Trade tensions won't break Asia's recovery but downside risks have risen
The uncertainty created by an extended escalation of trade tensions will pose a credible threat to the global business cycle.
Add BT as a preferred sourceCHINA'S policy easing, which is getting into full swing, has enabled its economy to stabilise, and we have seen some tentative signs of spillover into the rest of the region.
However, the recent re-escalation of US-China trade tension raises the question of whether this could thwart the nascent growth recovery in China, and what implications this may have for the rest of Asia.
The duration and intensity of trade tensions are critical to determining the outlook, and we have assumed the latest escalation will last for three to four weeks in our base case, as we think market weakness and continued talks could prompt both sides to eventually reach a deal.
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