‘Joe Biden Admin’s policies may slightly affect Asian credit terms’

‘Joe Biden Admin’s policies may slightly affect Asian credit terms’

New Delhi: US President-Elect Joe Biden’s administration policies may have a minor impact on the debt situation in Asia and are less likely to deepen trade relations between the US and Asia, a report by Moody’s Investors Service said is.
The report also noted that US policy towards China is unlikely to change dramatically in the early stages of the Biden administration.
In addition, renewed emphasis on improving relations with traditional allies in Asia is likely to face long-term changes in the economic and geopolitical balance that are increasing China’s centrality in the region.
“As a result, we expect the policies of the Biden administration to have the most impact on the credit situation in Asia.”
It noted that outside of China, Biden’s policy could attempt to revive the “axis to Asia” adopted by former President Barack Obama.
The policy was intended to enhance diplomatic and investment ties with the region while retaining the strategic imperative of close security ties with Australia, India, Japan and some Southeast Asian countries (ASEAN) countries.
However, the Biden administration is more likely to focus on increasing security alliances, with less emphasis on increasing trade relations.
“With Japan and Korea, we expect Biden to restore traditional ties under long-term alliances, leading them to lower transactions. As a result, issues related to cost-sharing for military spending It is unlikely to interfere with business issues, resulting in investment. Certainty supports the automotive and semiconductor sectors. ”
To reduce tensions between Japan and Korea, the US should help improve the mutual trade between the two countries. For Korea, however, the geopolitical risk will remain high, with Biden likely to maintain a strategy of maximum pressure on North Korea.
According to the report, the Biden administration is less likely to deepen trade relations between the US and Asia.
It is unlikely to be involved in multilateral trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in the near term.
With the recent completion of the Regional Comprehensive Economic Partnership Trade Agreement for the Asia-Pacific countries, this restraint will accelerate Asia’s trade flows and China’s growing influence, with positive debt implications for the most export-oriented sovereignty in Asia Also, it was added. .
The Moody’s Investors Service report also stated: “With the passage of key legislation, which includes Green Infrastructure in Biden’s proposed fiscal stimulus, barely survives despite the outcome of the Jan. 5 runoff election in Georgia, We hope the US Federal Reserve maintains a slack. Monetary policy to support economic recovery. ”
Fed policy will support capital flows for some Asian emerging markets, which may change current policy challenges, including exchange rate management for those with large external imbalances.
Even under a Biden administration, the US would examine the currency policies of Asian countries with large trade surpluses.

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