I usually avoid sports metaphors, but here’s a helpful way to think of the Sino-American trade war.

On one side of the playing field are the World Cup champions. Lined up on the other side are the Super Bowl champions. They’re both top-notch teams arrayed on a single field to play “football.” But the rules and skill sets are worlds apart.

The U.S. and Chinese economies are like these two teams, trying to play on the same field.

The competition between the world’s two largest economies is making headlines again. When it comes to the gamesmanship of global trade, I turn to one analyst in particular for insights: Scott Chan, the “Sino-specialist” on our Investing Daily team.

China-born Scott Chan (pictured here) is the lead analyst for Real World Investing and The Complete Investor. Educated in the United States, Scott is a multicultural person who reads and speaks fluent Mandarin and Cantonese Chinese.

I interviewed Scott this week to discuss China and a range of related topics.

The Sino-American trade war is flaring up again. How substantive are these tensions and how much is just bluster?

It seems every few weeks the Trump administration fires a new salvo. Recently came new rules requiring foreign companies that use U.S. equipment to get licenses before they can sell to entities on a blacklist, notably Huawei. Then the White House announced that Chinese stocks will get delisted from the U.S. if the companies don’t comply with certain auditing requirements. Then TikTok and WeChat came into the crosshairs.

The threat against WeChat worries me the most. The language of the executive order is vague as to what exactly gets banned. WeChat is an app used by over a billion people to communicate. If the ban is limited to American citizens and organizations, it won’t be such a big deal to the stock market. After all, many U.S. apps are blocked in China as well. But certain American companies would be hurt.

For example, if Apple (NSDQ: AAPL) can’t offer the WeChat app on its iPhone, Chinese consumers will have to choose between the iPhone and WeChat. They will choose WeChat.

If the ban also pertains to Tencent (OTC: TCEHY), which owns WeChat, there will be problems because it’s involved in a lot of partnerships with U.S. companies. It would mean all companies that work with Tencent would be in violation of the executive order. Chaos would ensue.

Unfortunately, the Trump administration is often unclear what exactly is getting affected, how the proceedings will work, and what Chinese asset might be next.

Asia has gotten a handle on the pandemic whereas it continues to rage in the U.S. What explains the difference in this regard between East and West and what are the investment implications?

Compared to Europe and the U.S., Asian countries were more prepared and acted proactively to contain the outbreak. U.S. health care systems, in particular, have been woefully insufficient to meet the crisis.

As an anecdote, my wife works in a hospital in New York City, which was battered in the early days of the spread. She and her coworkers had to get their own personal protection equipment because the hospital didn’t have adequate supply and it was overwhelmed with COVID-19 patients.

Cultural differences also played a role in the different trajectory of the spread. Eastern cultures emphasize collectivism and obedience to authorities, so Asian populations readily followed health guidelines.

Moreover, in East Asia, it’s common for people to wear masks outside to prevent the spread of respiratory diseases. Here in America, it’s only because of COVID-19 that it’s become normal to wear a mask. Research also shows that a mutated, more contagious strain is afflicting Europe and the U.S.

That the East and West are in different stages of dealing with COVID-19 means that the East will lead the world in economic recovery. Despite the risks of investing in Chinese stocks because of the tensions between the U.S. and China, it’s a good idea for growth investors to have shares in a few select Chinese companies. Risk-averse conservative investors will probably want to stay in the U.S.

Economic indicators in the U.S. have recently taken a downturn, as states reimpose lockdowns due to the resurgence of COVID-19. How do you see the economy and markets performing in the latter half of 2020?

Even with an eventual vaccine, COVID-19 will still be around and the ways we live our lives could be permanently changed, especially when it comes to social distancing. How would that affect the overall economy? Only time will tell.

Watch This Video: Will The “Dog Days” Bite Investors?

That said, we know from history that the stock market doesn’t necessarily need a vibrant economy to go up. With unprecedented fiscal and monetary stimulus providing support, asset prices can keep getting inflated.

But a market correction will happen sooner or later. Ironically, a sizeable correction could occur when the economy starts to show that it’s on solid footing, because it would suggest that the Fed’s ultra-dovish policy could begin to wind down.

These uncertain conditions seem auspicious for gold prices. What’s your prognosis for the yellow metal?

As my colleague Dr. Stephen Leeb has repeatedly argued in the pages of The Complete Investor and Real World Investing, gold tends to underperform in “Goldilocks” periods, when economic growth is solid and inflation is tame. But during inflationary or deflationary threats, gold shines as it has this year.

Central banks around the world are flooring the accelerator to keep liquidity flowing and avoid a prolonged recession. Even as recovery takes hold, I believe policymakers will err on the side of inflation and wait as long as they can to raise interest rates for fear of pulling the plug too early. Thus, deflationary pressures could quickly turn into high inflation. Either way, gold looks poised to keep rising.

Small- and mid-cap stocks have been playing catch up in recent months with mega-caps, consequently adding breadth to the rally. What are the investment opportunities within this trend?

Once enough money pours into household names, the smaller names start to get attention too as buyers try to find stocks that haven’t already been inflated. Historically, small caps tend to outperform coming out of a recession, so if you buy the small stuff history is on your side.

Read This Story: Small-Cap Stocks: The Little Engines That Can

Additionally, because small caps tend to serve the domestic market, if U.S.-China tensions worsen, the small fry will probably hold up better.

I like companies that are involved in the cloud and can provide solutions that facilitate accomplishing tasks remotely and virtually. I also like small players in the biotech space. They are hit or miss, but if they hit, the upside is usually great.

Editor’s Note: My colleague Scott Chan just provided you with invaluable investing advice. But I’ve only scratched the surface of our team’s expertise.

Consider Nathan Slaughter. As chief investment strategist of Takeover Trader, Nathan is an expert on mergers and acquisitions and corporate takeover initiatives. He expects this activity to pick up in the coming months.

Nathan is adept at digging up the inside data on pending takeovers. Along those lines, he just revealed a startling development. If you watch his presentation and follow his advice, you could reap huge market-beating gains.

For quick access to Nathan’s “Project Rainmaker” expose, click here now.