• The US-China relationship appears to be deteriorating. US recently published a list of an additional $200bn of Chinese products subject to 10% tariff rates that will be put forward for the public hearing process by 30 August and could possibly be implemented in September.
• As trade talks intensify, Chinese assets are under pressure, with the potential for corrections to the renminbi (RMB) and equity market occurring.
• Beyond the short-term weakness, from an investor’s perspective, we think it makes more sense to consider China as a new investment asset class in its own right, not just as part of an emerging market exposure, to take advantage of the transformation of the Chinese economy and its global economic power.
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