How should investors map out strategy amid geopolitical tensions?
World Insight with Tianwei
With the uncertainty over China-U.S. bilateral trade relations and its overall impact on the global economy, how are seasoned investors mapping out their strategy? Jim Breyer, the founder and CEO of the global venture capital firm Breyer Capital, can provide insight. With a long track record of investing in China for almost two decades, Breyer believes no one ends up a winner in a trade war.
"No one wins when there is a trade war, and I am optimistic long term that there are structural changes that can occur between the U.S. and China; I am not very optimistic about the short term resolution," said Breyer. According to him, the issues between China and the U.S. are very complicated. There are so many details that need to be worked out, it will take months to come to any resolution.
At the World Economic Forum in Davos, Chinese Vice President Wang Qishan talked about how China and the U.S. were mutually indispensable, Breyer believes it is real in this case. "I believe that there are certain areas where cooperation is essential, worldwide safety and anti-terrorism activity, global policies and so many levels the U.S. and China should find ways to cooperate."
However, there is also competition between two countries in certain technological areas. "Artificial intelligence being one example, each side is playing a long game trying to win. Depending on the segment of artificial intelligence, China is ahead in some areas, the U.S. is ahead in other areas, but right now, with the possible exception of some technologies coming out of India, it's U.S.-China, China-U.S. in terms of artificial intelligence leadership over the next 5-7 years," said Breyer.
How should investors strategically plan investments in the hi-tech sector amid geopolitical tensions?
“To make the most qualified and long-term technology investment decision,” said Breyer. In the meantime, he does have a Plan B, which is to continue to do what he has been doing for 15 years in terms of investing in China, and continuing to invest in the most promising areas of artificial intelligence and 5G technologies and healthcare in the U.S.
"I may in certain markets slow down investing, given market evaluations; in other cases when I think there is tremendous pessimism in the markets I will accelerate my investment pace and I will continue to make 10-12 new artificial intelligence investments in China each year and 10-12 artificial intelligence investments in the U.S. each year, over the next 5-7 years. I believe artificial intelligence is that important," Mr. Breyer added.
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