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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: abuelita who wrote (219094)	1/8/2026 6:14:17 AM
From: TobagoJack	Respond to of 219578

Foundation keeps doing what Foundation does scmp.com Chinese stocks could be biggest winner of Venezuela fallout Amid rising fears over an AI bubble and geopolitical strife, China’s push for self-reliance has left it more insulated from global storms Nicholas Spiro Published: 4:30pm, 8 Jan 2026 For some time now, global economic cycles and financial market trends have been less US-centric and more multipolar in nature. This might seem counterintuitive given the long period of “American exceptionalism” stemming from the US dollar’s role as the world’s leading reserve currency, America’s deep and transparent capital markets, huge natural and human resources and the dominance of its technology companies in global equity indices. Deeper forces have been at play in the past several years, driven by far-reaching geopolitical shifts that have slowed the process of globalisation and challenged the Western rules-based international order. In 2019, Morgan Stanley said a “slowbalisation” trend was emerging whereby the global economy was becoming more decentralised, with more “trade among regional players and allies, and characterised by a shift from a few global economic powers toward multiple political and economic centres”. US President Donald Trump is strongly in favour of a multipolar world. This is in part because he sees it as a convenient alternative to the liberal, multilateral global order that the United States itself helped establish and further entrenched following the end of the Cold War. Trump’s assault on the global trading system last year sounded the death knell for predictable, rules-governed trading relationships with the world’s biggest economy. Although the president’s partial climbdowns on tariffs helped blunt the impact on markets, Trump’s recklessness revealed his disdain for global institutions and his transactional approach to foreign policy, underpinned by the raw politics of power. Trump’s decision to attack Venezuela and abduct its president Nicolas Maduro, on the other hand, not only shows the degree to which he feels unconstrained by rules and norms. It also shows how strongly he favours a global order in which the world’s great powers carve out their own spheres of influence. There are big risks associated with the “Donroe doctrine”, Trump’s version of 19th century US president James Monroe’s belief that the western hemisphere is America’s sphere of influence. Regime change in Venezuela could require US boots on the ground, which runs counter to Trump’s pledge to not start new wars. Moreover, capitalising on Venezuela’s vast oil reserves is easier said than done given acute challenges in boosting the nation’s oil output amid a global supply glut. Trump has also taken geopolitical risk to a whole new level. Europe is now fretting about US military action in Greenland, while other Latin American countries are also in Trump’s crosshairs. What is striking is that there is no ideological basis for Trump’s actions. It is all about power. “Fantasies of dominance and control and dreams of oil-soaked riches played their part. So did ego”, Nobel Prize-winning economist Paul Krugman wrote in a Substack post. Trump’s contempt for the rules-based global order accelerates the shift to a multipolar world. Gaining access to Venezuela’s oil reserves would give the US more leverage over the global energy market. However, economic security today has more to do with technology, services and human capital, which is why Asia stands to benefit from multipolarity. Morgan Stanley believes China’s artificial intelligence (AI) ecosystem creates investment opportunities as “industry policy looks to increase self-sufficiency”. Bank of America said China is “competing across nearly every level of the supply chain”. “It has two of the top 5 global clouds, ranks No 1 globally in 5G base stations, robust AI research and patenting, and rapid data centre growth. … With sufficient power supply, China is also well positioned to manage the challenge of surging energy demand from data centres.” At a time when fears about a bubble in AI stocks are intensifying, China’s tech sector is less vulnerable to a broad-based deterioration in sentiment because of its lower correlation with the global tech cycle than other tech-driven markets in Asia. The narrative of a “self-reliance trade” in China’s equity market has taken hold, underpinned by what Macquarie calls “paralleled technology systems”. The strong appeal of China’s more insulated tech sector contributed to the outperformance of global stocks last year as investors diversified away from the US. The MSCI All Country World ex-US Index, a gauge of global shares excluding the US, outpaced the benchmark S&P 500 index by the widest margin since 2009. Still, while Chinese equities might be a winner from the shift to a more multipolar world, other Asian markets with deeper links to the global AI supply chain, such as South Korea and Taiwan, are more vulnerable. “Multiple power bases mean multiple challenges for companies doing business on a global scale,” Morgan Stanley said. A man walks past a large screen showing an advertisement for the Samsung Galaxy Z Fold7 smartphone at Gwanghwamun Square in central Seoul on January 8. Samsung said it expected its fourth-quarter profit to reach a record 20 trillion won (US$13.8 billion). Photo: AFP According to Societe Generale, more than half of the revenue of Asia’s three biggest semiconductor companies – Taiwan Semiconductor Manufacturing Company and South Korea’s SK Hynix and Samsung Electronics – comes from the US. Moreover, among Asia’s leading stock markets, South Korea and Taiwan are the most sensitive to US financial conditions. Even in China’s equity market, a self-sustaining AI ecosystem only goes so far. Corporate earnings in the consumer discretionary and energy sectors fell steeply last year, preventing a sharper earnings recovery from taking hold. Innovation-led growth cannot fully compensate for strong economic and structural headwinds. However, China is best placed to capitalise on the transition to a multipolar world. Beijing’s deployment of export controls on rare earths and its dominant position in the tech supply chain are major sources of resilience in the shift to a more fragmented and contested global order. The case for investing in Chinese equities is growing stronger.