Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Economy/ CCP & Business/ Taiwan/ US-China/ EU-China

Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Macroeconomics

<p>Despite their mixed record in correctly anticipating election results in recent years, financial markets are discounting a very benign form of de-coupling between China and the US. Equity investors in the US have not embraced the possibility of a Biden victory in the Presidential Election and, consequently, the prospect of higher taxes and greater regulation.</p>
<p>The initial fears of supply chain dislocation due to forced on-shoring by US corporations under the Trump Administration have failed to subsequently materialise. China has spectacularly built up her productive capacity for information technology products, a feat which neighbouring countries will struggle to replicate in the near future.</p>
<div>China should learn from the experience of Japan during the 1980s about the US taking protectionist measures to protect its strategic technological leadership. Unintended consequences of the Trump Administration's attempt to choke off Huawei's access to chips could be higher prices and lower innovation in the realm of telecommunications equipment.</div>
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<div>A range of potential US-China de-coupling scenarios exist with varying degrees of severity, including China being barred access to US dollars and the establishment of a gold standard for the yuan. Barring China from the SWIFT system to access dollars would create a massive deflationary shock, while building the necessary gold reserves for a Chinese gold standard would drive the dollar price of gold up and, consequently, the US currency down</div>
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<div>Competing ecological systems for information technology between China and the US will raise governance costs for global corporations wishing to undertake cross-border business. The Trump Administration's willingness to cite national security concerns in the realm of data governance could render some forms of cross-border activity involving information technology unviable in the future. </div>

Despite their mixed record in correctly anticipating election results in recent years, financial markets are discounting a very benign form of de-coupling between China and the US. Equity investors in the US have not embraced the possibility of a Biden victory in the Presidential Election and, consequently, the prospect of higher taxes and greater regulation.
The initial fears of supply chain dislocation due to forced on-shoring by US corporations under the Trump Administration have failed to subsequently materialise. China has spectacularly built up her productive capacity for information technology products, a feat which neighbouring countries will struggle to replicate in the near future.
China should learn from the experience of Japan during the 1980s about the US taking protectionist measures to protect its strategic technological leadership. Unintended consequences of the Trump Administration's attempt to choke off Huawei's access to chips could be higher prices and lower innovation in the realm of telecommunications equipment.

A range of potential US-China de-coupling scenarios exist with varying degrees of severity, including China being barred access to US dollars and the establishment of a gold standard for the yuan. Barring China from the SWIFT system to access dollars would create a massive deflationary shock, while building the necessary gold reserves for a Chinese gold standard would drive the dollar price of gold up and, consequently, the US currency down

Competing ecological systems for information technology between China and the US will raise governance costs for global corporations wishing to undertake cross-border business. The Trump Administration's willingness to cite national security concerns in the realm of data governance could render some forms of cross-border activity involving information technology unviable in the future. 

Financial Markets Discount Benign China-US Disconnect, but Other Scenarios Remain on the Table