No illusions, US-China tensions will persist.
Janet Yellen, the new Treasury Secretary, made clear during her confirmation hearings last week that China remains the US’s most important strategic competitor + she went on to say “[China] has been stealing intellectual property and engaging in practices that give it an unfair technological advantage”. Clearly China-US rivalry is on the agenda – with more war than peace.
But US business sees things quite differently. They want more – not less – of China. Roy Dallio of hedge fund Bridgewater believes China will become a financial centre within the global economy that will rival London and New York. Asset managers are expanding their presence in China. A surge of foreign capital entered China in 2020 that enabled Chinese equities to out-perform the rest of the world. The BlackRock Investment Institute predicts annualised returns in China of 6.4% as against 4.1% from US companies. There will be “greater portfolio allocations to China-exposed assets” says BlackRock.
Politicians say one thing. Businessmen/women say another.
Who has greater influence?