Structural weakness born of China’s 1990s industrialisation will be exposed when the US Federal Reserve removes its stimulus measures and the dollar strengthens, warns the chief global economist at Principal Global Investors.
As nations lock horns in a geopolitical tug-of-war over global supply chains, the effects of RMB liberalisation and hasty tapering in the US could prove destabilising, warns Parag Khanna.
Tapering has sparked both sell-offs and shorts among emerging market assets, with volatility expected to continue throughout the year.
Market opinion over the timing of tapering is divided, but even expectations of it are expected to divide better-placed North Asian markets from their South and Southeast Asian counterparts.
Franklin Templeton portfolio manager Mark Boyadjian says expectations of a December change by the US Federal Reserve are overblown.
Mohamed El-Erian, CEO and co-CIO at Pimco, explains why emerging markets remain vulnerable to volatility even if they still exhibit strong fundamentals.