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.

NPC & GDP/Hong Kong/COVID-19/US-China/Mutual Funds

US-China Technology Spat: Risks to US Corporate Profit Expectations and the Real Economy

Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Macroeconomics

The fallout between the US and China from the COVID-19 pandemic could potentially unravel the Phase One trade deal signed earlier this year. Current economic conditions make it difficult for China to significantly ramp up imports from the US of agricultural, manufactured and energy products as stipulated in the agreement.
China's imports from the US in Q1 were significantly lower compared to a year earlier, thereby implying that larger and lumpier purchases will be required in the future to meet Phase One targets of approximately $30bn per month. The strength of the economic recovery in China will ultimately determine the chances of reaching the aggregate $200bn of additional US imports by the end of next year.
China could potentially invoke the disaster clause in the Phase One deal to absolve herself of responsibility for failing to meet Phase One import targets, but it is not "force majeure" in nature. While both China and the US share common short-term goals in trying to revive their economies from the COVID-19 pandemic, deferring tough trade decisions could simply create a lingering sense of uncertainty that would be  detrimental to both companies and financial markets.
Global technological leadership remains the main battleground between China and the US. Future de-coupling in the realm of technology ecological systems will impact Asian supply chains, as well as the world economy due to its importance as a growth driver.
Hitherto, Asian technology supply chains have been to serve both Chinese and US finished goods manufacturers, but this may change as the US restricts China's access to US-sourced technology. Asian supply chains may have to choose between two competing technological ecological systems, while global supply chains will also come under further strain.

The fallout between the US and China from the COVID-19 pandemic could potentially unravel the Phase One trade deal signed earlier this year. Current economic conditions make it difficult for China to significantly ramp up imports from the US of agricultural, manufactured and energy products as stipulated in the agreement.
China's imports from the US in Q1 were significantly lower compared to a year earlier, thereby implying that larger and lumpier purchases will be required in the future to meet Phase One targets of approximately $30bn per month. The strength of the economic recovery in China will ultimately determine the chances of reaching the aggregate $200bn of additional US imports by the end of next year.
China could potentially invoke the disaster clause in the Phase One deal to absolve herself of responsibility for failing to meet Phase One import targets, but it is not "force majeure" in nature. While both China and the US share common short-term goals in trying to revive their economies from the COVID-19 pandemic, deferring tough trade decisions could simply create a lingering sense of uncertainty that would be  detrimental to both companies and financial markets.
Global technological leadership remains the main battleground between China and the US. Future de-coupling in the realm of technology ecological systems will impact Asian supply chains, as well as the world economy due to its importance as a growth driver.
Hitherto, Asian technology supply chains have been to serve both Chinese and US finished goods manufacturers, but this may change as the US restricts China's access to US-sourced technology. Asian supply chains may have to choose between two competing technological ecological systems, while global supply chains will also come under further strain.

US-China Technology Battle Will Force Asia's Hand When China Falls Short of Phase One Deal Goals