Emerging markets fund manager and founder of Mobius Capital Partners LLP, Mark Mobius, on Wednesday said that Asian nations will be most affected by the tariff war between Beijing and Washington as they have China as their major trade partner.
“It is not good for emerging markets (EMs) at least in the short-term because there are a lot of adjustments we made and particularly in Asia because most of the Asian nations have their major trade partner as China,” said Mobius.
However, he said there are some countries that will benefit from manufacturing shifting away from China. “So we have to balance out and look very carefully at who is going to benefit and who is going to be hurt.”
Investor sentiment has been cautious following the recent escalation in the ongoing trade war between the US and China. Meanwhile, the Editor-In-Chief of Chinese state-run newspaper The Global Times said in a tweet on Tuesday that China is not putting much emphasis on trade talks and that it is becoming more and more difficult for Washington to press Beijing to make concessions.
“I think the Chinese government now has the feeling that they can manage those pressures. Certainly, so far the capital account management has worked well and we haven’t seen those pressures develop. But I think the Chinese will use this tool very sparingly to send a political signal to Washington because at one level, it isn’t going to be enough to fully offset the effects of the tariffs and it comes with some risks,” Eswar Prasad, senior professor of Trade Policy, Cornell University, said.