Executives at the world’s largest asset manager have assured investors in China that the prospect of a trade war with the US should not be a deterrent in the long-term, reports Bloomberg, as both economies will adjust to any further tensions.
“It’s that adjustment that’s painful,” said Mark Wiseman, global head of active equities at BlackRock. “If you take a 10-year view on the Chinese economy, from an economic perspective it will smooth itself out.”
This doesn’t mean that there won’t be a short-term scare, however. As BlackRock CEO Larry Fink said earlier in the week, if US President Donald Trump goes through with his talks of tariffs on a further $200 billion of Chinese goods, mainland stocks could fall up to 15%.
But according to Martin Small, head of BlackRock’s US ETF business iShares, the inclusion of over 200 mainland A-shares into flagship MSCI indices last month will provide a long-term tailwind for Chinese markets.
Index inclusion “strengthens the recognition of public market multiples,” said Small. “Public market multiples are really important to how people think about making allocations in private markets, particularly in private equity.”