Despite near-chaos in the US-China-Australia relationship, I have not released any comment since January as I’ve been unwell.
However, I can summarise the past 8 months in four words.
I told you so.
It’s now accepted that the US has moved to contain China, including financial, trade and national security pressures backed by a huge US domestic fiscal, deregulatory and tax stimulus. (see my January 2018 newsletter)
So what’s next?
Attend the Crazy Rich Asians in a Trumpian World seminar, 22 October, 12-2.30, Sydney, sponsored by Deloitte, to find out. (Click here)
This US-China tension comes at a time when Crazy Rich Asians (CRA) has surged up the box office charts. But is this movie the swansong for CRAs, or the just the start of what is to come?
At my event, I will be addressing;
- Crazy Rich Asian (CRA) lessons for Chinese wealth in Australia. Bananas, globalists and sino-ization
- The Marie-Antoinettes amongst CRA; the rising role of Chinese philanthropy, not ‘let them eat cake’
- A bird in hand is worth beating around the bush; how Australia can still win from China’s growth and US alliance pressures
- Why Islamic State has ‘saved’ the Chinese (til now) in Australia and the West
- Outlook for Chinese capital flows and impact on Australia
- China’s demographics and its AI/tech saviour. 100-50-25 population decline in three generations, and industry specific opportunities for Australians
- Will China harden its response to the US by selling US treasuries and becoming the world’s biggest importer, driving up the CNY and driving down the USD?
Right now, the China-US-Australia relationship can be described as…
‘It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us….”
This opening line from A Tale of Two Cities, (Charles Dickens) is apt as we watch US-China rivalries gallop into a tense geopolitical future.
So far, in a tale of two stock markets, two currencies, two financial systems, China is down, the US is up.
In an age of wisdom and foolishness, Trump smells blood and will ratchet pressure on China, including more trade tariffs and national security reasons to reduce investment ties.
In the season of US mid-term elections as a referendum on Trump, a darkness looms; the US imposition of national security restrictions to disengage from China including secondary sanctions on Chinese entities if they continue to buy Iranian oil after the November 4 Iran sanction date.
And facing a potential winter of despair, China will harden its response by selling US treasuries and catalysing a global financial crisis.
An epoch of incredulity?
So where to for Aus-China investment?
It is also the best of times, a season of light and the spring of hope.
As in A Tale of Two Cities (London and Paris during the French Revolution), life and business will go on, although a few lose their heads, empires will rise and fall, and nations on the periphery will maximise opportunities from the disruption.
The French Revolution, arguably one of the most consequential in Western history, was also midway into the 60-year-long Industrial Revolution, similar to where we are now in the Digital Technology Revolution, (DTR) where AI, new energy, new materials and ‘big data’ will re-engineer the world and will hopefully save it from conflict.
For Aus-China investors, China’s recent hubris is fading which will lead to more 2-way investment, more realistic equity valuations, and a drive for better business efficiencies & corporate governance that levels the playing field.
China’s push for more domestic consumption & services, Belt and Road initiatives and DTR advantages, plus a resumption of targeted fiscal and credit stimulus will open considerable opportunities for Australia.
Demographics will also have impact as the child of one-child parents soon enter the workforce in far fewer numbers.
But don’t just take my word on this. Let’s also hear from someone who puts his money and reputation on the line; Tim Cheung, co-founder of LSL Partners who runs an Asian hedge fund based in Sydney and is actively investing in the China mass consumer and tech-driven themes.
Seminar: Crazy Rich Asians in a Trumpian World. The best of times, the worst of times, an age of wisdom, an age of foolishness…sponsored by Deloitte
Monday 22 October, 12 noon to 2.30pm
Deloitte. Level 9, Grosvenor Place, 225 George St, Sydney. Seats are limited to 130 delegates.
12 noon registration and lunch served (stand-up buffet style with networking)
12.30 Opening comments. Vera Ou-Young, Partner and National Chinese Services Group Leader, Deloitte
12.35 David Chin. Managing Director, Basis Point. Crazy Rich Asians, market impacts, capital flows and tactical moves by China-US-Australia. Outlook for Australian property, agri, financial and wealth services, VC, education, tourism, consumer goods and migration
1.15 Tim Cheung, Co-Founder, LSL Partners. What is the outlook for Chinese consumption and technology during this time of Aus-China-US volatility? Why we are long/short on Chinese stocks and Australian stocks with Chinese revenues. How we conduct ‘deep dive’ analysis on China
1.55 Q&A, closing comments from Deloitte, and networking coffees
Early Bird cost $90 plus GST. Click here to register
Who should attend? Xi Jinping, Donald Trump, Scott Morrison, Australian and Chinese wholesale investors, asset and property owners/developers, fund managers and business CEOs & executives exposed to China.
Finally, here’s the rest of the opening paragraph from A Tale of Two Cities.
… “we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”
I hope to see you on 22 October.