 2019
Yes, We Are In A Bear Market
In late 2017, Charles argued that global equity markets looked to be topping out, and it was time to adopt a more conservative strategy. As things turned out, the global equity benchmark hit a peak in late January of 2018, and has not retraced that level. He now argues that global equities have likely entered a bear market cycle.
-
Gavekal Dragonomics
Long Chen
May 30th 2019
The Central Bank's Reform Agenda
The escalation of the trade war with the US likely means that the People’s Bank of China will keep easing monetary policy. But as Chen Long explains, the PBOC will also be pursuing a structural reform agenda. It wants to boost lending to the private sector and move to market-based interest rates—while still preserving overall financial stability.
-
Gavekal Research
Arthur Kroeber, Dan Wang, Matthew Forney
May 29th 2019
Audio & Transcript — The US-China Trade And Technology Mess
In yesterday's special Gavekal Research Conference call Gavekal's Arthur Kroeber and Dan Wang, along with Fathom China's Matt Forney, considered what the breakdown of the US-China trade talks means for the trajectory of the trade war, and what the blacklisting of Huawei means for the tech cold war.
-
Gavekal Dragonomics
Andrew Batson, Long Chen
May 27th 2019
Who Wants A New Long March?
Since the collapse of the US-China trade talks, the public position of both sides has hardened. Top leader Xi Jinping’s call for a “new Long March” was widely taken as a sign he is ready for a protracted standoff with the US. But support for such a stance is not universal, as the surprising public comments of Huawei chairman Ren Zhengfei suggest.
-
Gavekal Research
Louis Gave
May 24th 2019
A Change In The Market Mood
Thursday was an ugly day for global equity markets, with losses that brought total returns on US equities almost back to their January 2018 level, and non-US equities to the brink of bear market territory. It is hard to shake the feeling that the investment environment has changed. What lessons should we draw from the tumultuous trading session?
-
Gavekal Research
Arthur Kroeber
May 24th 2019
Trade War: Back From The Dead
-
Gavekal Dragonomics
Ernan Cui
May 23rd 2019
The Household Debt Service Burden
The rapid rise in China’s household debt has become a major concern for markets and policymakers. While most analysis looks at the household debt-to-GDP ratio, in this report Ernan calculates the household debt service ratio for a better angle on the problem. She finds that the debt burden on household budgets will keep increasing in 2019.
-
Gavekal Dragonomics
Dan Wang
May 21st 2019
The Fate Of Huawei
The US government has China’s most prominent technology firm in a stranglehold. The question now is whether the US government continues to strangle Huawei until it goes out of business, or chooses to eventually stop squeezing and allow a weakened Huawei to keep operating under some limitations. In this report, Dan explores the possible scenarios.
-
Gavekal Research
Arthur Kroeber
May 20th 2019
Trump's Trade War Calculus
Keeping track of all the pieces of the US-China confrontation has become a full-time job. But the chaos and uncertainty of the past couple of weeks has begun to resolve itself into fairly clear patterns, even if the outcomes remain in doubt. Three main conclusions emerge from last week’s activity, and none of them are particularly reassuring.
-
Gavekal Dragonomics
Long Chen
May 17th 2019
Video: How Much Downside For The Renminbi?
Since the US slapped fresh tariffs on Chinese exports a week ago, the renminbi has fallen, but by less than when the first round of tariffs were imposed last year. In this video interview, Chen Long discusses why that is, and how far China’s currency is likely to fall if things get worse.
-
Gavekal Dragonomics
Andrew Batson
May 16th 2019
Stabilization At Risk
China’s economic data for April came in rather worse than the too-good-to-be-true indicators for March. As Andrew explains in this report, the April figures do not actually show a serious deterioration, and property is still holding up. But the stabilization in growth is now under threat from a more protracted trade conflict with the US.
-
Gavekal Research
Louis Gave
May 15th 2019
The Case Of The Missing Inflation: The Changing Demographic Picture
Demography, it is said, is destiny. If so, then the finger of destiny may be pointing at a more inflationary future for the world economy. Louis reviews the slow shifts in demographic profile which govern trends in consumption and savings, and so propel the forces of inflation and deflation over the very long term.
-
Gavekal Research
Long Chen
May 14th 2019
Beijing's Most Effective Trade Tool
In response to the escalation of the US-China trade war, Chinese policymakers are likely to step up their easing measures. This should help support domestic demand. But as Chen Long argues in this piece, the effect of policy easing, coupled with the impact of increased tariffs on China’s exports, will add to downward pressure on the renminbi.
-
Gavekal Research
Arthur Kroeber
May 13th 2019
The Trade War Story Lines Harden
The US-China trade war has three potential outcomes. First, we could see a step back from brinksmanship and a deal in the next few weeks. Second, the two sides could dig in for more protracted negotiations. Third, the talks could break down and the trade war become permanent. With the probability of each outcome less than 50%, the only certainty is continued uncertainty.
Home
