Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

PK Basu has 34 years experience covering Asia's economies and markets (equities, fixed income and currencies), including 20 years covering the global economy. He was Chief Economist (SE Asia & India) at Credit Suisse First Boston for 5 years, and Chief Asia (x-Jpn) Economist at Daiwa Securities for a similar period. Among other roles, he was global head of research at Maybank Kim Eng, Malaysia equity research head and chief ASEAN economist at Macquarie, Chief Economist at ICICI Securities, ASEAN economist at UBS and the first chief economist at Khazanah Nasional (where he was co-head of research, and led all agri-business initiatives). PK Basu started his career in the Asia Service of WEFA (Wharton Econometrics) in Philadelphia in 1990, rising to be Director of their Asia Service in June 1994. 
PK's book, "Asia Reborn: A continent rises from the ravages of Colonialism and War to a New Dynamism" won the Tata Literature First Book Award (non-fiction) for 2018. It is the first single chronicle of the modern economic and political history of the whole of Asia (from Iraq and Turkey to Korea and Japan, and everything in between), told from an Asian perspective.

Chief Economist & Political Strategist

Election Cliffhanger Brings Near-Term Nightmare; but a Curtailed Left Helps Biden

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What a Biden Presidency Will Mean for Markets, the Economy and Asia

Trump's "Law & Order" Message Tightens the Polls, but Biden-Harris Still Well Ahead

Biden-Harris Is a Formidable Ticket, but It Has Vulnerabilities from a Leftward Tilt

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

Multiple Countries / Cross Asset Strategy

It is widely believed that a Biden win will be a boon for China, while a Trump victory will be negative for China – and consequently a boon for Taiwan. We believe this is too simplistic: while a Biden win will help China on the trade front (since Biden will likely focus less on bilateral pressure, and resume multilateral trade negotiations), China will soon face increased pressure on human rights (in Xinjiang, Tibet and Hong Kong). In the low-probability event of a clear win for Trump on 4th November (in Asia), Taiwan equities will receive a boost (and China equities will see a knee-jerk sell-off): a good way to position for this would be to go long SGX FTSE Taiwan Index Futures. A good way for investors to position themselves for a Biden win would be to be long the SGX FTSE China A50 Index Futures: we would recommend going long the latter now, in anticipation of the likely electoral outcome. However, once the dust settles, we would recommend switching to the SGX FTSE Taiwan Index Futures – as Taiwan’s underlying fundamentals are more robust than China’s. From a sectoral standpoint, a Biden win should also be more favourable to Asia’s technology sector (Alibaba, Baidu, Tencent, Samsung Electronics, TSMC) as antitrust action (already initiated against Google last week) likely spreads to Facebook and Amazon under a Biden administration.The key factor pointing to a Biden victory is the massive surge of early voting (in person and via mail-in ballots). Reuters reports that 80 million Americans (i.e., 58.5% of the total number of voters who cast their ballot in 2016) have already voted. Informal exit polling suggests that a large majority of these are Democrats or Democratic-leaning voters, while Trump voters are likelier to vote on 3rd November. This could sow chaos, as Trump may initially be reported as leading in key swing states like Pennsylvania and Michigan on Election Day, only to have this reversed after mail-in votes have been counted (something that Trump says he will challenge in the courts). Biden has led in the polls by 6-9 percentage points consistently since August; if more than half of all voters have already cast their ballot, this suggests that Biden already has a massive lead nationwide even before Election Day. Biden’s gaffe on fossil fuels in the final debate (which would normally cost him votes in Pennsylvania, Ohio and Texas) will be much less costly if half of the electorate had already cast their ballots by the time of that debate. Similarly, Trump is unlikely to be able to benefit from the 33.1% QoQ (saar) recovery announced for the US economy in 3Q 2020.The greatest danger to Taiwan in the immediate aftermath of a Biden victory lies in the possibility of China taking military action – i.e., going a step beyond the many provocative military actions China took in October 2020, to an actual attack on Taiwan. The time of confusion for the US between the defeat of an incumbent and the inauguration of the president 11 weeks later (with a possibly uncertain electoral outcome adding fuel to the fire in November) would be the ideal time for China to attack Taiwan. While that would have a disastrous immediate impact on Taiwan’s economy, in the long term it will destroy China’s relationship with the incoming Biden administration, and provoke Democrats in Congress to go even further in legislating against China’s human rights record. If there is no such military attack on Taiwan in November 2020, it will be time to switch to the SGX FTSE Taiwan Index Futures by the end of that month.

It is widely believed that a Biden win will be a boon for China, while a Trump victory will be negative for China – and consequently a boon for Taiwan. We believe this is too simplistic: while a Biden win will help China on the trade front (since Biden will likely focus less on bilateral pressure, and resume multilateral trade negotiations), China will soon face increased pressure on human rights (in Xinjiang, Tibet and Hong Kong). In the low-probability event of a clear win for Trump on 4th November (in Asia), Taiwan equities will receive a boost (and China equities will see a knee-jerk sell-off): a good way to position for this would be to go long SGX FTSE Taiwan Index Futures. A good way for investors to position themselves for a Biden win would be to be long the SGX FTSE China A50 Index Futures: we would recommend going long the latter now, in anticipation of the likely electoral outcome. However, once the dust settles, we would recommend switching to the SGX FTSE Taiwan Index Futures – as Taiwan’s underlying fundamentals are more robust than China’s. From a sectoral standpoint, a Biden win should also be more favourable to Asia’s technology sector (Alibaba, Baidu, Tencent, Samsung Electronics, TSMC) as antitrust action (already initiated against Google last week) likely spreads to Facebook and Amazon under a Biden administration.The key factor pointing to a Biden victory is the massive surge of early voting (in person and via mail-in ballots). Reuters reports that 80 million Americans (i.e., 58.5% of the total number of voters who cast their ballot in 2016) have already voted. Informal exit polling suggests that a large majority of these are Democrats or Democratic-leaning voters, while Trump voters are likelier to vote on 3rd November. This could sow chaos, as Trump may initially be reported as leading in key swing states like Pennsylvania and Michigan on Election Day, only to have this reversed after mail-in votes have been counted (something that Trump says he will challenge in the courts). Biden has led in the polls by 6-9 percentage points consistently since August; if more than half of all voters have already cast their ballot, this suggests that Biden already has a massive lead nationwide even before Election Day. Biden’s gaffe on fossil fuels in the final debate (which would normally cost him votes in Pennsylvania, Ohio and Texas) will be much less costly if half of the electorate had already cast their ballots by the time of that debate. Similarly, Trump is unlikely to be able to benefit from the 33.1% QoQ (saar) recovery announced for the US economy in 3Q 2020.The greatest danger to Taiwan in the immediate aftermath of a Biden victory lies in the possibility of China taking military action – i.e., going a step beyond the many provocative military actions China took in October 2020, to an actual attack on Taiwan. The time of confusion for the US between the defeat of an incumbent and the inauguration of the president 11 weeks later (with a possibly uncertain electoral outcome adding fuel to the fire in November) would be the ideal time for China to attack Taiwan. While that would have a disastrous immediate impact on Taiwan’s economy, in the long term it will destroy China’s relationship with the incoming Biden administration, and provoke Democrats in Congress to go even further in legislating against China’s human rights record. If there is no such military attack on Taiwan in November 2020, it will be time to switch to the SGX FTSE Taiwan Index Futures by the end of that month.  

Biden Vs Trump: How Best to Play the Impact on Taiwan and China