FINSUM + Magnifi: This Sector Will Benefit from “Decoupling” With China
(September 2020)
Over the last few years, President Trump has been leading a so-called “decoupling” with China, or a concerted effort to lessen the economic links between the US and China. This has involved many spats over trade tariffs etc, but this week the president is refocusing on the issue and reiterating that he intends to both lower the trade deficit and make the US less reliant on Beijing. If this move continues it could have profound effects on the economy. One sector that seems very likely to gain is robotics and automation. A central tenet of Trump’s push is to re-assert the US’ manufacturing prowess. As US firms bring production home, costs will become an issue because domestic manufacturing is more expensive. Therefore, they will likely turn to robotics companies to automate as much of the manufacturing process as possible.
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FINSUM + Magnifi: Go Long China Because Decoupling" is a Myth"
(September 2020)
There has been a lot of media coverage about the US’ “decoupling” with China. Most of this has been centered around President Trump’s push to lessen economic ties with Beijing. This has worried some investors as it could disrupt decades-long global supply chains and raise costs for US companies. However, an analysis of underlying economic activity reveals that, if anything, the US and China have grown closer over the last year. This increasing closeness has largely happened on the financial front, as Beijing has been allowing more and more access to US companies. For instance, since the start of 2019, PayPal, JP Morgan, Goldman Sachs, American Express and others have all secured deals that allow them varying forms of greater access to the Chinese market. This has coincided with increasing cross-border capital flows between the two countries.
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