WASHINGTON (Pakistan Point News / Sputnik - 03rd November, 2020) The US investors will keep working closely with China as its short-to-medium-term prospects look very encouraging, and the presidential election in the United States will unlikely have an effect on these plans, Kyle Shostak, director of Navigator Principal Investors, told Sputnik.
"While investors may get scared away by the military-like rhetoric, the actual rewards of holding Chinese stocks in the last six months have been remarkably generous," Shostak said. "We intend to continue working closely with our Chinese investments and believe that their short-to-medium-term prospects are very promising relative to what can be expected elsewhere. We don't expect the US election to have any significant impact on our plans."
The investor noted that Beijing expects GDP to top 100 trillion Yuan (about $14.9 trillion) this year, which would imply an increase of at least 0.9 percent from 2019's level.
"This is by far the world's most impressive economic growth which the investors must take advantage of," he said. "More and more Chinese stocks are available for purchase via traded indexes as well as through some bulge bracket US brokerages who recently opened up their offices in China to trade domestically."
Shostak believes that the framework of the US-China trade agreement, reached in January, will remain in place as both parties rely heavily on mutual trade and "the economic decoupling voices on both sides of the Pacific are still a minority."
"I expect the two sides to recalibrate the agreement, a process that seems to be underway as a high-level US trade delegation is visiting China these days," Shostak stated. "We recommend increasing China's allocation, which should include not only Chinese equity but also the US companies continuing to do business in China and benefiting from improving supply chain."
The tariff war between the United States and China started after US President Donald Trump decided in June 2018 to impose 25-percent tariffs on $50 billion worth of Chinese goods in a bid to fix the US-Chinese trade deficit. Last May, the United States more than doubled import duties on $200 billion of Chinese goods. Beijing retaliated by increasing tariffs on US imports later that year.
At the beginning of 2020, the United States and China struck the Phase 1 trade agreement in which Beijing agreed to increase purchases of US goods and services by $200 billion over the next two years. In February, China reduced by 50 percent tariffs it had imposed on a number of US goods.
