Global dominance is a zero-sum game
It’s getting tense between China and the US. Investors with global exposure will need to tread carefully.
Recent developments have escalated the situation between the two.
1/ Taiwan-China: The US vowed to defend Taiwan — and China wasn’t happy about it.
2/ Semiconductors: On Oct. 7, the US announced new export restrictions of certain high-end chips — aimed at crippling China’s military developments.
Here’s what some experts are saying (NYT):
- “It’s [chip restrictions] an aggressive approach” that could impair China’s development of critical tech — per Senior Fellow of CNAS Emily Kilcrease.
- Beijing could retaliate with restrictions on American companies — per Senior Fellow at Yale Law School Samm Sacks.
The man in charge: China’s President Xi Jinping is expected to be re-elected for a 5-year term — extending his 10-year rule. Xi has placed himself in charge of domestic and foreign policies, the military and the economy.
The next five years will be ”one of the most highly uncertain periods we have had in recent memory,” — per MacroPolo’s co-founder Damien Ma (WSJ).
It’s a dangerous world. A strong USD and uncertain global conditions are negatively impacting stocks that make most of their sales outside the US. These developments only help build the case for staying domestic.
Above is a list of stocks that generate a strong portion of their sales internationally and domestically.