Joe Biden may have a commanding lead in the polls, but the campaign has a long way to run. It is not over, and for stock markets, there is a lot at stake.
Ironically, China may be better insulated from US political turbulence. The strong economic data is set to push the Renminbi higher. Chinese tech stocks have lagged their US counterparts this year, but they look poised for further gains once the record Alibaba IPO has been absorbed.
A second-term Trump administration will be harder on China than a Democrat-controlled Congress and White House. But, even with Trump in power, China has been forging ahead in technology. Indeed, the recovery from China’s brief pandemic has been swift. US companies still want to do business with China. The more successful ones are determined to leverage China’s expertise and manufacturing capability, to become more competitive. Last week’s strong results for Tesla underlined the importance of China.
The imminent IPO for Alibaba will reinforce one of China’s attributes – Venture Capital. A possible $35bn share sale, a global record, will provide a further boost to government efforts to persuade businesses to list closer to home, rather than in overseas markets such as New York.
But it will do much more than give Beijing bragging rights. Alibaba’s IPO will provide further impetus to the growth in seed capital that has supported innovation in China.
Summary
• Alibaba IPO will boost start-ups, ecosystem
• Tesla helping China in EVs, and reaping the rewards
• Renminbi and Chinese tech stocks set for further gains
