British bank Standard Chartered generates a lot of its revenues and profits from emerging markets. Is CEO Bill Winters worried about the escalating trade war between the U.S. and China?
«We are. We are. What we've called out publicly is that we have very little exposure to trade between the U.S. and China specifically. It's a couple of percent of our income. If the trade war is limited to the U.S. and China for us, it won't be a huge deal,» Bill Winters (pictured above), CEO of Standard Chartered, said in a recent interview with Christine Tan on «CNBC’s Managing Asia».
«But, I think there will be an implication for global growth because that inevitably will have some impact on Chinese growth and some impact on U.S. growth,» he added.
Material Reconfiguring
There will be a material reconfiguring of supply chains, Winter expects. «Now, how that supply chain reconfiguring plays out for us is an interesting question. To the extent that Chinese goods or Chinese value added in their production process moved to other markets where we're very active which is what's likely to happen: Vietnam for some of the intermediate goods, Korea for some of the higher spec goods, Indonesia, Thailand, all these countries will benefit from this migration and that's going to be a good thing for us,» he said.
«In the medium to long term, and I'm not going to say that a trade war is a good thing for Standard Chartered because it's not a good thing for the world, but in the medium to long term, we'll be fine, maybe even better off financially,» Winters added.
Impede Capital Flows
«In the end, I think if the trade war escalates, we could expect a slowdown in economic growth which would impact us in various first order and second order ways. I think we could expect disruptions in supply chains. You'd expect some credit problems with people who have been disrupted,» Standard Chartered's CEO explained.
«We could expect a reaction from the Chinese which could be supportive for our business in some ways, to the extent that they might impede capital flows and in other ways that could be hurtful to our business. So it's a mixed bag, and clearly that the best outcome for the world is for the U.S. and China to resolve their differences. And I believe that there is a willingness on both sides to do that, and we'll see whether they can actually close the gap», Winters said.
