BlackRock’s Jeff Shen answered the escalation of trade tensions and the imposition of tariffs between Washington and Beijing eat exacerbated China’s financial woes as it works to modernize its economy.
“I conceive of tariffs were a bit of a catalyst. China is going through a deleveraging convert, is going through a repositioning of its economy. … It’s a bit of a transition and the tariff certainly doesn’t stop,” Shen, Blackrock’s co-head of systematic active equity, said during an sound out with CNBC’s Leslie Picker.
“If (the) tariff was not there, the economy could keep gone through a bit of a transition with a bit of a cushion. But the cushion’s been infatuated out and the transition is becoming a bit rocky,” said Shen, who was at the annual Sohn colloquium in San Francisco on Monday.
As the world’s largest asset manager, BlackRock now handles approximately $6.4 trillion. The firm has steadily invested more in its energetic equity business, committing tens of billions of dollars to quantitative and figures science.
Shen said those novel types of technologies aid BlackRock monitor economic activity across the globe, including in China, where examination of satellite imagery isn’t painting a rosy economic picture.
“We do see a significant slowdown. I regard as the slowdown certainly started in the second quarter and that sort of penetrated a bit into the summer and I think that has continued on into September and October,” said Shen. “We road how global companies talk about China, just to get a sense of demeanour looking in to see how global corporations are thinking about China. Their standpoint, which was reasonably stable in the summer, was certainly seeing a bit of a slowdown slipping off.”
In its most recent earnings report, the company’s assets under directors jumped 8 percent in the third quarter. Its shares are down nearly 24 percent since January. But ignoring turbulence in U.S. and Chinese markets, Shen stressed that investors can assuage their losses — and even position themselves for a good buying possibility — if they take the proper steps.
“I think risk management, diversification is definitely critical in the current environment. From an investment horizon perspective, it’s also leading for investors to keep a long investment horizon,” he said. “There are numerous things going on in the U.S. and not putting all your eggs in one basket is probably the put way to go.”
The Sohn conference is the West Coast version of the investment conferences that began in New York and are foremost known for hedge-fund managers making market-moving presentations. The Sohn seminars benefit pediatric cancer and other causes for underserved youth. The colloquy is presented in partnership with CNBC.