The fears surrounding the impact of the United States-China trade war are “somewhat overblown” for now, said Piyush Gupta, Chief Executive Officer of DBS Group.
In an interview with Bloomberg Television on Tuesday, November 6, Gupta noted that the flow of goods and services remains largely intact.
“The direct impact will not be very material,” and it is “very hard to shift supply chains.”
In technology, for example, it would take three to four years to adjust manufacturing supply chains, said Indian origin Gupta, according to a report by Todayonline. Even for lower-end goods like refrigerators and vacuum cleaners it may take between 12 to 18 months.
The bigger concern right now, is the potential for things like the financial-market sell-off to create a “feedback loop”.
As for DBS, the bank is keen to seize business opportunities from China’s growing global footprint. Gupta said that most of the company's activities “tend to be outward bound” in China, where the bank serves corporate customers.
For example, the Belt and Road infrastructure initiative, as well as the internationalisation of the yuan present opportunities.
The bank has arranged equity capital funding and real estate investment trust transactions for Chinese companies outside their home market. The domestic Chinese REIT market has the potential to become bigger than the US’s at some point, Gupta added.
But that being said, it remains tough for foreign banks to penetrate the domestic market, as they only have a combined 1 percent share. “Your ability to be relevant to local companies tends to be somewhat limited,” Gupta said.