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The US and China have different strengths in the development of artificial intelligence, DBS said, as the US leads in cutting-edge technologies, while China is developing more cost-effective and efficient AI models.
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The presidents of the two countries are scheduled for two more meetings at APEC in November and G20 in December.
DBS managing director and chief China / HK economist Ji Mo stated that China currently has more cards on hand, with its dominance in rare earths and critical minerals essential to US, China’s role as a major buyer of US agricultural products, its influence in global financial markets, including sizeable holdings of US
Treasuries and its central position in global manufacturing networks, where supply-chain disruptions would reverberate through US industries reliant on Chinese inputs.
She anticipates these factors will contribute to a relatively stable environment for US-China negotiations and expect this to continue for the next year.
DBS also noted that potential of Hong Kong stocks remains limited by global liquidity tightening and weak demand in mainland China, holding a neutral view.
"The market has already priced in expectations of more than three rate hikes by the US Federal Reserve, which is more hawkish than our estimate of two more hikes," said Moxy Ying Yuhua, equities strategist at DBS.
