Welcome to Chimerica, Mr Co-President
It stands to reason that stock prices in Hong Kong and Shanghai should have reacted yesterday to Barack Obama's election victory.
What is harder to understand is that they responded by rising. It would have made more sense if they had fallen.
To understand why, it may help to think of Mr Obama not as president-elect of the United States, but as co-president of an altogether different place: what economic historian Niall Ferguson has called 'Chimerica'.
Chimerica, Professor Ferguson explains, is a single economy comprising both the US and China. And it is by far the world's biggest. Although Chimerica makes up only 13 per cent of the earth's land surface, it accounts for a quarter of its population and a third its gross domestic product.
The relationship between the two halves of Chimerica is a symbiotic one based on trade and investment. The wealthy American half spends its money on goods manufactured in China, boosting growth there. The inhabitants of the poorer Chinese half, meanwhile, diligently save their export earnings, which allows them to finance rich Chimerica's spending.
The result is an engine so powerful, it has generated more than half of the world's economic growth over the last five years.
The trouble is that Mr Obama is threatening to throw sand into the wheels of that engine.
He has evidently been seduced by the arguments of US lobby groups like the Economic Policy Institute, which claimed last year that the US has lost 1.8 million manufacturing jobs since 2001 because of China's unfair trade practices.
In his campaign speeches Mr Obama talked about laid-off US factory workers forced to watch helplessly as their old assembly lines are 'unbolted and shipped off to China'.
And he promised to do something about it, declaring 'the US and China face challenges that require fresh thinking and a change from the US policy approach of the past eight years'.
'I know that America and the world can benefit from trade with China but only if China agrees to play by the rules,' Mr Obama argued in his campaign statements. 'As president I will take a vigorous, pragmatic approach to addressing these issues, utilising our domestic trade remedy laws as well as the WTO dispute settlement mechanism wherever appropriate.'
Mr Obama has also proposed rewriting trade agreements to include binding labour and environmental standards, a policy which to many free trade enthusiasts sounds a lot like backdoor protectionism.
And he has endorsed the China Currency Manipulation Act of 2008, a bill which accuses Beijing of undercutting American manufacturers by deliberately holding the value of the yuan at an artificially low level.
In April he threatened retaliation, warning, 'Look, here's the bottom line: you guys keep on manipulating your currency, we are going to start shutting off access to some of our markets.'
Until now, many observers on this side of the Pacific have dismissed Mr Obama's fighting words as hollow electioneering, empty talk that he will abandon the moment he assumes office.
Such optimism may prove misguided. With the American economy in recession and with the US Congress dominated by a Democratic Party that tends to be sceptical about the benefits of free trade, there is a real possibility of an upsurge in protectionist sentiment directed mainly at China.
That would be a disaster for Chimerica. Restricting China's access to US markets or imposing tariffs to penalise China for the perceived undervaluation of the yuan would not only hurt China's faltering export sector.
It would also raise the price of the goods America imports from China, pushing up US inflation. And it could risk a backlash against the operations of US companies in China, while jeopardising the US administration's ability to fund its growing budget deficit by selling Treasury bonds to Beijing.
The net result would be to make Chimerica's economic downturn considerably worse, which makes it all the more surprising that stock prices in Hong Kong and Shanghai bounced yesterday in response to Mr Obama's election victory.