~Invesco's Asia Pacific (excluding Japan) global market strategist Zhao Yaoting pointed out that after the results of the US election, he remains bullish on emerging market assets, especially in Asia's emerging markets. He believes that Asian assets still have attractiveness, especially in the long term. Asian economies are quite robust, facing lower inflation pressure, and next year's growth rate will exceed that of developed markets. Asian stock market valuations are more attractive. More importantly, the Chinese government is expected to introduce further fiscal and monetary stimulus measures. Many Asian economies benefit from the theme of artificial intelligence investment, and central banks in various Asian countries have started to ease monetary policies. Overall, it is believed that investors will pay more attention to valuations and growth differentials rather than trade tensions.
Zhao Yaoting proposed that the market may have overestimated the economic impact of Trump's proposed tariff policies on the entire Asian region. Since the first trade friction, trade tensions have continued for seven years, and many multinational companies have diversified their supply chains during this time. For example, the impact of the trade friction from 2018 to 2019 on the mainland economy was only about 1%; in contrast, the 60% tariff levied on Chinese goods may have a weaker impact on the mainland's real GDP growth. He believes that Trump's proposal to levy a 60% tariff on the mainland is unlikely to significantly affect the confidence or sentiment of multinational companies in the Chinese market, and that the Chinese government is likely to introduce more fiscal and monetary stimulus measures, which may offset some adverse factors.
He stated that although Trump's re-election may bring short-term volatility to Asian markets, he believes that the prospects of the mainland market will depend more on domestic developments rather than external factors, while the North Asian market will be dominated by the theme of artificial intelligence investment. Under the proposed tariff policy framework by Trump, India and ASEAN markets may perform better. In Asia, Japan and India markets are still promising.
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