Concerns Over China-US Trade Relations
Gordan Zhang, a senior fellow at the Gatestone Institute, has raised alarms regarding the trade relationship between China and the United States. He suggested that China has not honored its commitment to buying 12 million tons of soybeans from Kudlow by year-end.
Investors often look to emerging markets for growth, and China typically fits that profile. But there are significant risks involved. The country remains opaque, has serious human rights concerns, and its capital markets lack transparency.
With Donald Trump as president, the relationship between the two largest economies has worsened. This has been particularly evident in discussions around tariffs and rare earth minerals.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| Vexy | Vanguard World Fund Emerging Markets (excluding China) | 76.97 | +0.15 | +0.20% |
To mitigate risks linked to China, Vanguard has introduced a strategy targeting other significant emerging markets like Brazil, India, and Taiwan through the Vanguard Emerging Markets Ex-China Exchange Traded Fund (VEXC).
“VEXC offers investors an affordable way to access emerging market stocks while avoiding risks associated with China-based companies,” a Vanguard representative noted.
The ETF, which launched in September, aims to reflect the FTSE Emerging Ex-China Index and includes over 1,000 firms, such as Taiwan Semiconductor and Infosys. It’s recommended for long-term investment and has assets nearing $50 million, with a return of roughly 4% since inception—slightly trailing behind the benchmark’s 4.9% rise.
For 2023, the FTSE Emerging Ex-China has increased by more than 26%.
President Trump talks by phone and plans to meet with Chinese President Xi
Trump’s approach to China can seem quite variable. In a recent phone call with Xi Jinping, he described their conversation as productive.
“I just had a very nice phone conversation with President Xi of China,” Trump shared on Truth Social. “We discussed various subjects, including issues like Ukraine, fentanyl, and agricultural products. Our relations with China are very strong!” This followed up on earlier discussions had in South Korea that were deemed successful.
President Xi has extended an invitation for Trump to visit Beijing in April, a plan that Trump has accepted.
Trump remarked, “I look forward to communicating frequently, and I’m scheduled to make a state visit to the U.S. later this year.”
