Investors should look beyond the upcoming U.S. midterm choices in gauging the tense geopolitical situation between the U.S. and China, according to Barclays’ first of macro research.
The issues at the heart of U.S.-China relations go beyond swap tensions, which some analysts have said may ease after the U.S. midterm votes, Barclay’s Ajay Rajadhyaksha told CNBC at the Barclays Asia Forum in Singapore. While some entertain speculated that U.S. President Trump may simply be escalating the trade war with China, to interest voters from troubles at home.
But investors hoping to wait out the tensions until the Nov. 6 midterms may be in for a incredulity: “They still need to keep waiting for a while,” said Rajadhyaksha.
“This is not the U.S. and NAFTA. This is not the U.S. and the European Bund … There is a significant part of the U.S. administration that is worried in China’s technology ambitions,” he said, adding that trade frictions intention not settle down anytime soon.
The issue of technology transfers has tint a shadow on relations between the two economic powerhouses, with the Trump government initially imposing tariffs on Chinese imports to penalize China for traffic practices that it said involved stealing American companies’ highbrow property.
The world’s second-largest economy has a “Made in China 2025” program, which is a crucial plan to make China a leader in key global industries. Among those sectors targeted by Beijing is the record technology space.
Rajadhyaksha said: “The administration wants fundamental modulate in how the Chinese treat intellectual property, how they talk to technology flocks looking to invest in China. This is not about the trade deficit. If it was, it purpose be easy to solve.”