Protesters seen demonstrating in Hong Kong.
Miguel Candela | SOPA Images | LightRocket | Getty Images
The months-long protests in Hong Kong could come to an end soon, according to strategist David Roche, who said they will “be settled or crushed” before October 1 — the 70th anniversary of China’s National Day.
The way China responds to the situation in the city is crucial in determining how markets and U.S.-China trade talks will be affected, he told CNBC on Friday.
In fact, the politics go hand in hand with the Chinese economy, Roche said.
“I don’t accept this will be a small scale problem in a larger China economy. The reason I don’t is because I believe any intervention (from Beijing) to Hong Kong will be immediately, umbilically, linked to what happens to trade talks and international relations globally,” said Roche, who is president at research and investment consulting firm Independent Strategy.
Roche said “Beijing has to weigh in on two things: the political and economic cause.”
View on the Bund, a waterfront area in central Shanghai.
Frédéric Soltan | Corbis News | Getty Images
Ray Dalio, founder of investment firm Bridgewater Associates, said that the protests have “gone beyond a demonstration,” and has become “a revolution in Hong Kong.”
“It’s disruptive, and has global geopolitical implications,” he told CNBC’s Christine Tan on “Managing Asia.”
However, the situation would only be a “medium-sized risk” for China’s economy, Dalio said, pegging the risk level at a 3 or 4, on a scale of one to 10. From a larger perspective, Hong Kong is just a “tiny place” in a “very big vibrant economy” that is China.
Meanwhile, Wall Street has not yet priced in the events in Hong Kong at this point, according to Tim Seymour, chief investment officer at Seymour Asset Management. He echoed Roche’s sentiments and warned investors to be on alert for the impact, particularly on the economies in Asia.
“Wall Street doesn’t recognize the distraction this could be for any trade resolution,” Seymour told CNBC on Friday.
Trade talks ‘to get worse’
On Wednesday, Trump tweeted that he suggested a “personal meeting” with China’s President Xi Jinping over the Hong Kong crisis.
But Roche said he doesn’t think the meeting will happen.
He said that Beijing is already irritated by the U.S. telling Chinese authorities “how to run their country,” in reference to Hong Kong and Taiwan affairs. If the U.S. continues in that behavior, Beijing’s frustrations will reflected in the trade talks, according to Roche.
Investors’ biggest fear would come true “if trade talks are extended into covering political matters in Hong Kong,” said Roche.
“That is exactly why the trade talks are going to get worse,” he said.
— CNBC’s Weizhen Tan contributed to this report.
UK tech startups see record foreign funding thanks to Amazon, SoftBank
London’s Old Street roundabout, often dubbed “Silicon Roundabout.”
Chris Ratcliffe | Bloomberg | Getty Images
British technology start-ups have attracted more foreign investment since the start of the year than they did throughout all of 2018, according to fresh figures published Wednesday.
U.S. and Asian venture capital investors poured $3.7 billion into U.K. tech companies in the first seven months of 2019, research from industry group Tech Nation and data firm Dealroom showed. Last year, U.K. start-ups raised $2.9 billion from American and Asian investors.
The eye-watering sum was boosted by nine-figure deals from capital-rich companies like Amazon and SoftBank. In May, Amazon led a $575 million funding round for Deliveroo — although that was hit with a warning from the U.K. competition regulator — while SoftBank’s notable U.K. investments include $800 million for Greensill and $390 million for OakNorth.
Including domestic sources of cash, $6.7 billion has been invested into private British tech firms overall in 2019, Tech Nation said, adding that figure could rise to a record $11 billion by the end of the year. The organization said U.S. corporate venture capital funding for U.K. start-ups has risen by 3% in the last six years, while Asian corporate funding is up 20%.
“It’s evidence for us that there’s growing interest for emerging technologies that are gaining a lot of traction in the U.K. from foreign investors,” George Windsor, Tech Nation’s head of insights, told CNBC in a phone interview. “This shows us the U.K. is continuing to perform strongly on the global stage, and for us this is just the start.”
The U.K. pulled in the largest amount of foreign funding for tech companies versus other European countries, the data showed. For example, German start-ups bagged about $800 million from U.S. and Asian investors in the first half of the year, while French firms brought in only $500 million.
One particular bright spot for the U.K.’s tech industry has been financial technology, with plenty of capital flowing into start-ups like Monzo, Checkout and GoCardless. Monzo is backed by U.S. payments firm Stripe, while GoCardless counts tech giants Alphabet and Salesforce as investors.
But Tech Nation’s Windsor said the country has managed to maintain a diverse mix of start-ups in terms of sectors, with the research highlighting health tech firm Babylon and energy supplier Ovo Energy as examples of other companies attracting large sums of money. British artificial intelligence and cybersecurity firms are also an attractive bet for foreign investors, he said.
And while Brexit has been a source of uncertainty for businesses across the U.K., Windsor said it isn’t at the top of tech entrepreneurs’ minds: “Entrepreneurs had problems before Brexit, and they’ll just get about solving them. Brexit is too nebulous a thing for them to tackle as an entrepreneur.”
Trump renews call for Russia to join G-7 group
US President Donald Trump meets Russian President Vladimir Putin on the first day of the G20 summit in Osaka, Japan on June 28, 2019.
Anadolu Agency | Anadolu Agency | Getty Images
WASHINGTON — President Donald Trump renewed calls Tuesday to readmit Russia to the G-7 ahead of the global group of industrialized nations’ summit in Biarritz, France, this weekend.
The group once known as the G-8 included the U.S., Canada, the U.K., France, Italy, Germany, Japan and Russia — but was cut down to the G-7 in 2014 following Russia’s illegal annexation of Crimea.
“I’ve gone to numerous G-7 meetings, and I guess President Obama, because Putin outsmarted him, President Obama thought it wasn’t a good thing to have Russia in so he wanted Russia out. I think it’s much more appropriate to have Russia in and it should be the G-8,” Trump said, referencing the U.S.-led role in suspending Russia’s involvement with the group.
“So I could certainly see it being the G-8 again,” Trump added, noting that the group frequently discusses issues concerning Russia.
Russia’s annexation of Crimea from Ukraine sparked international uproar and triggered a series of sanctions to be placed on Moscow. Shortly after the annexation, a war broke out in eastern Ukraine between government forces and Russian-backed separatists.
The G-8 will be hosted by French President Emmanuel Macron in Biarritz, France, Aug. 24-26. The group meets annually to discuss issues from world energy policy to international security.
Trump previously said Russia should be reinstated to the group as he departed for last year’s summit, held in Canada.
“Russia should be in this meeting,” Trump told reporters before boarding Marine One for the summit. “They should let Russia come back in, because we should have Russia at the negotiating table.”
‘All we have to do is tax their cars’
President Donald Trump answers questions from reporters as he meets with Romania’s President Klaus Iohannis in the Oval Office of the White House in Washington, August 20, 2019.
Kevin Lamarque | Reuters
President Donald Trump believes he has quite the bargaining chip with the European Union.
“Dealing with the European Union is very difficult; they drive a high bargain,” Trump told reporters at the White House on Tuesday. “We have all the cards in this country because all we have to do is tax their cars and they’d give us anything we wanted because they send millions of Mercedes over. They send millions of BMWs over.”
The threat came after Trump signed a deal with the EU earlier this month to boost U.S. beef exports, which partially relieved American farmers who have taken a big hit from the intensified trade war with China. Annual duty-free U.S. beef exports to the EU are expected to nearly triple to $420 million as a result of the deal.
The president had vowed to impose tariffs on imported vehicles and parts from the EU and Japan earlier this year but he decided to delay the duty for 180 days in mid-May.
Trump is set to meet leaders from the EU at the G-7 summit this weekend in France. Many expect the summit to end without a joint communique due to differences on trade.
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