文档介绍：China Market Strategy
CONNECTIONS SERIES
China-US trade conflicts
Incremental sector impact if China es the largest importer of cars, natural gas and beef from the US
%
%
% of apparent beef consumption
% of apparent gas consumption
% of sales by all auto % of sales by key auto enterprises enterprises
(2017) %
%
Source: CEIC, , WIND Database
In view of the ongoing US-China trade disputes, we evaluate the potential implications, drawing from the insights of our China and global analysts.
Underlying tensions and promises. The near-term discussion is likely to focus on expanding US goods exports to China. We expect energy, agricultural products and automobile (including parts) to be major areas that China will expand its imports in. The US deficit is expected to reduce by ~US$41 bn, if China es the biggest importer of autos, beef and natural gas from the US. The impact on sector earnings level in most cases would be small though. Opening up the financial sector would probably be a major point of services sector liberalisation.
The future of China as the workshop of the world. Continuous trade disputes could lead to China’s reducing dominance as a global production base, particularly in electronics. This could have some negative consequences on China’s technological development push, and the impact may be much bigger in the more healthy coastal provinces. Mexico is well positioned to increase its global market share at the expense of China. More generally, elements of petitive threats witnessed by non- Chinese panies across global end-markets could abate.
Impact on the stock market. The near-term impact would likely be focused on energy, auto and tech hardware. Imported cars, including European brands, and luxury car dealers in China are likely to be key beneficiaries, and the same goes for Chinese gas distributors and the US O&G producers in the right location. Chinese downstream electronics’ manufacturers could be hurt by production base diversifi