(Yicai) Dec. 5 -- China has the “ammunition” to counter potential new import tariffs by the United States, according to a managing partner at Swiss bank and financial service provider Pictet Group.

“Donald Trump is a wild card to China’s growth, but China and policymakers have the ammunition to counteract US policies going forward,” Laurent Ramsey told Yicai in a recent interview.

China already introduced massive monetary and fiscal stimulus in September and October, but there is still some room for more if Trump imposes 60 percent tariffs on Chinese imports, Ramsey noted.

The Chinese equity market cap as a percentage of the money supply is at a 20-year low, showing the “dry powder” that still exists and the large room that policymakers still have to mitigate the impact of potential tariff hikes, he explained.

When asked about his expectations for the upcoming Trump administration, Ramsey said that this second term will be different than the first one because Trump has the House now and he surrounded himself with loyalists, so he has free hands with “very little counterbalance in terms of being able to do whatever he wants.” Moreover, this will be his last term, Ramsey pointed out.

Despite these uncertainties, Pictet is building an overweight position on Chinese equities because it believes policies are going in the right direction, Ramsey said.

He also recommended investors consider multiple hedging strategies, including taking advantage of the negative correlation between bonds and equities, holding gold despite the high prices, and exploring emerging markets in countries that are more protected from the potential US tariffs, such as Argentina, Turkey, and India.

Pictet advises investors to be nimble with multi-asset strategies that can move relatively fast between asset classes and keep long-term investment objectives, Ramsey noted. “When there’s a storm, look at the horizon,” he said, warning about short-termism in volatile markets.

Editor: Futura Costaglione