While in the USA we are witnessing yet another "purge" from President Trump's team with the removal of the "SuperWhite" strategist Bannon, the political opponents of an America shaken after the events in Charlottesville are busy.
The Russians with Rosneft are trying to penetrate the Asian energy market with the major acquisition of India's Essar Oil and its refining assets, marking yet another important piece of their post-sanctions expansion tactic.
Ma it is the Chinese who prove to be central to all political events on a global level, starting with the North Korean question up to the non-trivial commercial and financial aspects, for example with the interest of Great Wall Motor (GWM) on some activities of FCA, (in seventh place in the world ranking of manufacturers in the automotive sector) as "horse di Troia”, of a new phase of European acquisitions that was previously concentrated on the outlets and accesses of ports and communication routes, from Greece to the Panama Canal, and now passes to the giants of the most prestigious industrial sectors. Also on the commodities market, robust Chinese demand for zinc brought zinc back to a new ten-year record and drove the industrial metals sector.
Great Wall Motor's interest has been confirmed and there is no doubt that FCA has an interest in a technology swap on the electric and computer-guided car sector. On the other hand, the President of GWM, Wang Fengying, specified that the interest in acquiring the part of Fiat Chrysler linked to the Jeep brand, and possibly also RAM for commercial vehicles, matches the goal of becoming the most important producers of SUVs globally. Both stocks will benefit enormously but at the moment the geopolitical picture remains the main concern.
America puts pressure on China and takes advantage of the North Korean leader's "raising" of the head to threaten further sanctions that would create difficulties for the Chinese, whose country has strengthened at the economic level and has shown the ability to heal even the most worrying internal issues. such as the real estate bubble and the spread of the "shadow banking" phenomenon thanks to the firm and authoritarian leadership of Xi Jinping.
The 19th National Congress of the Communist Party of China (CPC) will open in November which will conclude with the appointment of the Standing Committee or Central Committee of the Politburo, decreeing the new leadership of power that will support the Secretary General and President Xi Jinping, as well as Head of the Central Military Commission. This concentration of powers marked, with the turning point on the new economic model and the fight against corruption, a new era of power after that of Mao Zedong and that of Deng Xiaoping. And this phase of Trump's political difficulty leaves ample room for maneuver for the Chinese also to consolidate the ambitious plan of the "Silk Road" ("also called Belt & Road Initiative") financed by the Silk Road Fund, already fed with over 110 billion dollars USA, to support the infrastructural development plans started in 2013 which will strengthen trade ties between Asia and Europe. Practically an open highway after Trump's block on the major agreements of the TPP the Trans Pacific Agreement, between Asia and the USA, and of the TTIP the Transatlantic Agreement between the USA and Europe.
It is clear that, given the mutual military assistance agreement between North Korea and China, Chinese diplomacy is working extremely hard to satisfy yet another package of economic requests from Kim Jong Un. And the recent meetings with the highest representatives of the US Army aimed at strengthening communication between the two superpowers are aimed at avoiding errors of assessment and shared responses to the North Korean threat.
Finally, from a financial point of view, at a time that is proving to be difficult for High Yield bonds especially in the US as well as for emerging bonds, both of which are beginning to register constant outflows, equity markets are set to remain crucial to asset allocation of portfolios that look with increasing interest to the Chinese market as the real big bet for 2018.
