Choppy waters ahead for emerging markets
Claire Bisseker talks to HSBC’s London-based chief economist, Stephen King, and its local economist David Faulkner about the challenges facing emerging markets at a time when US disengagement with the world, trade protectionism and automation create new risks
Stephen, one of your pet subjects is the rise of emerging markets (EMs) and the decline of the West. Do you still hold this view despite the shift towards trade protectionism and automation? Stephen King: There’s no doubt EMs have done incredibly well over the past 30 to 40 years. Where we have problems now is in the relationship between the US and China. This reflects a profound difference in terms of political values. The American view has been that any economically successful country would gravitate towards liberal democracy. China has not done that and yet threatens to become the biggest economy in the world. So, the US perspective of China has shifted to one that views China as a potential rival, economically and in terms of its political system. I think [US President Donald] Trump’s position is reflective of a broader Washington consensus on how to think about China today. I’ve argued that we’re heading towards a multipolar world, with countries strong in their regions but pot...
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