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The policies of a Trump administration are both the biggest downside and upside risks to the global economy, an international survey of companies by Oxford Economics has found. While 38 per cent of respondent companies were hopeful for US growth to surge thanks to President-elect Donald Trump's fiscal stimulus program, 27 per cent feared Mr Trump would instigate a trade war between the US and China. "The fact that he does come up as the biggest upside and the biggest downside risk is the real sign that there's a lot of uncertainty around what he's going to do," said Sarah Hunter, head of Asia-Pacific macro consulting at Oxford Economics. "The rhetoric through the election was obviously very anti-migration, anti-globalisation," said Ms Hunter. "But he gets elected and the first thing he announces is that he's going to implement a big fiscal stimulus around infrastructure investment, which came out of the blue." The main factors continue to be whether Mr Trump would be able to pass his fiscal stimulus program through Congress, and whether he would quietly drop his protectionist policies. End to share rally? The survey comes as one of the world's most prominent bond investors, Bill Gross, warned that Mr Trump's anti-globalisation policies would restrict trade and reduce corporate profits over the long term, putting an end to the post-election stockmarket rally. "There's no doubt that many aspects of Trump's agenda are good for stocks and bad for bonds near term – tax cuts, deregulation, fiscal stimulus, etc," Mr Gross said in his widely followed monthly investment outlook. "But longer term, investors must consider the negatives of Trump's anti-globalisation ideas which may restrict trade and negatively affect corporate profits. In addition, the strong [US] dollar weighs heavily on globalised corporations, especially tech stocks," he said. The Janus Capital portfolio manager advised investors to shift money into cash and cash alternatives, while risk assets such as shares should be held underweight. Other risks for 2017 Rounding out the top three downside risks for companies in the Oxford Economics survey are a more severe economic downturn in China and geopolitical tensions in places such as Russia, Iran and the South China Sea. However, among Australian companies, a Trump presidency is also considered an international risk, and local companies are more concerned about that than developments in China, said Ms Hunter. "In terms of discussion, it's definitely the one I've heard most about in the last couple of weeks." Meanwhile, the loosening of global fiscal policy and productivity rebounds were considered the second and third-highest upside risks, respectively. The perception of the rise of populism in the EU and post-Brexit uncertainty have diminished as downside risks since last quarter, the survey found. These topics were even less relevant locally, said Ms Hunter, adding that current restrictions on foreign investment at the federal and state levels, as well as the popularity of One Nation were not parallels to the EU, citing Brexit, the Italian referendum and the Austrian presidential election as examples. "It doesn't feel like it's in the same league as that," she said. "Talking to people it doesn't seem like there's a concern about it, or indeed views that that's the way policy should go in Australia." The survey included responses from 210 companies primarily from the financial, real estate and industrial manufacturing sectors.

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