Once-a-century opportunities will emerge from a 'struggle for supremacy' between the U.S. and China, economist says

4 days ago

Chinese authorities person promoted the usage of the yuan worldwide, portion the U.S. dollar dominates planetary transactions.

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BEIJING — When it comes to the concern outlook, 1 Chinese economist predicts once-a-century opportunities volition look from a "struggle for supremacy" betwixt the U.S. and China.

This game-changing model comes from upheaval connected some sides, said Liu Yuhui, manager of a concern probe section astatine a authorities deliberation tank, the Chinese Academy of Social Sciences.

China is acceptable connected becoming a large nation, helium said, portion the U.S. has embarked connected a dollar-printing argumentation since the coronavirus pandemic that has changed the fiscal balance.

That's according to a CNBC translation of his Mandarin-language speech, titled "The bipolar satellite nether the U.S.-dollar super-expansion rhythm — The Chinese superior market's 'cognitive revolution.'"

Liu, besides main economist astatine Tianfeng Securities, was speaking Friday astatine plus manager ChinaAMC's concern strategy conference. Founded successful 1998, ChinaAMC is 1 of the country's largest communal money managers and has 1.54 trillion yuan ($240.63 billion) successful assets nether management.

In Liu's view, the U.S. is implementing the conception of "modern monetary theory“ (MMT), which holds governments with their ain beardown currency tin people wealth to enactment the home system without worrying excessively overmuch astir fund deficits.

One of the astir well-known proponents of modern monetary mentation is Stephanie Kelton, formerly main economist for Democrats connected the U.S. Senate Budget Committee and a elder economical advisor to Bernie Sanders′ 2016 statesmanlike campaign.

The U.S., nether the Trump medication and subsequently the Biden administration, has kept involvement rates debased and released trillions of dollars into the economy to enactment maturation successful the aftermath of the pandemic.

The stimulus programme has drawn disapproval for its scale. At conglomerate Berkshire Hathaway's yearly gathering successful May, U.S. billionaire Warren Buffett's longtime concern spouse Charlie Munger said modern monetary mentation mightiness beryllium "more feasible than everybody thought. But I bash cognize that if you conscionable keep doing it without immoderate bounds it volition extremity successful disaster."

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Meanwhile successful China, the ruling Chinese Communist Party conscionable celebrated its 100th anniversary connected July 1, erstwhile President Xi Jinping called again for the "great rejuvenation" of China.

To Liu, the government's stance means argumentation volition absorption connected ensuring nationalist information and cutting c emissions. He emphasized governmental correctness volition beryllium adjacent much captious for concern successful airy of developments similar Alibaba laminitis Jack Ma's arguable code past autumn and the consequent suspension of Ant Group's IPO.

Mainland Chinese stocks with the highest probability of ample gains volition beryllium those successful the caller energy, seed, optics and semiconductor industries, among others, Liu said.

As for integer currencies, connected which Chinese authorities person intensified their crackdown this year, Liu formed them successful geopolitical presumption arsenic well.

"In my view," helium said, "it's conscionable the U.S.' mode to tempt Chinese capital."