"Asia more sure-footed than the US"
Despite the fact that the world's largest economy has been pulled back from the brink of default by an 11th-hour compromise, George Koo, a founder of International Strategic Alliances, a company established to assist US companies form cross-border alliances, says that there is no reason to celebrate.
“The US should be concerned and should be worried,” he told RT. “But I’m not sure that our politicians in Washington are getting the message. It seems like they are in their daily political struggle and battle, and they place a higher importance on winning those political points than taking into consideration the national interests of the United States, as well as the worldwide interests in a financially stable market.”
Seeing the political wrangling in Washington, Koo continued, does not raise investor confidence, and the Chinese investors who are holding much of the US’s debt were already concerned at the beginning of the “financial tsunami” back in 2008.
“Even then they had repeatedly asked the Obama administration to protect the dollar, protect the value of the dollar and keep it from sliding down,” he said. “And while they were doing this, they were investing their monetary resources in high assets. In high assets I would include oil fields, mineral deposits in places like Africa, Latin America, Australia… Recently we see that they are also investing in stock markets, in equity markets, such as Japan.”
Despite that, Koo noted, Chinese investors would like to invest more in the US, but the political atmosphere there has been very unfriendly to Chinese capital.
“I’m very concerned about the future of the United States,” he stated. “I’m much less concerned about what’s going on in Asia. There’s no question in my mind that Asia, including China, but other parts of Asia as well, is very much on the rise. And they seem to be much more surefooted, and they get things done over there, compared to what’s going on in this country.”
Despite the dollar experiencing hard times and China’s position in the world economy strengthening, it is still unlikely the world will turn to the Yuan as a reserve currency anytime soon, believes Daniel Tabbush from CLSA Asia-Pacific Markets.
“I think that would take quite a bit of time, it would take a few years at the very least,” he said. “I think you still need to open up the capital account for that to occur. You have definitely seen many individuals moving into Renminbi deposits in Hong Kong in the past few years but for it to be a reserve currency, that would still take quite a bit of time.”