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[HONG KONG] Curtailing access to the world's biggest market appears damaging, on the face of it, for the emerging markets relying on exports to catch up to developed nations.
An alternative view: it could be just what the doctor ordered. Economic resilience comes from domestic demand. And US President Donald Trump's protectionist moves give developing countries strong incentives to take on the tough reforms needed to drive productivity, wage growth and consumption at home.
"For all emerging markets, and particularly China, it forces them to continue down the path of the structural reform - which is a very big positive," said Jordi Visser, head of investments at the US$1.3 billion US hedge fund Weiss Multi-Strategy Advisers in New York.
"In China's case there will be a continuous effort on the supply side reform side, the state-owned enterprises reform and the pension system reform."
World commerce has already sagged in recent years, never recovering to the growth rates seen before the global financial crisis. That's put pressure on emerging markets to carry out politically challenging domestic policies, such as reducing corruption, boosting the strength of judicial systems to enforce contract laws, building infrastructure and strengthening healthcare and pension provision so households have confidence to spend rather than save.
"What Donald Trump does is make each country realise that they need to do these things," said Mr Visser, referring to structural reforms. He favours stocks in China's Shenzhen Composite Index, where smaller-sized and technology-focused firms predominate.
Three days after taking office, Mr Trump on Monday withdrew the US from the Trans-Pacific Partnership trade accord, making good on campaign promises to leave or reshape America's international commercial agreements. He also told business leaders he would impose a "very major" border tax on companies that move jobs outside the US.
Some congressmen have separately proposed a border-adjustment tax that would overhaul corporate taxes more broadly to curb imports and boost exports.
Any trade war that roiled global markets could hit investor appetite for riskier emerging nations. His planned fiscal stimulus, along with import curbs, could spur inflation and expectations for Federal Reserve interest-rate increases, boosting the US dollar and making it more costly for developing countries to repay dollar debt.
Mr Visser anticipates optimism about the US will fade in the coming months, spurring other markets to rebound.
"I'm envisioning that the best part of the US side will be in the first quarter, and then I think a lot of the global markets will do better from that point into the end of the year," Mr Visser said in a phone interview Monday.
"The rhetoric on the global relationship of the United States with the rest of the world would lead to outperformance of other markets as the dollar was no longer strong on the back of the economic side."