Foxconn’s China woes expose supply chain dilemma 24 Oct 2023 A tax probe is hitting the Apple supplier ahead of a key Taiwanese election in which founder Terry Gou is running for president. It may complicate the manufacturer’s plan to move production outside China. Other multinationals will learn from Foxconn the true cost of reshoring.
US tech controls help and hinder China chipmakers 20 Oct 2023 Washington’s latest restrictions aim to curb Chinese access to semiconductors for AI and warfare. Beijing is years away from replicating sophisticated components and tools like those made by ASML. But the rules create opportunities for local champions such as $30 bln SMIC.
Israel’s fossil fuel boon becomes less clear-cut 19 Oct 2023 The country’s rapidly rising gas exports were billed as a way to replace 10% of the Russian supplies lost by Europe. UAE oil giant ADNOC has also bid to buy local fossil fuel assets amid improving relations with the Gulf state. Israel’s war with Hamas complicates both objectives.
EU-US steel unity may come at a high cost 19 Oct 2023 Europe could soon join the United States in whacking tariffs on other alloy producers. EU leaders and Joe Biden may want to shield firms like ArcelorMittal from Chinese imports. But helping the 130 bln euro industry could weaken global trade rules, and the bloc’s climate policy.
India and Japan will be Asia’s next power couple 19 Oct 2023 Modi and Kishida's governments partner on security and are setting up a $600 mln fund to co-invest in green infrastructure. It's a fresh sign that financial ties, including potentially on cross-border commodities M&A, may flourish to match the strengthening geopolitical bond.
UK infrastructure fix is cheaper than it looks 18 Oct 2023 Britain should spend up to 80 bln pounds a year revamping its economy, government advisers say. The private sector has to do most of the heavy lifting, but the state can assist. Offering tax relief to businesses that invest will help – and cost less than Downing Street fears.
Saudi is wild card in Middle East’s new turmoil 18 Oct 2023 War in Israel complicates Crown Prince Mohammed bin Salman’s modernisation push. He must consider the oil market, rivalry with Iran, overseas investment, and the views of 32 mln citizens. How the Gulf’s biggest economy proceeds has big implications for the region – and the world.
China’s GDP allows room for stimulus waiting game 18 Oct 2023 The world’s second-largest economy grew a better-than-expected 4.9% in the third quarter, putting the full-year target within reach. It’s another reason for Beijing to refrain from a splashy intervention, but the recovery is fragile. War in the Middle East could yet play spoiler.
The financial ramifications of US-China tensions 17 Oct 2023 The rivalry between the world’s two largest powers is having an impact on almost every aspect of global business and finance. In this episode of The Exchange podcast, Jared Cohen from Goldman Sachs discusses how investors should approach geopolitics, and the limits of decoupling.
Globalisation woes create new winners and losers 17 Oct 2023 After peaking at 61% of world GDP in 2008, trade is falling due to tariffs, industrial policies and geopolitical strife. That means higher wages and production costs for companies, and more inflation for consumers. Yet some countries, commodities and workers stand to gain.
Poland’s warmer EU ties may come with frozen funds 16 Oct 2023 Centre-left leader Donald Tusk is likely to be the new PM after Sunday’s election. Ending the nationalists’ rule will bring closer relations with Brussels. But to release 35 bln euros in EU aid, the new government will still have to get past right-wing President Andrzej Duda.
US grand strategy can prop up the global order 16 Oct 2023 The horror in Israel and Gaza is a new blow to a fragile world. But the United States can prevent the rules-based order from collapsing by continuing to steer a steady course with regards to Russia and China. The biggest risk would be the return of Donald Trump as president.
Elections will test Indonesia’s economic progress 16 Oct 2023 President Joko Widodo’s second and final term ends next year. His administration has brought stability and fostered investment in everything from EV metals to infrastructure. A domestic and global slowdown and a potential China backlash could taint matters for his successor.
Europe’s rising bond vigilantes are necessary evil 11 Oct 2023 Debt costs for weaker states like Italy are jumping. Europe’s delay in agreeing new fiscal rules means hostile markets are the only credible check on government spending. Slowing growth and a hamstrung ECB means the backdrop may well get choppier.
IMF’s bond vigilante script is ripe for a rewrite 10 Oct 2023 The International Monetary Fund wants politicians to close the fiscal taps. Yet it’s also warning about a sharp slowdown in global growth. Markets are worried about debt levels but without spending and investment the world will stagnate.
Next EU chief will need cash more than trade wars 10 Oct 2023 Ursula von der Leyen kicked off her campaign to stay European Commission president by attacking China’s car subsidies. But what the bloc craves is a plan to grow its economy and enlarge eastwards, including finding $411 bln for Ukraine. A bigger, better Europe won’t come cheap.
Israel highlights fragility of new trade corridors 10 Oct 2023 The bloody conflict undermines Washington’s vision to use the country’s Haifa port to link India via Saudi Arabia to Europe. It also makes China’s pivot to the Middle East look less of a bright idea. The spoils are huge but reconfiguring trade and financial flows is hard work.
The EU is stuck with its one-trick refugee policy 9 Oct 2023 Africans and Asians fleeing persecution could boost the European Union’s ageing workforce. But its leaders are so scared of nationalism at home they prefer to pay North African regimes to stop asylum-seekers crossing the Mediterranean. It’s a short-term fix, says Hugo Dixon.
Polish cereal showdown goes against the EU grain 4 Oct 2023 A spat over Ukraine’s grain exports is the latest blemish on the European Union’s fraught relationship with Poland, the bloc’s sixth largest economy and biggest net recipient of EU funds. If upcoming elections push Warsaw further from Brussels, both sides have much to lose.
Wanted: House Speaker willing to do impossible job 4 Oct 2023 US leader Kevin McCarthy was kicked out of his job for brokering a deal to keep the government open with a stopgap bill. The task of agreeing to a budget – which includes a dispute over $120 bln in 12 different measures – remains. Only now it has hurdles that favor Democrats.