Morning Briefing As Trump Scares Investors, Asia Beckons

German firms see new opportunities in Asia and are stepping up involvement in the region: France’s mainstream conservatives just can’t seem to get on track.

While President Donald Trump pushes patriotism and populism, Asia is banking on business. “Asia is opening up, while we’re seeing protectionism elsewhere,” said Stuart Gulliver, the CEO of London-based HSBC, at Handelsblatt’s Asia Business Insights conference yesterday in Düsseldorf. German firms see new opportunities in Asia and are stepping up involvement in the region. If American voters want a reliable indicator of their president’s performance so far, they shouldn’t study the polls but the flow of investment heading for Asia.

Shi Mingde, China’s ambassador to Germany, outright dared 300 managers at the conference to satisfy his country’s huge hunger for growth and innovation.  Mao Zedong once said: “Political power grows out of the barrel of a gun.” His successors have a new twist: “Political power pours out of factory chimneys.’’

France’s mainstream conservatives just can’t seem to get on track. Top candidate François Fillon is accused of using public money to buy his wife a fake job. Former president and party leader Nicolas Sarkozy is to stand trial on allegations his 2012 re-election bid was fueled with illegal contributions. The flood of negative publicity comes just weeks before presidential elections in April and May. If boosting the right-wing Front National was the goal, then the establishment conservatives have finally found their groove.

In the end, populism doesn’t pay off, if the latest polls in Greece mean anything. The approval ratings of Greek Prime Minster Alexis Tsipras’ left-wing populist Syriza Party have plummeted to 16.8 percent from 35.5 percent since elections in 2015. Clearly, you can’t build a country on populist rhetoric alone.

Global markets are increasingly nervous ahead of elections in France, Germany and Italy. Investors fear a collapse of the euro zone. They’re demanding significantly risk premiums on Italian government bonds. The yield spread between French and German government bonds has widened to a level last seen in early 2014. The divide suggests growing fears that the Franco-German alliance may not survive the next round of voting. Many newspapers are already writing: “The euro crisis is back.’’ But the truth is, it never went away – it’s just been hiding behind the backs of Donald Trump and former British Prime Minister David Cameron.

In the situation rooms of Germany’s mainstream parties, they’re scratching their heads: How to explain the unexpected rise of Martin Schulz, the Social Democrat challenger closing in now on Angela Merkel in the polls? How did this relative unknown in German politics grab so much voter sympathy, so quickly? Where is that old Merkel magic? Tacticians in both camps are grabbing for the hand rails as they try to sketch out campaign strategy in uncharted, choppy political waters. As John Lennon once wrote: “Life is what happens to you while you’re busy making other plans.’’

Image of the Day

The Syrian artist Manaf Halbouni created his art installation "Monument" in Dresden, Germany, from three passenger busses. It is intended as a reminder of both the recent destruction in Aleppo and in Dresden during World War II.