US-China trade war to fuel shift to alternative assets as stock markets tumble
Investors should diversify and pay closer attention to alternative assets amid stock market volatility caused by the tariff war, according to experts.
Advertisement
As US President Donald Trump acts on his campaign promises, including tariff increases that have heightened tensions between the US and its global trading partners, especially China, investment specialists are warning against making rash decisions given the markets' unpredictability.
'This is a timely opportunity to diversify into alternative [assets] such as private credit, private equity and hedge funds,' said Samuel Rhee, co-founder and chairman of Endowus, a Singapore-based investment platform.
He added that private credit funds offer stability, as their assets were less correlated to market volatility, allowing for more secure long-term investments.
02:40
China raises tariffs on US goods to 125% as Xi calls on EU to resist 'unilateral bullying'
China raises tariffs on US goods to 125% as Xi calls on EU to resist 'unilateral bullying'
Trump fired the first salvo in the current trade war, announcing so-called reciprocal tariffs on America's trading partners on April 2, including a 34 per cent levy on China, which has run a massive trade surplus with the US. The back-and-forth retaliation between Washington and Beijing has pushed US tariffs on Chinese goods to 145 per cent and on US exports to the mainland to 125 per cent.
Advertisement
These developments saw Hong Kong's benchmark stock index sink 13.2 per cent on April 6, its worst showing since the Asian financial crisis in October 1997. The Hang Seng Index eventually lost 8.5 per cent last week, the most in five years. Markets on the mainland and across the globe also slumped as a result of the trade war.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
RTHK
2 hours ago
- RTHK
China export growth slows on plunge in US shipments
China export growth slows on plunge in US shipments While Chinese exports to the United States plunged, they spiked to regions such as Asean, Europe and Africa. Photo: Xinhua China's export growth slowed in May while imports also dropped more than expected, as trade tensions remain high between Beijing and Washington despite the tariff truce they reached last month. Official figures released by the General Administration of Customs on Monday showed that exports rose by 4.8 percent year on year to US$316.1 billion last month. That growth rate fell short of estimates of a 5 percent jump in a Reuters' poll and was notably lower than the 8.1 percent annual rise seen in April despite US President Donald Trump's 145 percent tariffs on Chinese goods taking effect that month. Imports, meanwhile, decreased by 3.4 percent to US$212.9 billion, compared with a 0.2 percent decline in April, and was also much steeper than the 0.9 percent fall that economists had estimated. Those figures left the country with a trade surplus of US$103.2 billion for the month, up from US$96.18 billion in April. The latest fall in exports were visibly dragged down by shipments to the United States, which plunged 34.4 percent last month. That was much sharper than the 21 percent annual decline registered in April and marked the sharpest monthly drop in more than five years – since February 2020. And the export decline came despite Beijing's reaching a tariff agreement with Washington on May 12, which saw the two sides roll back most of the sweeping tariffs imposed on each other's goods for 90 days. Shipments to the Southeast Asian bloc, Asean, however, continued to rise, jumping nearly 15 percent, while those to European Union nations and Africa rose 12 percent and over 33 percent, respectively. The latest agreement by China and the United States, two of the world's economic superpowers, has set the additional US levies on Chinese goods to 30 percent and countervailing Chinese duties on US imports to 10 percent, on top of some retaliatory tariffs imposed earlier on certain American goods. But despite the tariff truce, the two superpowers are still locked in disputes over key trade issues, such as Chinese export controls on rare earth minerals and US curbs on chip-related exports to China. Leaders of the two nations have agreed to further talks, with a new round of high-level bilateral trade meeting set to take place in London later today, led by Premier He Lifeng and US Treasury Secretary Scott Bessent, along with two other US officials. For the first five months of the year, China's exports grew by 6 percent year on year while imports declined 4.9 percent. Exports to the United States retreated 9.7 percent while those to Asean members grew by 12.2 percent.
HKFP
3 hours ago
- HKFP
Social media, e-commerce platform Xiaohongshu – or RedNote in English – sets up office in Hong Kong
Chinese social network and e-commerce platform Xiaohongshu, known in English as RedNote, has set up an office in Hong Kong – its first outside mainland China. Finance chief Paul Chan officiated at an opening ceremony on Saturday, saying the new office would 'enhance the visibility of Hong Kong's tourism, retail, dining and creative industries,' according to a government press release. Invest Hong Kong (InvestHK) said the move would help ensure enhanced services for cross-border users and brands. 'As a leading lifestyle community from China, Xiaohongshu's presence will foster creative collaboration among local content creators, brands and organisations, and promote East-meets-West cultural exchanges and content marketing development among Hong Kong, the Mainland and the global markets,' InvestHK's Director-General of Investment Promotion Alpha Lau said. Founded in 2013, Xiaohongshu – which literally means 'little red book' – allows its young user base to share fashion, beauty, travel, food, and other tips as a hub for consumption decision-making. It is particularly popular among affluent Gen Z users in urban China, according to Bloomberg. It was thrust into the international spotlight in January, gaining an influx of American users amid fears that the US would shut down the popular TikTok video app, owned by Chinese tech firm ByteDance. However, it is also known for heavily censoring or limiting topics sensitive to Beijing. Taiwan's government banned public servants from using the app on official devices in 2022 over national security concerns.
South China Morning Post
5 hours ago
- South China Morning Post
Hong Kong stocks rise as US, China negotiators gear up for trade talks
Advertisement The Hang Seng Index rose 1.3 per cent to 24,109.48 at 9.55am local time. The Hang Seng Tech Index jumped 2.3 per cent. On the mainland, the CSI 300 Index and the Shanghai Composite Index both added 0.3 per cent. Delivery platform Meituan rose 4.5 per cent to HK$148.10 and short video platform firm Kuaishou Technology advanced 4.3 per cent to HK$61.65. Other large tech stocks also performed well: added 4.1 per cent to HK$134 and Alibaba Group Holding rose 2.1 per cent to HK$119.10. Alibaba owns the Post. On the flip side, Geely Automobile Holdings dropped 0.9 per cent to HK$17.78 and electric-vehicle maker BYD fell 0.7 per cent to HK$400.40 amid an industry-wide price war. Advertisement Top trade negotiators from the US and China were scheduled to engage in talks in London on Monday, raising hopes that tariff tensions could ease as both nations seek to bolster their economies.
