Asia: Where does your country stand in a Trump presidency?
Asia: Where does your country stand in a Trump presidency?
An extraordinary era ahead with an extraordinary president
Donald John Trump will be inaugurated as the 45th president of the United States of America at midday, 20 January. He will be the first real estate businessman to assume the presidency.
This is high noon in more ways than one for Asia-Pacific real estate markets. Several property developers across the region have vested interests in The Trump Organisation, the company that comprises the demagogue politician’s vast business holdings. He announced this month that he would not divest from his business, but rather just place his sons Donald Trump Jr. and Eric Trump, alongside CFO Allen Weisselberg, in charge of the empire.
Here’s a guide on the property mogul’s relationship with the following Asian countries, and the possible conflicts of interest therein:
Brunei
While Trump’s anti-Muslim stance would seem like vapid rhetoric given his business dealings with Middle Eastern real estate firms, he castigated the sultanate for its oppressive Sharia law and allegedly shady ties to Bill and Hillary Clinton.
Cambodia
Khmer strongman Hun Sen has not been shy about his approbation for Trump. He was one of a few world leaders who publicly wished for Trump’s victory in the November elections. The following month, he pleaded for the US president-elect to waive Cambodia’s decades-old, USD300-million debt to the US Department of Agriculture.
China
On paper and on the airwaves, Trump sounds inordinately caustic against China. However, investigators note that a Beijing-run institution, the Industrial & Commercial Bank of China (ICBC), is the biggest tenant at the Trump Tower in New York City. Another building in the city, which lists Trump as an owner, carries a USD950-million loan from the state-owned Bank of China.
Furthermore, The Trump Hotel Collection CEO Eric Danziger was quoted by Hong Kong media in October that the company would build up to 30 hotels in China this year.
Still, Trump could make good on his threats to levy a 45 percent tariff on imports from China, heralding the spasms of a trade war.
Hong Kong
The Hong Kong dollar, pegged to the US greenback, might seem like a beneficiary of the US Federal Reserve’s forthcoming interest rate hikes this year. However, analysts believe that the advantage to the property sector will be fleeting. “In the first instance, property might seem fine but as real interest rates rise, this sector would underperform quite sharply,” Sean Darby, global head of equity strategy at US investment bank Jefferies, told the South China Morning Post.
During a debate with Hillary Clinton last year, Trump accused Fed Reserve chairperson Janet Yellen of keeping interest rates low for political reasons.
India
Trump has a raft of real estate interests in the country via his licencing deals with the Lodha Group, Panchshil Group, IREO, M3M India, and Unimark Group. Lodha is developing the 75-storey Lodha Trump Tower in Mumbai’s upmarket Worli district, while Panchshil is behind twin Trump Towers in Pune. Lodha Group founder Mangal Lodha is vice-president of the Bharatiya Janata Party.
More: Donald Trump: ‘I am hard to please and pleased when I am’
Indonesia
The Trump Organisation is behind eponymous resort developments in Indonesia by the developer PT Media Nusantara Citra (MNC). The first is a 3,000-hectare, “six-star” resort complex, the first phase of which includes an 18-hole Ernie Els championship golf course. In Bali, Trump’s name will be attached to a 108-hectare integrated lifestyle community, also by MNC. Like his business partner, MNC founder Hary Tanoesoedibjo is mulling a run for the presidency.
Japan
Japanese apparel company Sanei International was in recent talks to acquire a Trump licencing deal through Ivanka Trump. As it turns out, the state-owned Development Bank of Japan is the largest shareholder in the firm.
Laos
Unlike Barack Obama, who became the first sitting US president to set foot in the country last year, Trump has a chilly relationship with Laos’ biggest trading partner, China. FDI into Laos amounted to USD18 billion between 2002 and 2012, mostly from China, followed by Thailand and Vietnam.
Malaysia
Although Trump has no licencing deal at the moment in Malaysia, the son of an ultra-wealthy tycoon in the country heads one of Canada’s biggest property developers. Joo Kim Tiah is CEO of the Holborn Group, which is building the Trump International Hotel and Tower in Vancouver.
More: Donald Trump’s first home was just sold for much less than you’d think
Myanmar
Trump has made no categorical pronouncements so far on his policy toward the newly democratised country, many of whose economic sanctions have been lifted by Obama last year. The formerly junta-led country is set to open up even more with Aung San Suu Kyi’s government consolidating the country’s foreign investment laws. It is likely that Trump would follow the tack of his Republican comrades like John McCain and Mitch McConnell, who have supported democracy in Myanmar.
Philippines
A skyscraper in Manila bearing the US president’s name is due to come online this year. In a prescient move, President Rodrigo Duterte appointed Trump Tower Manila’s developer, Jose E.B. Antonio of Century Properties, as special envoy to the US more than a week before Trump’s win. Trump has since made an overture to Duterte, saying that he tolerates the Philippine leader’s extrajudicial campaign against drug trafficking. This may do little to change Duterte’s enmity toward the US, let alone his newfound political realignment with China. Duterte seems to thrive on the Trump comparisons though, even if they are lazy at best. Trump’s nationalist campaign promises could bode badly for business process outsourcing (BPO), one of the fastest growing drivers of the office real estate sector.
More: Ivanka Trump, scion of brand sophistication
Singapore
Trump is a vocal opponent of the Trans-Pacific Partnership (TPP), a sweeping free trade agreement among 12 Pacific Rim countries. The TPP could have been an indirect boon to wealth creation and sentiment for real estate around the city-state, which originated the agreement.
South Korea
Electronics giant Daewoo has given Trump an early-mover advantage in the country. Completed in 2007, Trump World is a trio of condominium buildings in Seoul, plus three others in the cities of Busan and Daegu.
Taiwan
Trump has riled Beijing by loosening communication lines with the island’s newly elected President Tsai Ing-wen, breaking decades of protocol that recognises only “One China.” A woman claiming to represent Trump was reported to have attempted brokering a real estate deal between the mayor of Taoyuan and The Trump Organization, which has since denied the allegations.
Thailand
The relative stability of the Thai baht, which is not pegged to the US currency, will continue to be attractive to international investors, according to Andrew Gulbrandson, head of research and consulting at Jones Lang LaSalle Thailand. However, “it will be important to keep a close eye on how policies and programs enacted by the new US administration impact global markets, particularly in the case of China, which is one of Thailand’s major trading partners and a growing source of real estate investment into Thailand,” he said.
Vietnam
Vietnam would have been one of the biggest beneficiaries of the TPP. Its economy was projected to grow 11 percent by 2025 because of the trade agreement. Trump may not only kill the TPP but also impose tariffs on Vietnam to compensate for years of trade deficit with the country.
Here’s a great infographic by JLL on the region’s prospects under a Trump rule:
Read next: 5 ways a Trump presidency could impact Asia
Source: Property Report