The New Cold War – How China Wins It! ( The New Cold War - Part III: An investor’s Guide)
This piece looks at the goals & architecture of the New Cold War. What does it mean if China wins the Cold War? Then the US fades into a second ranking power - high on weapon tech but low on power projection? That is a high probability outcome based on this analysis of US & Chinese comparatvie strategies which is the core of the report.
The road to that outcome is strewn with investment opportunities - both long and short
There are four assets classes that benefit: China hi-tech equities; the Renminbi (RMB); Gold; and merging market participants in China’s supply chains.
There is a long list of assets classes that would be losers: Europe (suffering the encroachment of Russia and, economically China); the United States (as the dollar is partially dethroned as Global Reserve Currency); Taiwan (subsumed into the Motherland).
And then there are safe havens: Currrencies: SGD, AUD; Sectors: Energy, Shipping and Ship Building, Defense Stocks and, of course, Gold again! (boosted by becoming the accepted international reserve asset).
The Yen and Japanese bonds and equities would suffer from Japan being in the crosshairs of China’s resistance to joint US – Japanese - Korean efforts to contain it.