Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Revolution/ Assimilation/ Education/ Confrontation/ Rectification

China Growth Outlook: Facing Headwinds, While Exchange Rate Relief Depends on Fed Policy Changes

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Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Macroeconomics

Despite recent geopolitical tensions, the economic nexus between China and the US remains tight and, consequently, supply chain dislocations due to recent COVID-19 lockdowns will continue to impact both countries. Continued congestion and backlogs at China's ports could result in shortages of consumer goods in the US at a time renown for inventory building ahead of the Christmas shopping season. 
The significant delays in delivering products from China to the US is also attributable to lack of spare shipping capacity, congestion at US ports, as well as the apparent inability of the US intermodal transportation network to deal with high import volumes. Import prices into the US from China have risen in 2021 due to rising logistical costs, thereby raising the spectre of pass-through by wholesalers and retailers to US consumers that could test the Fed's inflation outlook.
China cut export prices in the aftermath of the Asian financial crisis to preserve her exports' market share in the US following devaluations elsewhere in Asia. Export prices were cut evenly more aggressively following the global financial crisis due to the intensity of deflationary pressures within the US economy. China's export prices have been falling since 2020, but history suggests the pending arrival of a rising trend as the global economic recovery continues, thereby implying a lower safety valve for US inflation.
China's current growth headwinds do not stem from financial crises, but have their origins in lockdowns related to the spread of the delta variant of COVID-19 and government crackdowns on certain sectors of the economy. Meanwhile, the arrival of a declining population has forced the government to address past policy mistakes and shift economic management towards long-term objectives rather than using counter-cyclical policy to reduce growth headwinds.

Despite recent geopolitical tensions, the economic nexus between China and the US remains tight and, consequently, supply chain dislocations due to recent COVID-19 lockdowns will continue to impact both countries. Continued congestion and backlogs at China's ports could result in shortages of consumer goods in the US at a time renown for inventory building ahead of the Christmas shopping season. 
The significant delays in delivering products from China to the US is also attributable to lack of spare shipping capacity, congestion at US ports, as well as the apparent inability of the US intermodal transportation network to deal with high import volumes. Import prices into the US from China have risen in 2021 due to rising logistical costs, thereby raising the spectre of pass-through by wholesalers and retailers to US consumers that could test the Fed's inflation outlook.
China cut export prices in the aftermath of the Asian financial crisis to preserve her exports' market share in the US following devaluations elsewhere in Asia. Export prices were cut evenly more aggressively following the global financial crisis due to the intensity of deflationary pressures within the US economy. China's export prices have been falling since 2020, but history suggests the pending arrival of a rising trend as the global economic recovery continues, thereby implying a lower safety valve for US inflation.
China's current growth headwinds do not stem from financial crises, but have their origins in lockdowns related to the spread of the delta variant of COVID-19 and government crackdowns on certain sectors of the economy. Meanwhile, the arrival of a declining population has forced the government to address past policy mistakes and shift economic management towards long-term objectives rather than using counter-cyclical policy to reduce growth headwinds.

Deep Sino-US Economic Nexus: Logistics Expose Downside, While Beijing Battles Demographic Headwinds