This podcast is first and originally published here: https://peterlewismoneytalk.substack.com/p/peter-lewis-money-talk-tuesday-16-5b6
In a recent podcast, Tony Nash, Complete Intelligence CEO and founder, shared his valuable insights on key market developments, including the US debt ceiling talks, the political situation in Turkey, and market developments in China. His perspective shed light on the potential implications and opportunities for investors in an ever-changing economic landscape.
US Debt Ceiling Talks: Tony provided a detailed analysis of the US debt ceiling talks, emphasizing the potential risks associated with a failure to reach a resolution. He highlighted Treasury Secretary Janet Yellen’s warning about the possibility of a default on US obligations, which could have severe consequences for the economy and financial markets. Tony’s insights served as a wake-up call, urging listeners to monitor the developments closely and consider the potential impact on their investment strategies.
Turkish Politics and Economic Outlook: Drawing attention to Turkey, Tony examined the political landscape and its influence on the nation’s economy. He analyzed President Recep Tayyip Erdogan’s policies and their potential ramifications, emphasizing the need for investors to stay informed about political developments in Turkey. Tony’s perspective helped listeners understand the importance of assessing the stability of the nation and its potential impact on investment decisions.
Market Developments in China: Tony delved into the market developments in China, with a particular focus on the Northbound Swap connect scheme. He highlighted the scheme’s significance in linking Hong Kong and mainland China’s interest rate swap markets, opening up new opportunities for global investors. Tony stressed the importance of recognizing China’s commitment to market expansion and the potential for diversification and investment opportunities. His insights provided listeners with a deeper understanding of the evolving dynamics in China and the potential benefits for investors.
Key Takeaways from Tony’s Insights: Throughout the podcast, Tony’s contributions offered valuable takeaways for investors. His emphasis on monitoring the US debt ceiling talks highlighted the importance of assessing potential risks to the economy and financial markets. Tony’s analysis of Turkish politics urged listeners to consider the nation’s stability and its impact on investment decisions. Additionally, his insights on market developments in China emphasized the potential for diversification and investment opportunities through the Northbound Swap connect scheme.
Transcript
Andrew
Every Monday to Friday. This is Peter Lewis’s Money Talk. Money talk.
Peter
Good morning, and welcome to Tuesday. This is Peter Lewis with MoneyTalk on the 16 May. Just a reminder that we’re on itunes, Spotify and Google podcasts. If you go to my website, Peter Lewismoneytalk Substac.com, you’ll find all the links to your favorite Pod cast apps. The program also has a Facebook page, peter Lewis MoneyTalk and I’m on Twitter at MoneyTalk r Three. And this podcast is sponsored by Surfing Group, which is headquartered in Singapore and offers online financial services to 30 million customers across ten countries. In today’s business and finance headlines, US. Treasury Secretary Janet Yellen has reaffirmed June 1 as the so called X date. When the US Treasury could run out of money and default on its obligations. She told Congress in a letter that waiting until the last minute to suspend or increase the debt limit can cause serious harm to businesses and consumer confidence, raise short term borrowing costs for taxpayers and negatively impact the credit rating of the United States. The warning comes as the White House and congressional leaders prepare to resume debt ceiling talks later today. Financial markets in Turkey have plunged after it looks increasingly likely that President Raceeep Taip Erdogan’s unorthodox policies could continue into a third decade.
Peter
The election will go to a runoff in two weeks time after neither President Erdogan nor opposition rivals exceeded 50% of the vote. Turkey’s benchmark BIST 100 index slid 6.1%, with the banking sub index down almost 10%. The Lira remained near a record low and the cost of five year credit default swaps to protect against the default on Turkish debt rose by the most in more than two years. In Thailand, the two main prodemocracy opposition parties have agreed to form a coalition. Move Forward is projected to have won 151 constituency seats and 39% of the votes for the party list, while Per Thai, led by ousted former Prime Minister Takshin Shinuata’s daughter, is projected to have 141 seats and 29% of the votes. Move Forward leader former tech executive Pita Lim Jeron Rats told reporters that the extended invitations to five parties to form the next government to try and oust the military backed government that has ruled for almost a decade and China’s Northbound Swap connect scheme launched on Monday in Hong Kong. It will link Hong Kong and mainland China’s $5 trillion interest rate swap markets and help global investors to participate in the mainland interbank financial derivatives market and hedge risk on Chinese bonds.
Peter
On today’s Money Talk, I’m joined by Asian fund management industry consultant Stuart Ulcroft, Andrew Sullivan, founder of Asian Market Sense and from the USA, Tony Nash, founder, CEO and chief economist at Complete Intelligence. Tech stocks led the advance on Wall Street on Monday on the hopes that interest rates have peaked while the broader market lagged after the latest economic figures indicated the US. Economy was slowing. Data from the New York Fed showed its index measuring manufacturing in New York State plunged from 10.8 in April to -31.8 in May Far below economists forecasts of -3.8 traders were also hoping for a breakthrough between the White House and Republicans in Congress over talks to avoid an unprecedented debt default. The border S and P 500 index traded a third of a percent higher to 4136. The Dow snapped a five day losing streak, gaining 48 points, or 0.1%, to 33,349. The tech heavy Nasdaq outperformed rising zero 7% to 12,365. Regional banks rebounded with the KBW Regional Banking Index jumping 3%. Shares of Microsoft were up 0.1%. Earlier yesterday, EU regulators approved Microsoft’s $69 billion purchase of Call of Duty publisher Activision Blizzard. Despite the deal being blocked by UK.
Peter
Competition authorities. The European Commission said Microsoft had addressed their concerns on competition issues. Chinese markets staged an afternoon rally yesterday. Hong Kong’s HangSeng index rose 344 points, or 1.8% to 19,971. On the mainland, the Shanghai Composites rose 1.2% to 3311. And futures markets are pointing to gains of about 0.9% at the open. And you can get more details on the latest market movements on my daily newsletter which you’ll find at peterlewestmoneytalk substac.com every Monday to Friday, this is Peter Lewis’s MoneyTalk peter Lewis Money Talk let’s welcome our guests. We have with US Asian fund management industry consultant and our regular Tuesday commentator Stuart Allcroft. Morning Stuart.
Stuart
Good morning Peter.
Peter
And also with us from the US is Tony Nash who is the founder and CEO and chief economist at Complete Intelligence. Welcome, Tony.
Tony
Hi Peter. Welcome. All right, thank you.
Peter
And also here in the studio with me we have Andrew Sullivan who is founder of Asian Market Sense. Morning Andrew.
Andrew
Good morning.
Peter
Let’s start with these US debt ceiling negotiations. President Joe Biden is expected to host top congressional leaders on Tuesday for debt ceiling talks. They were postponed this week from Friday. Over the weekend, Janet Yellen told the Wall Street Journal that the Biden administration and Congressional Republicans are making progress in their negotiations over federal spending and raising the debt limit. Ms. Yellen warned that the USA could become unable to pay its bills as soon as June the first if Congress doesn’t first raise the debt ceiling, leading to economic catastrophe. And yesterday she reaffirmed that date as the earliest the US. Could default on its debt. Tony, let’s start with you over in the US. Because you’re on the spot there. Can we be optimistic that maybe something’s going to be resolved here? President Biden seems to be quite optimistic, but House Leader Mick McCarthy was rather negative in some of his comments yesterday.
Tony
Yeah, I think we’re at a point where we’re not going to get something as quickly as we think we’re going to get something. We’re at the stage just for kind of the last minute brinksmanship starts. So the US debt ceiling is an annual event, pretty much annual event here in the US. Where both parties threaten to cut programs from the other. The party in power wants to defend their spending, and the party out of power wants to cut spending. And in America, it’s just a normal course of events. And Yellen speaking and saying June 1 was the X date doesn’t necessarily align with things that we’ve heard in recent weeks. If it is the X date, which I don’t think it is, I think that it could be a ploy, because what we’ve seen in the past at times is, let’s say June 1 is the X date, then we see the federal government close, things like national parks just in time for summer holidays. We see them close, very visible parts of the federal government, while other parts of the government continue running. So it’s all about how it looks, and it’s about embarrassing the other party as we move into an election cycle.
Tony
That’s simply all the debt ceiling is about. At the end of the day, the US. Is going to spend more. At the end of the day, the politicians are going to spend more. There aren’t going to be really any cuts. They’ll push the cuts off to future years so that the politicians in office now don’t have to deal with it. So this is really just a lot of drama. Markets will react because people who are not familiar with it will react. But in truth, this is really just we’re probably going to have probably three to four weeks more of drama.
Peter
So it sounds like then, from what we’ve seen in the past, that even if we do get to this X State, whatever day it is, the US. Isn’t going to suddenly default on its debts because it will prioritize other things, won’t it? It’ll make sure it can still pay the interest and redeem US. Treasuries there’ll be other things happening first, like employees being furloughed. So although it’ll have an effect on them, it’s not necessarily going to be a financial markets crisis.
Tony
No, it’s not going to be a financial markets crisis, or it shouldn’t be a financial markets crisis. And employees may get a week or two or three weeks off of work, but they’ll be paid for all of that time. And federal employees right now are planning on having a holiday. That’s really what’s happening, is they’re planning on having a couple of weeks off. So that’s really the only downside for federal employees. I know that outside of the US. I think this is probably looked at as being really strange if you’re outside of the US. But in the US. It just is an illustration of the divisiveness of politics here, which most Americans, quite frankly, are really tired of. And it shows the extremes to which the political parties feel they need to go in order to satisfy some constituency. And that’s really all it is here in the US. Most people are not the least bit nervous about it.
Peter
Stuart it certainly does look strange to us, doesn’t it, when we look from here?
Stuart
Peter, one of the things I would be a little bit concerned about here is that they might be able to get to some agreement, but I think this is going to be a rehearsal for next year. Next year is an election year for the next president. And I think that if they can find weaknesses, if the Republican Party can find weaknesses in the Democrat position, then they will do that and then try to force it into a position where when they come to do the same thing next year, there will be a problem. And the problem could go on for much longer next year rather than for this year. It’s easy for the Republicans to say, well, okay, we’ll give up now, but we won’t give up, really, because next year is going to be your big problem.
Andrew
Yeah, I think overall, as Tony was saying earlier, it’s an annual event that’s sparring just this year. They seem to have heightened it a little bit by bringing forward the date to start talking.
Peter
Is it really a big problem? When you look at US debt, it’s about, what, 100% of GDP? So that sounds sort of pretty horrendous. But then when you look at, say, Japan, it’s what, 260% of GDP? China’s debts, national debts, 300% of GDP. Is it really a huge problem?
Andrew
Well, no, I think the only problem here is the system that the Americans have chosen to adopt. I mean, it’s something that every country has to go through. They’re large numbers, but I mean, every country goes through this and they just have different systems for agreeing it. At the end of the day. I mean, the only other ones in the world used to be Denmark, which I still think operates the same system, and Australia, and they decided to change theirs because it was too confrontational. So, realistically, I think the US should look at changing the system by which they deal with this, to remove it from the agenda.
Peter
But there seems to be something different about it all this time, doesn’t it? There seems to be some more strident voices over in Congress that are sort of really digging in. And I suppose the fear is that we could get to the point where the US has no choice but to default, and then presumably that’s going to have some big financial market consequences.
Stuart
Oh, I don’t think the US Is going to get to a point where it will default. I think that’s the last thing it wants to do and the last thing the rest of the world wants it to do. I think it’ll just be lots of noise and saber rattling and eventually some sort of agreement will arise. But I think for the rest of the world, we are bemused by the way in which the savor rattling goes on. And it’s not the first year that it’s happened it seems to happen most years, although this year is a little bit worse than it was last year. But two or three years ago, I remember it went beyond the deadline dates and there were closures all over the place.
Tony
I just say here how this is supposed to happen and how this used to happen until, I don’t know, ten or so years ago. The President is supposed to propose a budget to Congress. Congress is supposed to vote on that budget, and Congress then debates the budget and votes on the budget, and then those funds are appropriated. Okay? Presidents haven’t submitted budgets for a decade or more, and the US budget has basically been passed through a continuing resolution. And so this debate we’re having right now is really about this really stupid continuous resolution because the Presidents of the last decade have not done their job and proposed a deficit or a budget I’m sorry to Congress. So this is the way things should happen. But presidents have not proposed budgets because they don’t want to be seen to not be proposing budgets in certain ways. They want to just go along and continue to expand spending from the US. Which is just them not really fulfilling their duty.
Andrew
Yeah, as Tony said that I think the thing this year is, because it’s an election year, next year, neither party will want to be seen as to being taking this too far. So they both got a vested interest in coming to an agreement. But as Tony says, it’s a historic arrangement. That’s the problem. They really need to address that.
Peter
Okay, well, let’s switch our attention to a totally different region, to Thailand, not a country we talk about a lot on this show. But nevertheless, they’ve just had their general election. 99% of the votes have been counted, and the pro democracy opposition parties move forward. And the Per Thai Party, which means four this, have emerged as the biggest winners. They’ve promised to form a coalition to try and oust the military backed government. But Stuart, this could be a problem, couldn’t it? It’s not as simple as that in Thailand.
Stuart
No. The military have been in charge for quite a long time now. They don’t like the idea of anybody else running the country, and now the rest of the country are now saying they don’t like the military running it. And the fact that there’s a sigh on of the Shinoatra family also involved in the potential new government, that also is like a red rag to a bullet with the army in Thailand. What I always think is pretty amazing about Thailand, though, is that the economy seems to thrive, whether it is a military government or a civilian government. And unlike most countries around the world where military coups occur, this doesn’t seem to slow down the Thai economy at all. But what I think will be quite intriguing is that the the Move Forward party in Thailand has indicated that it wants to make fundamental changes to many aspects of the Thai constitution, including making changes to the role of the royal family there. And that has always been sacrosanct as far as Thailand is concerned. And the fact that they are willing to talk publicly about wanting to make changes and then winning the largest proportion of votes suggests that maybe the general public do want to see some changes.
Stuart
And that certainly seems to be the case. I think that over the next few weeks, it’s certainly going to be probably a lot of negotiation going on. What will survive, hopefully, will be some form of acceptance that the democracy process worked and that the Thai people will get the government they want.
Peter
And on that GDP figure that you mentioned, we did get economic data out yesterday from Thailand. Thailand’s GDP advanced 2.7% in the first quarter, accelerating from 1.4% growth in the fourth quarter of 2022. Andrew, this does seem significant, doesn’t it, this election, in that there’s going to have to be some changes. But the problem is the Senate, which effectively has a veto on the government, has never, ever voted for anything other than a military backed government. So the odds are stacked really in favor of the incumbent government.
Andrew
And that, I think, is what’s alluding to there is that’s what the public really want to see changed. And you’ve still got the risk that even after you make these changes, the military decides to have another coup and take back control again. And that’s just the fact that you’ve got such a groundswell of support for change is encouraging. But as you say, everybody in the Senate is military picked, so their alliance is well known. And so this is one of the reasons that I think they’re looking for such a broad coalition so that no one party can be singled out as being an opponent to the crown or to the realm there. It really is a representation of the people.
Peter
Tony, what’s the sort of the geopolitical significance of this, and in particular in terms of Thailand and Southeast Asia’s relationship with the US? I mean, the US is obviously trying to develop stronger ties with the region, and presumably it will have something to say if the current incumbent government doesn’t follow the will of the people.
Tony
Well, the US is trying to rotate its manufacturing out of China, and Thailand is obviously a big part of that. And so I think stability in Thailand is helpful for US businesses who either want part of their supply chains or their own entities in Thailand. And so I think Thailand has been remarkably stable, even through the toxin era and all the instability there. I say instability, but I think to most foreigners, it didn’t really look unstable. The investment was remarkably stable. And so I don’t think anybody wants I don’t even think Thai people want too much trouble in Thailand. But certainly the US wants to find places like Thailand, Malaysia, Vietnam, where they can derisk from their concentration in China.
Peter
And in terms of relationships with the US, does the US see Thailand as a strategic ally, maybe the same way that it does?
Tony
Yeah, it has been for 50 years or longer. So, yes, the US absolutely sees Thailand as a very strategic ally, as does.
Stuart
The EU as well. Point out, Thailand is an ally of most Western nations and that is very much part of why the stability of country has been maintained, I think, even through the military rulership.
Peter
Stuart, what does this mean for investors if we get a period, maybe, of stability? The markets yesterday were a little bit uncertain about this, but presumably we could get a period of stability. If all goes well and the government accepts the opposition parties taking power, would it make Thailand a good investment opportunity?
Stuart
Well, I think if your listeners are looking for a hot tip to say, here’s a market that’s going to bounce up massively as a result of change of government, I think they’re going to be a little bit disappointed. To be honest because the Thai market has performed with or without the military government and doesn’t seem to be affected too much by it. If what happens as a result of the new government, we see further growth in GDP and further opening up the market, because there are a number of restrictions, nevertheless, then that will be received positively. But I think Thailand has been quite a favorite over the years with many emerging market investors. It hasn’t ever escaped properly the emerging market name, but it is no longer really an emerging market. It emerged quite a while ago. I think many people around the world fail to realize just how big Thailand is as a country, how big it is as its GDP. And I know when I talk to people in Europe and America, they are staggered by the size of Thailand. They think of it as being quite a small country. But Bangkok is one of the three largest cities in the world, 25 million people population just in Bangkok.
Stuart
So you have to bear in mind that this is a country that has been growing and growing and growing, even through COVID. So it’s a very positive place from an investment perspective.
Peter
Andrew, from a long term perspective, Thai markets, do you see them as a good investment?
Andrew
Yeah, I think as Stuart saying there, the country has made a lot of progress in improving its infrastructure. I mean, years ago, we used to get regular flooding. Now they’ve looked to improve the infrastructure. As far as that’s concerned, they’ve put in power, they’ve put in good sites, they’ve made the country very investable as far as moving production there is concerned. And I think, as Stuart saying, it’s actually probably one of the advantages of having a military dictatorship, effectively, is that they can just push things through. The fact that they’ve done that in a positive way, I think is encouraging.
Peter
And of course, tourism, that’s a big part of Thailand’s GDP, about 12% of the nation’s economy. Again, presumably, if we have some stability, that’s always good for tourists, isn’t it?
Andrew
Well, yes. I mean, I think one of the things, as Stuart mentioned, that during COVID they were one of the first people to open up phuket, even on a sort of sandbox basis, to try out whether or not they could keep that economic part of their economy, tourism, going during the COVID crisis. And they managed to do that, and that’s kept it on people’s radar streams. And I think that’s one of the things that Hong Kong will have to fight against is the fact that people have just stopped coming here. It’s not been on the agenda, it’s not been possible to get here. It was expensive if you did come here, and hence people have looked at other places and now those other places will become their regular haunts rather than Hong Kong, unfortunately.
Peter
So what would be the priority for the new government in terms of maybe economic financial initiatives? What’s it got to do?
Andrew
I don’t think it’s got to do an awful lot. I mean, it’s just got to say we are still open for business. There is a change. I mean, a lot of the changes that they’re pushing for are constitutional changes rather than economic changes. And the fact that the economy is doing well, I don’t think they’ll really look to interfere with that. They’ll look to try and enhance it, but they are looking for those constitutional changes. They don’t want the overhang of the threat of the army coming back in and disrupting things.
Stuart
Tony I agree with you, Andrew. I think that that’s exactly what they want. It’s a sort of steady as she goes in the economy and let’s try and amend some of the domestic items that don’t affect the rest of the world.
Peter
Tony we’ve got President Biden coming out to the region at the end of this week, or we think anyway, depending upon how these debt negotiation discussions go, but he’s due to attend the G Seven leaders meeting in Hiroshima in Japan. What are his priorities when he comes out here? Presumably China is going to be one of his big focuses.
Tony
Oh, absolutely. But I think also making sure that the Japanese relationship is very much underscored. We had guests from Korea in DC two weeks ago, so that relationship is secure, at least that’s the feeling. But also making sure that the US is seen as holding strong against China in certain ways. It’s China’s incursions into Taiwan and the US will also underscore the technology embargo it has against China right now, which is very inconvenient for China. So I think there are a number of things, but underscoring the importance of relationships in Asia is really critical for Biden right now.
Peter
So I presume he’s pleased about the reproachmont between South Korea and Japan, that they’re now getting on much better and seem to have opened dialogue once again.
Tony
For sure. Absolutely. And those two allies are critical in the US’s. Discussions with of course, they’re not directly involved, but having them on side. If you look eastward from China, you see a line of US. Ally break in that line of US. Allies. Then it could make the US. Negotiating position much more difficult.
Peter
So, Stuart, what should we expect from this G Seven meeting? Talk about trying to resist what the US. Says is economic coercion from China.
Stuart
To be honest, I don’t think we’re going to get very much out of the next G Seven meeting. We’re out of COVID We’re beginning to start to see economic growth. Everything is beginning to improve. I’m not sure that I expect very much to occur, frankly. The fact that there is a geopolitical overhang remains there, and I think there will be continued. Talk about Russia, Ukraine war, and of course, we’ve already just had it without the US. China difficulties. But I don’t think G Seven is going to be able to do very much about any of these things at the moment.
Andrew
Yeah, I think Stuart’s right there. I think it’s going to be a lot of talking. It’s interesting, I think, that China sent its envoy to Ukraine and Russia to start that process, but they’re still in a very awkward position about being the peacemaker there. And there’s still a lot of effort that the rest of the G Seven will put to try and put pressure on China to change that. TAC but the reality is, as in all of these things, china only changes its mind when it suits China.
Peter
And we got key economic data coming out later today. We got retail sales, industrial production, fixed asset investment. Presumably, a lot of focus is going to be on comparing these numbers with a year ago when China was in a pretty dire situation. So I suppose the numbers have got to be better than where they were one year ago, but also a lot of focus on what is the consumer doing.
Stuart
Yes, and anybody who announces numbers in that circumstance will look like a hero, won’t they?
Andrew
Well, I think the people will look much more at the monthly numbers.
Stuart
Those that know and understand what they’re listening to will know that it’s just recovery from COVID recovery from bad times. And it’s not the importance of the difference between this year and last year. It’s the trend and what else is going on around it.
Andrew
Yeah, I mean, I think the the monthly trend is the most important thing that people will look at, because this time last year, Shanghai was in lockdown, and that was devastating. I think the other one that people will be looking very carefully at is obviously unemployment, because China has a problem in creating employment because it’s stepped on and curtailed the education sector. It’s curtailed ecommerce and, to an extent, even Macau. We’re seeing a good rebound in Macau from the recent numbers and Golden Week, but it’s creating larger jobs going forward that China is really going to have a problem with.
Peter
And presumably youth unemployment. Almost one in five people under the age of 26, I think it is, is unemployed. That’s a big problem, isn’t it?
Andrew
It’s a big problem, and we’re just about to get another whole batch of graduates coming out, and historically, 50% of those would have gone into the education sector. That’s not going to happen now because of the curtailment there. So, yes, I think it’s got a big problem there and I think you’re seeing that. And it’ll be why retail sales will be watched closely. Because in China, I think, from my experience, the consumer tends to be very binary. If they’re confident, they will go out and spend. If they’re not, they just stop spending and just revert to essentials. And I think we’ve already seen that trend occurring in the last couple of months.
Peter
Tony, what stood out from the first quarter earnings season, or one of the things that stood out is the number of US and European companies that are talking about China and the impact of China on their earnings. We’ve seen it from Disney, Starbucks in Europe, from LVMH and Rishman. It’s coming up more and more, isn’t it, in terms of either whether these companies have overestimated the rebound in China, which certainly in some cases they have, or whether some other companies are, like Rishman, for example, in the luxury goods area, are seeing a pickup in Chinese demand.
Tony
Right, of course, luxury goods have done very well. But I think many firms overestimated the impact of opening in China and they claimed it in their earnings and they suffered for it. I think if the Q One number looks too good, people will be suspect. So I think from the from the NBS perspective, they really have to be careful with the number that comes out, because foreign companies are not supporting a good number because that’s not what they’ve put out to their shareholders.
Peter
Stuart, is China still open to business for foreign companies? We’ve seen a lot of crackdowns recently, haven’t we? And now a new one on the consulting sector as well. It says, government officials say, we want foreign companies to come here, in particular US companies. But then you see these latest set of crackdowns which put foreign investors off.
Stuart
Yes, this is one of the confusing bits about China. China is very definitely open to global companies going there, setting up and doing business in certain sectors. There are restrictions in sectors such as in the financial services area, but nevertheless, China still wants people to go there. But it makes companies think hard about making that decision. They want them to go there and be very. Committed to setting up and not sort of mess around with it. They want them to be willing to spend money. They’re looking for larger companies rather than smaller companies to go and set up there. For example, whether it’s manufacturing or in the intellectual areas, they’re willing to look at everybody to come in there. But you’ve got to play by Chinese rules. You can’t play by Western rules. And Chinese rules are often very different to Western rules when managing and running the business in China.
Andrew
Yeah, I think Stuart’s very right there. You’ve got to operate on Chinese rules. And I think for that reason, a lot of companies are changing their strategy as far as china is concerned and making it very much more looking at the domestic market, rather than necessarily just as a manufacturing base for global exports. And of course, if you’d look at it that way, then China’s export market is again going to suffer. People aren’t going to put as much manufacturing into China as maybe they would have done historically.
Peter
Tony final word to you. When companies look at what’s going on in China and see these latest crackdowns on us. Consultancy firms. Is it putting American firms off from going to China and investing in China?
Tony
Oh, yeah, absolutely. Without a doubt.
Peter
Okay, well, thank you all very much for your thoughts there. Short and sweet, but that’s how we like it. That was Tony Nash, who’s the founder and CEO and chief economist at Complete Intelligence. You also heard Andrew Sullivan who is the founder of Asian Market Sense and our regular Tuesday commentator, asian Fund management industry consultant Stuart Oldcroft. Thank you for listening to MoneyTalk this morning. You can find more business and finance information from around Asia in my daily newsletter, which is at peterlewismoneytalk. Substac.com on tomorrow’s program, I’m joined by capital preservation specialist for individuals, NGO on file, and Louisa Fox, china equity strategist at bank of Singapore. With a view from Japan is Nick Smith, who is Japan strategist at CLSA. See you tomorrow.
Andrew
Money talk.