Trade War Special — Belt and road initiative, investing in china, and escalating trade disputes

Genuine Impact
Aug 21 · 3 min read

Here are the top 3 insights for August 21st.

Today’s Brief

  • Global Risk: The Belt and Road Initiative
  • Blackrock: Investing in China
  • Blackrock: How to navigate escalating trade disputes

The Belt and Road Initiative

  • In the autumn of 2013, Chinese President Xi Jinping set forth a bold new policy vision for the 21st century global economy, calling for the creation of a new Silk Road Economic Belt and complimentary Maritime Silk Road to span the length of the Eurasian supercontinent.
  • This “Belt and Road Initiative” (BRI) promises to link China to both neighbouring and distant regions along its southern and western frontiers through a mass infrastructure investment project, including roads, rail lines, ports, energy pipelines and digital networks.
  • The project also incorporates non-physical components, like policy coordination, monetary integration, trade policy, and person-to-person exchanges.
  • The symbolism of the BRI draws upon important historical parallels.
  • Created by the Han Dynasty over two thousand years ago, the medieval Silk Road once passed through Central and Southern Asia on its way to Europe, facilitating trade and cultural interaction.
  • Seaborn “Spice Roads” complimented the land passage, stretching from the Japanese coast, past China and India, and into the Middle East and Mediterranean Sea.
  • Beijing seeks to recreate these linkages and forge an interstate “Community of Common Destiny” across the region.

Genuine Scores for the top 3 China focused Funds:

  • KraneShares CCBS China Corp High Yield Bond, 89
  • First State China, 76
  • First State All China, 73

Investing in China

  • As China grew to become the world’s second largest economy after the U.S., foreign investors often struggled to benefit from the country’s full range of growth opportunities.
  • This story is changing quickly, as policymakers seek to liberalise access to Chinese stock and bond markets while making them more squarely aligned with international standards.
  • This has material implications for all investors, whether individuals or large, sophisticated institutional investors.
  • Much is changing in China, and the cost of ignoring this emerging opportunity might prove too high, especially over the longer term.

Genuine Scores for the top 3 Greater China focused Funds:

  • Fidelity Funds — China, 70
  • UBS Equity Fund — Greater China, 67
  • Allianz China Strategic Bond, 67

How to navigate escalating trade disputes

  • An escalation in U.S.-China tensions has roiled global financial markets, reinforcing our call to build portfolio resilience.
  • Weak activity data exacerbated declines in global risk assets including stocks and most commodities. Perceived safe-haven assets rallied.
  • China’s industrial output and retail sales data this week are expected to moderate after unexpected gains in the previous month.

Genuine Scores for the top 3 US listed Stocks:

  • Och-Ziff Capital Management Group, 84
  • Qudian, 77
  • Principal Financial Group, 77

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All the best,
Genuine Impact Team

p.s. all Genuine Scores are accurate as of the 16th of August

Genuine Impact

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