We believe the continued shift in economic power towards Asia to be an “unstoppable trend.”

Against this backdrop, strategic competition between the US and China is set to intensify.

However, both countries are focusing more on domestic development, with state capital playing a bigger role.

We believe this represents a more favorable environment for global investors than “heightened confrontation” under Trump.

Positioning portfolios for polarization

Likely investment beneficiaries of G2 polarization include producers of semiconductors, satellites, software, renewable energy, and commodities in the US and China, as well as markets in Southeast Asia.

Greater spending is likely to boost renewable energy and electric vehicles, as well as the commodities involved.

The pandemic has slowed the progress last year, but we believe it will resume, with more investment in traditional infrastructure.

Likely beneficiaries include companies involved in infrastructure, industrial automation, regional trade and real estate.