Diplomacy

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.

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.

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.

Israel war casts US as flawed-but-familiar haven

9 Oct 2023

Dysfunction in D.C. continues to freeze legislation, including new aid for Israel. Despite that, past conflicts – 9/11, Ukraine’s war with Russia – suggest the dollar will remain the safe haven. Investors’ reckoning with budgets, infighting, and an election will have to wait.

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.

Western rival to Belt and Road has much to prove

25 Sep 2023

The G7’s $600 bln plan to compete with China’s flagging investment push has launched splashy railway and energy schemes in Africa and Asia. But governments and private investors haven’t put up much cash. It’s also unclear how poor countries will avoid debt traps, says Hugo Dixon.

M&A spillover in India-Canada fight hurts everyone

22 Sep 2023

As bilateral relations sour over a murder, tycoon Sajjan Jindal is going slow on his planned $8 bln consortium bid led by JSW Steel for Vancouver-based Teck’s coal assets. The stalling hurts the buyer and the seller, and India’s diversification ambitions a bit more.

India entry into geopolitical storm will be costly

19 Sep 2023

New Delhi dismissed as ‘absurd’ Canada’s allegation of its involvement in a Sikh leader’s murder. Either way, the fallout will ripple through cabinets and boardrooms in the West. For global companies and money managers, it’s a reminder that de-risking from China is complicated.

Less ethical US foreign policy requires new logic

18 Sep 2023

When Joe Biden took office he promised to put human rights at the heart of international affairs. The president is now cosying up to regimes like Vietnam to contain China and build new supply chains. That makes sense, but Biden should explain his approach better, says Hugo Dixon.

Tariffs unfit to solve EU’s Chinese EV puzzle

13 Sep 2023

Ursula von der Leyen’s new anti-dumping investigation could result in punitive duties on China-made electric vehicles. But penalties are a bad fix for the EU’s green push. The bloc still needs the People’s Republic to help it phase out car pollution – and to buy Europe’s exports.

The G7 is least bad group for a troubled world

4 Sep 2023

The G20 and United Nations, which hold summits this month, are broken. The expanded BRICS is a motley crew. The Group of Seven rich nations has shortcomings and could struggle if the US turns inwards. But it has the potential to keep peace and protect the planet, says Hugo Dixon.

India is warming up to a cooling China

28 Aug 2023

Narendra Modi’s meeting with Xi Jinping in South Africa signals some thawing of financial ties hamstrung since 2020 by border tensions. Investments from the People’s Republic into its neighbour shrivelled thanks to a screening policy. That now looks ripe for fine-tuning.

Capital Calls: Better.com SPAC

25 Aug 2023

Concise views on global finance: From presidential hopefuls to a new blank-check acquisition, this week was a reminder that the speculative SPAC movement will be hard to kill.

Italy faces bumpy round trip on the Silk Road

23 Aug 2023

Prime Minister Giorgia Meloni may quit Chinese President Xi Jinping’s infrastructure club. Like other European fans, Italy gained little economic benefit from signing up to the Belt and Road Initiative. Yet leaving may provoke retaliation, perhaps against its luxury industry.

America’s new China curbs eschew scale for smarts

10 Aug 2023

The Biden administration’s plan for screening US investments in the People’s Republic is not the wide-ranging proscription many expected. It targets only a handful of deals, would ban even fewer and isn’t retroactive. That’s a relief for most investors – and for diplomacy, too.

The BRICS are better off disbanding than expanding

31 Jul 2023

Developing countries are understandably unhappy that rich nations don’t address their needs. But they won’t get much from a club including giant China and near-pariah Russia. Brazil, India and other emerging economies might achieve more by creating a new group, says Hugo Dixon.

Egypt’s food tightrope has petrodollar safety net

24 Jul 2023

The collapse of the Russia-Ukraine grain deal is a big problem for the world’s top importer of wheat. Egypt’s battered economy will struggle as food prices spike. A $400 mln lifeline from the UAE, flush with oil cash, is one of leader Abdel Fattah al-Sisi’s few crumbs of comfort.

Old Cold War tool could help in new era of tension

17 Jul 2023

The US and allies created a committee to vet exports to the Soviet Union during their long conflict. This gave its partners a say in setting policy and ensured they stayed aligned. The G7 should set up something similar to handle the quasi-Cold War with China, says Hugo Dixon.

Germany’s China policy caps pain for its companies

14 Jul 2023

Europe’s biggest economy has a new strategy to limit exposure to China and align more with Brussels and Washington. Yet a previous version of the plan was tougher. Big China-focused corporates like BASF and Volkswagen will be relieved they can de-risk at their own pace.

How to crack the climate free rider problem

10 Jul 2023

One reason countries fiddle while the world burns is that they bear the costs of action while everyone benefits. Creating a “climate club” would incentivise nations to pull their weight. But a lot of geopolitical stars first need to align, says Hugo Dixon.