CGTN Europe interview with Brendan Ahern, Chief Investment Officer at KraneShares
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00:00Right, so let's talk to Brendan Ahern, Chief Investment Officer at Crane Shares.
00:05Hello, Brendan. What are the main drivers behind this growth predicted for Asia?
00:12Well, China is the main growth engine in China,
00:15but certainly we're seeing a bit of a shift away from U.S. economic dominance
00:20that we've experienced over the last decade to really Asia, ASEAN, Oceania,
00:26actually contributing a lot more intra-region trade.
00:30So I think this is really a story about the rise of Asia,
00:33and certainly China's economy is the central pillar to that story.
00:38How does this compare globally in terms of growth predictions?
00:43Well, certainly here in the U.S., we're looking at a level twice that of the United States,
00:48the world's largest economy.
00:50Certainly in Europe, they've had a number of structural headwinds.
00:53So I think what we're really seeing from China,
00:56where the Chinese government has predicted a 2025 GDP growth of around 5%,
01:02we're seeing really strong opportunities as investors in Asia and particularly China today.
01:09Do you think that the Trump tariffs have already been factored into this growth forecast,
01:15or do you think it could take it off track a little?
01:20Well, I think a lot of the talk about the Trump tariffs is what it will do to China
01:24or what it will do to Asia, and there's very little reflection on what it would do to the U.S. economy.
01:30And certainly for ourselves, replicating the policies that brought about the 1929 stock market crash,
01:37the Great Depression, we really think that an element of this Trump tariff narrative
01:43is more of art of the deal than economic policy.
01:47Because I certainly feel like it would have a erroneous effect on the U.S. economy.
01:52Certainly for an element of China as well as an element of Asia's economy
01:56that's more export-driven manufacturing, that would be a significant headwind,
02:01but that would be a big problem for Japan, for South Korea, for Taiwan, for a whole host of the region.
02:07What do you think the secret of success here is?
02:09There is some talk of a lot of unity within this trading bloc. Is that a factor?
02:15Yes, certainly. You've seen, just in the case of China,
02:18that the percentage of exports going to the United States has really fallen.
02:23I think an element of that is Chinese companies diversifying their own supply chains
02:28as well as their own customer bases.
02:30So you're seeing a lot more interaction between Asian countries from a government level
02:36to spur economic development, to spur trade.
02:40I think where we're seeing evidence of that is just the significant fall-off in trade to the United States.
02:47What is the message for other countries?
02:50You mentioned earlier that the U.S. isn't even at half that potential growth for the coming year.
02:55What are the Asian economies, primarily China, getting right that other countries need to be looking at?
03:02I think you're seeing this at the China Development Forum,
03:06which started yesterday, where you have very significant U.S. CEOs from Boeing, MasterCard, Cargill, Blackstone, Citadel,
03:20that they recognize that there is a real opportunity in China within the financial markets,
03:24but also certainly China's growing domestic consumption.
03:27That's an area that we as investors are very focused on,
03:30that we see a pivot from the Chinese government to try to raise domestic consumption
03:35to really offset some of that potential slowdown in export-driven manufacturing.
03:41If the tariffs are ultimately fully implemented, something that we certainly hope doesn't occur,
03:47but certainly the rise of domestic consumption in China we think is a very significant opportunity in 2025.
03:54Thank you so much for chatting to us.
03:55That's Brendan Ahern, Chief Investment Officer at Crenshares.