Xi-Biden talks: China is open for business and what that means for stocks
KraneShares CIO Brendan Ahern joins IGTV financial analyst Angeline Ong from San Francisco to discuss what US President Joe Biden’s talks with Chinese leader Xi Jinping mean for AI, defence, and chip stocks.
Ahern adds that a dinner between Xi and US business leaders indicated that China is open for business.
(AI Video Transcript)
Positives and concerns
KraneShares CIO Brendan Ahern discusses the recent talks between Chinese President Xi Jinping and US President Joe Biden. Ahern emphasizes the positive aspects of the talks, like agreeing on fentanyl and resuming military communication, despite Biden referring to Xi as a dictator. They discuss the potential impact of the military communication agreement on defense stocks, but Ahern raises concerns about the US government budget, which could affect defense spending. He also mentions challenges for defense stocks due to healthcare, housing, and education spending.
Export restrictions
The conversation then turns to the export restrictions that the US has placed on Chinese companies. Ahern expresses confusion about the US government's intent and the lack of transparency in the rules for semiconductor exports. This uncertainty makes it difficult for companies to understand and comply with the regulations. Interestingly, US semiconductor companies that rely on revenue from China have not had a significant reaction to the news.
A need for cooperation
Finally, Ahern talks about China's uneven economic recovery and the importance of US-China cooperation. He highlights the need for both countries to work together as competitors rather than adversaries. He contrasts Biden's statements about China with President Xi's assertion that China is open for business and willing to collaborate with foreign companies. The main takeaways from the video are the significance of communication, the challenges and opportunities for defense stocks, the uncertainties surrounding export restrictions, and the need for cooperation between the US and China.
Overall, the video emphasizes the importance of clear communication between countries, discusses potential effects on defense stocks, raises concerns about the US government budget, and highlights the delicate balance of the US-China relationship.
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