Why the US-China power dynamic will shape the investment landscape for decades

Trade relations could impact the world for years

Fears of a global growth deceleration are largely fuelled by worries surrounding a Chinese domestic slowdown, writes Arno Lawrenz, global investment strategist at Ashburton Investments.

Rightly so, as China is not only the world's second-largest economy but the largest economy by purchasing power parity and one of the world's manufacturing powerhouses. Thus, shifting dynamics in China inevitably have a significant impact on the rest of the world. This trend can be observed through China's 'credit impulse', which measures the change in new credit issued as a percentage of GDP. It is considered a key driver of economic and investment growth in China, as well as a significant indicator for the global economy. Its fluctuations are correlated to - and often precede - e...