US House Speaker Kevin McCarthy greets Taiwanese President Tsai Ing-wen at the Ronald Reagan Presidential Library in Simi Valley, California. AFP
US House Speaker Kevin McCarthy greets Taiwanese President Tsai Ing-wen at the Ronald Reagan Presidential Library in Simi Valley, California. AFP
US House Speaker Kevin McCarthy greets Taiwanese President Tsai Ing-wen at the Ronald Reagan Presidential Library in Simi Valley, California. AFP
US House Speaker Kevin McCarthy greets Taiwanese President Tsai Ing-wen at the Ronald Reagan Presidential Library in Simi Valley, California. AFP

Taiwan leader and House Speaker Kevin McCarthy meet in US despite Chinese warnings


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House Speaker Kevin McCarthy met Taiwan's President Tsai Ing-wen in California on Wednesday, becoming the most senior US official to meet a Taiwanese leader on American soil since 1979.

Mr McCarthy, a Republican who through his position in the House of Representatives is number three in the US leadership hierarchy, hosted Ms Tsai at the Ronald Reagan Presidential Library in Simi Valley, California, near Los Angeles.

At a meeting including other Republican and Democratic politicians, he called Ms Tsai “a great friend to America”.

“Their presence and unwavering support reassure the people of Taiwan that we are not isolated and we are not alone,” Ms Tsai told reporters after the meeting concluded.

Mr McCarthy added: “We will continue to find ways for the people of America and Taiwan to work together to promote economic freedom, democracy, peace and stability in Asia.”

Under a 1978 agreement that normalised relations, the US agreed to recognise Beijing as the sole seat of China’s government, while acknowledging but not endorsing the Chinese position that Taiwan is part of it.

The US has insisted that any reunification of the island with the mainland must be peaceful.

China staged war games around Taiwan last August following the visit to Taipei of then-House speaker Nancy Pelosi. Taiwan's defence ministry said a Chinese aircraft carrier group had entered the waters off the island's south-east coast before the meeting.

Beijing had repeatedly warned against a meeting between Mr McCarthy and Ms Tsai, although some analysts expect its reaction to be more moderate than that to Ms Pelosi's Taipei visit.

US Secretary of State Anthony Blinken said there was nothing new about a Taiwanese president transiting through the US and Beijing should not use it as an excuse to take action or ratchet up tension.

“There’s no reason for the Chinese to overreact in any way,” National Security Council spokesman John Kirby told reporters on Wednesday. “We’ll watch this as closely as we can.”

However, the US, which is bound by law to provide Taiwan with the means to defend itself, has stepped up interactions with Taipei in recent years as Beijing's pressure on the island has increased.

Agencies contributed to this report

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: April 06, 2023, 12:47 PM