03 Jul

Markets to welcome Yellen’s trip to Beijing to calm US-China tensions

July 3, 2023

By George Prior

The US Treasury Secretary’s trip to China this week will be a hit with investors around the world, affirms the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The comments from Nigel Green of deVere Group come as Janet Yellen heads to Beijing between July 3 and 6 as part of continuing efforts by the Biden administration to strengthen communication between the US and China after a series of spates and instability between the two nations.

He says: “Yellen’s trip to Beijing this week is important to global markets for two main reasons.

“First, she is the top US economic policymaker, meaning that the US government appears serious about rebuilding economic ties between the world’s two largest economies.

“Also, Yellen’s visit to meet counterparts in China comes just three weeks after Secretary of State Antony Blinken visited the country, highlighting the attempts by the Biden administration to revive a more cordial relationship with the emerging superpower.”

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The deVere CEO continues: “Second – and perhaps more importantly – it shows a commitment to globalisation.

“Investors are looking for global leaders to dismiss the prevailing protectionist narrative of the last few years as many countries have looked increasingly inwards, becoming more and more nationalistic.

“Globalization opens-up a wider array of investment opportunities beyond domestic markets. Investors can access a diverse range of industries, sectors, and geographies, allowing them to build well-diversified portfolios.

“History teaches us that by investing globally, investors can gain exposure to companies at the forefront of technological advancements, disruptive business models, and emerging trends. This exposure to innovation can drive portfolio growth and potentially generate above-average returns.”

Yellen’s forthcoming trip also comes a week after China’s premier Li Qiang condemned recent Western efforts to limit trade and business ties with the country, and encouraged international economic co-operation.

In the keynote address at a World Economic Forum event in which he criticised “the politicization of economic issues”, Li said: “Governments should not over-reach themselves, still less stretch the concept of risk or turn it into an ideological tool.”

This denouncing of economic “politicization” and defence of globalization in his speech at the so-called ‘Summer Davos’ address, was, says Nigel Green, “music to the ears of investors around the world.”

Yellen is expected to meet with senior Chinese officials as well as leading US firms with operations in China.

The Treasury says she will discuss “areas of concern” to cool tensions between the two largest economies in the world, ways to work competition between the two powers, as well as subjects where they can cooperate on international issues, such as climate change.

“Financial markets around the world will be cheered by the efforts being made by the superpower economies to foster policies of globalization,” concludes Nigel Green.

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

 


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