As capacity is filled up over time, the income distribution will shift back again with more inflation. Multinationals are cutting back their capex globally. Our conversations with MNCs show the opposite. As global deflationary pressure squeezes margins everywhere, MNCs must cut costs to maintain profitability. The current Sino-US dispute is indeed unnerving.
Most Asian countries urge a stable relationship between the two.
We see China still putting economic development front and center, as long Taiwan doesn't declare independence. Further, China and the US are intractably intertwined through trade and investment. Restricting China trade would hurt the US equally badly. As long as economic linkages remain on track, markets shouldn't have to worry too much. Morgan Stanley does not undertake to advise you of changes in its opinion or information.