Date
20 August 2017
Fred Hu, chairman of Primavera Capital Group, said investors are adopting a wait-and-see attitude following Donald Trump's election. Photo: Bloomberg
Fred Hu, chairman of Primavera Capital Group, said investors are adopting a wait-and-see attitude following Donald Trump's election. Photo: Bloomberg

China pausing on US deals, ex-Goldman rainmaker says

Chinese firms are holding off investments in the United States and other overseas markets as they try to figure out the ramifications of a Donald Trump presidency and possible government curbs on overseas acquisitions, according to Fred Hu, a former Greater China chairman for Goldman Sachs Group Inc.

The 53-year-old founder and chairman of Beijing-based investment firm Primavera Capital Group told Bloomberg in an interview that he and other investors are focusing on industries spurred by consumer demand in China.

Primavera has stakes in companies such as e-commerce giant Alibaba Group Holding Ltd. and Yum China Holdings Inc., which operates the KFC and Pizza Hut chains in the country.

Concerns over US-China relations and Trump’s protectionist leanings have put the brakes on a frenetic pace of deals, the report said.

Chinese firms have announced a record US$239 billion of foreign acquisitions this year, more than double last year’s total, according to Bloomberg data.

“For this part of the world, it’s definitely the case that things are on hold now as there’s so much uncertainty,” Hu said.

“There’s still appetite, but at this point in time, people are more cautious, with a ‘wait-and-see attitude.’”

With Trump’s election, the US is no longer seen as a reliable benchmark for comparing geographic risk for foreign investments, the former International Monetary Fund economist said.

“Is the US really more predictable than China today?” Hu said. “Whether you like President Xi Jinping or not, whether you like the political system or not, China is not necessarily more uncertain, more unpredictable than the US, whether on fiscal policy, on monetary policy, trade policy or currency.”

During the campaign, Trump had pledged to label Beijing a currency manipulator and accused China of taking advantage of the US on trade deals.

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