Opportunities from the struggle between the United States and China, according to economists

Chinese authorities are promoting the use of the yuan worldwide, and the US dollar dominates global trading.

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Beijing — Regarding the investment outlook, one Chinese economist predicts that a once-in-a-century opportunity will emerge from a “hegemony battle” between the United States and China.

Liu Yu Hui, head of the financial research division of the Chinese Academy of Social Sciences’ government think tank, said the groundbreaking window came from a cataclysm on both sides.

China aims to be a great country, but he said the United States has embarked on a dollar printing policy since the coronavirus pandemic that changed the fiscal balance.

This is due to the CNBC translation of his Mandarin speech entitled “The Polar World Under the US Dollar Super-Expansion Cycle-The” Cognitive Revolution “of China’s Capital Markets.”

Liu, Chief Economist at Tianfeng Securities, spoke at the Investment Strategy Conference of asset management firm China AMC on Friday. Founded in 1998, China AMC is one of the largest investment trust managers in the country with assets under management of 1.54 trillion yuan ($ 240.63 billion).

In Liu’s view, the United States implements the concept of “Modern Monetary Theory” (MMT). This means that governments with strong currencies can print money to support the domestic economy without worrying too much about budget deficits.

One of the most prominent supporters of Modern Monetary Theory is Stephanie Kelton, a former Chief Economist of the Democratic Party of the US Senate Budget Committee and Senior Economic Advisor to Bernie Sanders’ 2016 presidential election campaign.

Under the Trump and subsequent Biden administrations, the United States maintained low interest rates and released trillions of dollars into the economy to support post-pandemic growth.

The stimulus program has been criticized for its scale. At the annual Berkshire Hathaway conglomerate meeting in May, Charlie Munger, a longtime business partner of U.S. billionaire Warren Buffett, said modern monetary theory “may be more feasible than anyone thought. Absent. .”

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On the other hand, in China, Xi Jinping President July 1, called for “the great rejuvenation” of China again, the ruling Chinese Communist Party is celebrating its 100th anniversary.

For Mr Liu, the government’s stance means that policy will focus on ensuring national security and reducing carbon emissions. He emphasized that political correctness will become even more important for investment in light of the controversial speech of Alibaba founder Jack Ma last fall and the subsequent suspension of Ant Group’s IPO. ..

Mainland China’s stocks, which are most likely to make significant profits, will be, among other things, stocks in the new energy, seed, optics and semiconductor industries, Liu said.

Liu also geopolitically cast on digital currencies that Chinese authorities have tightened crackdowns this year.

“In my view, it’s just a US way to seduce the Chinese capital,” he said.

Opportunities from the struggle between the United States and China, according to economists

Source link Opportunities from the struggle between the United States and China, according to economists

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