Chinese – US Policy Uncertainty

The recent phone call to from the president of Taiwan to Trump certainly inflated the Chinese and increased uncertainty in Asia.  In contrast to a Clinton victory, China is going to have a much more difficult time assessing what a Trump victory means.

This might have been done on purpose and it is probably best to see whom Trump picks as the Ambassador to China.  In addition, the Secretary of State position will be critical in clearing up the future of Chinese – US relations.  If John Bolton is chosen for Secretary of State, we can expect a much more assertive position against China.

Combined with the anti-China trade rhetoric during the US election, this is certain to increase market uncertainty.  I expect this to have a negative impact on Asian assets in the short-term.

At this point, it is best to wait before jumping to conclusions.  When these two key positions are filled, additional analysis on this issue will be forthcoming.