The podcast featured Torsten Slok, Apollo Global Management Chief Economist, discussing the Fed stepping harder on the brakes. Earl Davis, BMO Asset Management Head of Fixed Income & Money Markets, doesn't expect any Fed hikes next year. Pierre Ferragu, New Street Research Head of Global Technology Infrastructure, highlights China's dependence on Apple. Steven Major, HSBC Global Head Of Fixed Income Research, predicts sideways yields. Anna Ashton, Eurasia Group Director China Corporate Affairs and US-China, discusses the systemic China slowdown.
The Fed is expected to apply more restrictive monetary policies, while China's dependence on Apple increases its vulnerability.
China's economic slowdown is systemic, but its growth potential and expanding middle class still present opportunities for foreign firms.
Deep dives
China's Economic Challenges
China is facing significant economic hurdles, including a systemic slowdown and a real estate crisis. However, the country is still growing and offers opportunities due to its size and expanding middle class. Competition from domestic companies has increased, making it more challenging for foreign firms.
State-Owned Enterprises and Xi Jinping's Regime
Under Xi Jinping's leadership, there has been a re-emphasis on the role of state-owned enterprises (SOEs) in China's economy. Xi believes that the state should direct the growth of specific sectors. This aligns with the current trend in US politics towards a larger state role in the economy.
Investing in US-China Relations
While there are concerns about the souring US-China relationship, history has shown that previous predictions of China's collapse or the end of its growth miracle were unfounded. However, there are notable differences this time, such as the challenge of stimulating the economy without reinflating the real estate bubble. There is also a more direct tit-for-tat dynamic between the two countries.
Navigating US-China Relations
Recent statements from US officials, such as Gina Raimondo and Vice President Kamala Harris, highlight the need for China to take action and improve trust in the relationship. The rhetoric from both sides indicates a more confrontational approach in addressing issues like trade and territorial disputes.
Torsten Slok, Apollo Global Management Chief Economist, says the Fed is stepping harder on the brakes. Earl Davis, BMO Asset Management Head of Fixed Income & Money Markets, doesn't expect any Fed hikes next year. Pierre Ferragu, New Street Research Head of Global Technology Infrastructure, says China has to be very careful with what they do with Apple because China depends on Apple for many things. Steven Major, HSBC Global Head Of Fixed Income Research, says yields will probably go sideways. Anna Ashton, Eurasia Group Director China Corporate Affairs and US-China, says the China slowdown is systemic. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance