by Anthony Wile, The Daily Bell:
Daily Bell: Thanks for sitting down with us. You’re an investment specialist in Asia and China so we’ll direct our questions mainly to that area. First, please, give us an overview. What’s going on in Asia? Emerging markets were just hit hard. Was that an expected occurrence?
Jeffrey Tang: Asia, and more broadly the whole world, is affected by what is going on in China and in the US. China’s growth has peaked. While slower growth in China is a consensus now, I think the potential severity and duration is under-appreciated. Demand of commodities other than food/energy has peaked and will go down. Whoever sells to China will suffer, especially if they have used leverage to build capacity. Hence, you will see Indonesia, Australia and Brazil suffer for a long time. Other nations that have over-expanded based on the low cost US$, will also suffer, the process of which depends on how the Fed wants the dollar to behave. If our call on the dollar is the dollar credit cycle has peaked, then we will see countries such as India and Vietnam go back to their natural status, which is low, single-digit growth after the credit rebalance, and export sectors in Taiwan, Japan and Korea lose money on excess capacity.
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