風蕭蕭_Frank
以文會友
全球經濟進入動蕩時代
https://www.bloomberg.com/graphics/2023-geopolitical-investments-economic-shift/
中美緊張局勢和烏克蘭戰爭已經將投資轉向誌同道合的國家——這表明企業正在進行地緣政治賭注。
作者：肖恩·唐南和恩達·柯蘭
Maeva Cousin 的數據和分析
製圖：Jennah Haque，2023 年 9 月 18 日
在一些全球最大的公司的財報電話會議和公司文件中，這個詞越來越多地出現。 從貝萊德等華爾街巨頭，到可口可樂、特斯拉等消費巨頭，以及 3M 公司等工業支柱，標普 500 強企業的首席執行官及其副手在 2023 年使用“地緣政治”一詞近 12,000 次，或者 幾乎是兩年前的三倍。
這不僅僅是說說而已。 現在出現的確鑿證據表明，所有關於緊張國際關係的討論以及十多年來對全球化時代結束的警告最終促使企業選擇其資本的立場。 多年來，西方跨國公司一直回避地緣政治，轉而在不太成熟的市場中追求利潤，它們越來越多地在誌同道合的國家建設未來工廠。
當世界領導人本周齊聚紐約參加年度聯合國大會時，彭博經濟研究對聯合國外國直接投資數據的分析表明，世界正在重組為相互競爭的集團（盡管仍然相互聯係），這反映了聯合國對俄羅斯入侵美國的投票結果。 烏克蘭。 分析發現，在 2022 年投資的 1.2 萬億美元綠地外國直接投資中，有近 1,800 億美元跨地緣政治集團從拒絕譴責俄羅斯入侵的國家轉移到那些譴責俄羅斯入侵的國家。
“這是一個曆史性的變化，”韓國前貿易部長楊漢九 (Yeo Han-koo) 表示，他認為世界正在進入一個動蕩的時代。 “新的經濟秩序正在形成，這將帶來不確定性和不可預測性。”
聯合國大會投票譴責俄羅斯入侵的國家占全球GDP的三分之二以上。 攝影師：Angela Weiss/法新社/蓋蒂圖片社
這種轉變的促進因素是顯而易見的。 飽受疫情影響的政府正在敦促企業牢記國家利益，並提供補貼和其他激勵措施，作為將生產帶回國內的誘餌。 俄羅斯入侵烏克蘭以及美中競爭加劇，加速了貿易和全球化蓬勃發展的冷戰後脆弱模式的終結。
令政策製定者擔憂的潛在成本和後果也是如此。 歐洲央行行長克裏斯蒂娜·拉加德今年早些時候以異常直接的語言宣稱，“我們正在目睹全球經濟分裂成相互競爭的集團，每個集團都試圖讓世界其他國家更接近各自的戰略利益” 和共同的價值觀。”
世界對俄羅斯烏克蘭戰爭仍存在分歧。2023年聯合國投票要求俄羅斯從烏克蘭撤軍
注：地圖顯示了出席訴訟程序的不同聯合國成員的投票情況。來源：聯合國
這種焦慮是有充分理由的。 國際貨幣基金組織 (International Monetary Fund) 經濟學家今年早些時候計算出，在最極端的情況下，即全球經濟分裂為硬派，從長遠來看，將摧毀多達 7% 的產出，這一轉變類似於消滅法國和法國。 他們確定，德國經濟。
需要明確的是，這次突破既不平衡也不幹淨。 以美國和德國等歐盟大國為首，投票譴責俄羅斯入侵的國家占全球國內生產總值的三分之二以上。 中國位於另一個集團的核心，其超越美國經濟作為世界主導經濟體的競賽正受到經濟增長放緩的打擊，許多人認為這反映了長期問題。
快速了解：“朋友支持”對貿易的未來意味著什麽
即使世界上出現了新的經濟鐵幕，它也是一個漏洞百出的鐵幕。 如今，全球經濟比以往任何時候都更加一體化，而且它們之間的關係也很複雜。 烏克蘭戰爭和由此產生的製裁擾亂了特定商品的貿易，而美中貿易戰等其他事件也造成了自身的破壞，但現實是全球商業一直具有彈性。
分裂的世界經濟的未來
資料來源：國際貨幣基金組織、世界銀行、彭博經濟研究
企業追逐利潤和利潤豐厚的市場的本能與消費者對便宜貨的渴望一樣強烈，使得這個新時代持久地具有交易性。 正如美國商務部長吉娜·雷蒙多（Gina Raimondo）上個月訪問中國時所表明的那樣，這兩個集團的成員仍然渴望相互出售產品，並將恢複波音公司飛機和其他美國出口產品的銷售列為她的首要議程。
中國電動汽車公司正在競相進入歐洲，盡管他們的這樣做引發了歐盟對中國補貼的調查。
美國商務部長吉娜·雷蒙多 (Gina Raimondo) 表示，正如美國商務部長吉娜·雷蒙多 (Gina Raimondo) 上個月訪問中國時所展示的那樣，中美兩國的成員仍然熱衷於向對方出售波音飛機和其他美國出口產品。 攝影師：沉其來/彭博社
印度等國家在聯合國投票中投了棄權票，選擇不譴責俄羅斯的入侵，但它們正在尋求與美國和其他西方大國建立新的戰略關係，這些國家認為這些聯係至關重要。 中國和西方投資者都在湧入越南和墨西哥等日益重要的互聯經濟體大家庭，這些經濟體正試圖跨越聯合國投票雙方的陣營。
但迄今為止，大轉變的主要軼事證據正在強化，沒有任何數據點比綠地外國直接投資（對新工廠的長期投資往往需要數年時間才能實現和指出）更能說明世界正在發生的變化。 公司對未來做出的大賭注。
彭博經濟研究利用譴責俄羅斯入侵烏克蘭的聯合國投票作為過濾器，發現過去兩年流向不譴責俄羅斯入侵烏克蘭的國家的綠地外國直接投資的全球份額平均僅為 15%，低於 2019 年的 30%。 截至 2019 年的十年。中國（包括香港）的份額從 2010-19 年的平均近 11% 降至 2022 年的不足 2%。 對俄羅斯的投資完全枯竭。
數據表明，美國和其他西方公司在誌同道合的國家進行了更多投資。 美國是 2021-22 年的最大贏家，與疫情爆發前的十年相比，其在全球綠地外國直接投資中所占份額增幅最大。 彭博經濟分析發現，德國、意大利甚至英國等其他七國集團國家在外國投資中的份額也在增加。
沒有譴責俄羅斯的國家減少了外國直接投資的流入
按目的地劃分的綠地外國直接投資價值，以 2010-2019 年平均水平為指數
資料來源：聯合國貿易和發展會議、彭博經濟研究
除其他因素外，這可能反映出美國產業政策的轉變，鼓勵對半導體和電動汽車等戰略行業進行更多投資，以及日本、韓國和台灣等歐洲和亞洲盟友的反應。
但這也標誌著另一種非凡的轉變。
盡管世界貿易組織本月表示，現在宣布全球化時代結束還為時過早，但它警告說，地緣政治緊張局勢正開始影響貿易流動，而且碎片化的早期跡象正在出現。 世貿組織估計，自烏克蘭入侵以來，兩個假設的地緣政治集團之間的貨物貿易增長速度比這些集團內部的貿易增速慢 4% 至 6%（根據聯合國的投票模式）。
國際貨幣基金組織經濟學家今年早些時候宣稱，投資和商品流動不再遵循通常的路徑。 曾經利潤豐厚的新市場的承諾占據主導地位，國際貨幣基金組織對二十年數據的研究發現，近年來，地緣政治在推動資本流動方麵發揮了加速作用。
國際貨幣基金組織研究部副主任安德裏亞·普雷斯比特羅表示：“即使你控製了國家風險和地理距離等通常是雙邊貿易和資金流動的關鍵驅動因素的因素，你仍然會發現地緣政治問題。” “近年來，地緣政治因素似乎更為重要。”
鑒於其作為世界最大貿易國的地位，大部分轉變都圍繞著中國。 國際貨幣基金組織向彭博社分享的最新分析顯示，與疫情爆發前的五年相比，2020年第二季度至今年第一季度，美國公司在中國的綠地投資下降了57.9%，歐洲公司的綠地投資下降了36.7% 。 亞洲其他地區對中國的投資下降了三分之二以上。
世界在中國以外尋找未來工廠。 疫情爆發以來對華外商直接投資與五年前相比
*新興歐洲包括阿爾巴尼亞、白俄羅斯、波斯尼亞和黑塞哥維那、保加利亞、匈牙利、科索沃、摩爾多瓦、黑山、北馬其頓、波蘭、羅馬尼亞、俄羅斯、塞爾維亞、土耳其和烏克蘭。資料來源：國際貨幣基金組織
這一變化的背後是投資決策中日益重要的因素，即國際貨幣基金組織經濟學家和其他人所說的“地緣政治距離”。 國際貨幣基金組織的經濟學家利用基於七十年聯合國投票的指數發現，最近的外國直接投資流量更有可能流向地緣政治一致的國家，而不是地理位置接近的國家。
國際貨幣基金組織的行動反映了經濟學家正在發生的更廣泛的演變。
幾代人以來，經濟學家一直通過依賴企業追求回報最大化的模型來觀察全球經濟，並根據地理影響或大國引力進行調整。 現在，他們正試圖應對在數據驅動的經濟世界中地緣政治中看似無形的力量以及政府定義國家安全的不斷擴大的方式。
在外國直接投資中，地緣政治因素勝過地理因素。 地理位置或地緣政治鄰近國家之間的全球外國直接投資年度份額
對於國際貨幣基金組織前首席經濟學家、現任彼得森國際經濟研究所高級研究員莫裏斯·奧布斯特菲爾德來說，這真正意味著經濟學家正在消化幾個世紀以來權力競爭驅動貿易的曆史常態的回歸。 “曆史的弧線不一定會向自由市場傾斜，”奧布斯特菲爾德說。
前世界銀行首席經濟學家、貿易和全球化領域的頂尖專家彭妮·戈德堡 (Penny Goldberg) 將地緣政治稱為“人為的不確定性”。
引導美國和其他西方經濟體政府進行變革的很大程度上是一種感覺，即他們的領導人長期以來錯誤地相信市場有能力做出正確的決定。 戈德伯格擔心的是，世界可能在另一個方向上走得太遠了。
她說，以國家安全而不是經濟為指導力量進行投資往往需要更多地基於信任而不是數據。 戈德伯格說，曆史上許多政府都有以安全名義做出錯誤判斷的記錄，比如 2003 年的伊拉克戰爭。 如果地緣政治正在推動投資，“你就必須相信政府的話。 有時，即使是善意的人也可能會犯錯。”
戈德堡等人認為，日益擴大的分裂會給全球經濟帶來更廣泛的負麵影響。 其中包括隨著製造成本上升而導致的通貨膨脹加劇、由於國際研究合作變得越來越稀少而導致創新減少、隨著對貧窮國家的投資停滯而加劇貧困和全球不平等。 誌同道合的富國相互投資意味著對可能更需要投資的窮國的投資減少。
雖然迄今為止的地緣政治競爭往往集中在半導體或量子計算等戰略技術領域，以及太陽能電池板、電池工廠和電動汽車工廠等新能源項目，但發展中的分歧也更廣泛。
半導體迄今為止，地緣政治競爭往往集中在半導體等戰略技術領域。 攝影師：Edwin Koo/彭博社
世界大宗商品貿易正在破裂。 這一切都始於能源、石油和天然氣，但美國及其亞洲和歐洲盟友正在爭先恐後地為礦物和其他原材料（如銅、鎳和鋰）建立新的友好供應鏈，這些原材料對生產半導體、手機和電動汽車至關重要。
全球半導體和可再生能源投資猛增。 已宣布的綠地外國直接投資項目的價值
資料來源：聯合國貿易和發展會議
在一些地方，這種分歧是由擺脫美元的願望推動的。 金磚國家正在探索一種新的共同貨幣，可能會保護成員國免受像對俄羅斯那樣的製裁的影響。 孟加拉國已同意向俄羅斯支付約3億人民幣建設核電站的費用。 巴基斯坦熱衷於達成以人民幣購買俄羅斯原油的長期協議。
政府也比以前更願意公開展示自己的力量。
在今年早些時候發布的一項新戰略中，德國政府宣稱其最大的“企業必須在決策時充分考慮地緣政治風險”。 它還警告企業，如果有一天它們麵臨與地緣政治危機相關的成本，則不應指望政府來救助它們。
中國總理李強發出的另一條信息同樣直言不諱：他利用德國之行敦促首席執行官們自己做出投資決定，而不是屈從於政府。
人們很容易認為，這次下滑都是從唐納德·特朗普 (Donald Trump) 2016 年當選開始的。但甚至在他或其他民粹主義者崛起之前，新經濟集團的推動就已經開始了。 奧巴馬政府與歐盟和亞太國家發起了地緣政治驅動的貿易談判，但最終被特朗普扼殺。 中國自己推行的耗資9000億美元的“一帶一路”倡議從一開始就帶有赤裸裸的地緣政治色彩，該倡議橫跨亞洲並深入非洲。
可能出現的情況也比通常采用的冷戰類比所暗示的更為複雜。
中國在許多供應鏈中仍然占據主導地位，甚至正在建設的新工廠也可能在未來幾年至少使用一些中國投入。 榮鼎集團的分析發現，隨著企業積極將投資和采購從中國轉移出去，即使大幅轉移到其他地點也可能隻會導致中國的地位小幅下降，因為中國在全球製造業中占據主導地位。
奧布斯特菲爾德指出，同樣，許多與中國有關係的新興經濟體仍然渴望西方投資。 許多人不想被迫在競爭對手的聯盟之間做出選擇。
金磚國家可能會通過增加沙特阿拉伯等新成員來擴大規模，但這個集團仍然因自身的地緣政治競爭而四分五裂，中國國家主席習近平決定缺席本月在印度舉行的二十國集團會議就證明了這一點。
北京自己的聯盟建設也出現了其他問題。 意大利已發出退出“一帶一路”倡議的計劃。 就在南非金磚國家峰會取得勝利幾天後，印度和沙特阿拉伯與美國和歐盟一起公布了一項在南亞、中東和歐洲之間建立貿易和運輸聯係的計劃。
2001年，高盛集團的經濟學家吉姆·奧尼爾首次創造了“金磚四國”一詞來強調新興經濟體的新俱樂部，他稱這種劃分是不切實際的，是“政治人物和一些理想主義者的炒作”。
“即使你看看那些在出口方麵最有經驗或最成功的國家，例如德國、韓國，他們也非常小心，避免過度受製於某個集團或另一個集團，”他說。
然而，我們很難忽視新出現的數據。 企業將賭注押在地緣政治上，並產生了後果。 野村證券(Nomura)經濟學家在本月的一份報告中表示，中國在亞洲出口中所占的份額正在以至少二十年來最快的速度下降，部分原因是貿易正在多元化。 墨西哥最近取代中國成為美國最大的貿易夥伴。
閱讀更多：美國最大的貿易夥伴不再是中國
貝萊德董事長拉裏·芬克（Larry Fink）在該公司 7 月份的財報電話會議上宣稱，“分散的地緣政治格局”是影響回報的新“結構性”力量，這種情況將持續下去。 即使是最反傳統的首席執行官也在為新世界做準備。 在 7 月份與特斯拉投資者舉行的電話會議中，埃隆·馬斯克提出了他應對地緣政治崛起的解決方案：“我們能做的最好的事情就是在世界許多地方擁有工廠，”馬斯克說。 “如果世界某個地方的事情變得困難，我們仍然可以讓其他地方的事情繼續下去。”
The Global Economy Enters an Era of Upheaval
https://www.bloomberg.com/graphics/2023-geopolitical-investments-economic-shift/
US-China tensions and the war in Ukraine are already swinging investments to like-minded countries — a sign that companies are making geopolitical bets.
by Shawn Donnan and Enda Curran
Data and Analysis by Maeva Cousin
Graphics by Jennah Haque，
One word has been popping up increasingly on earnings calls and in corporate filings of some of the world's biggest companies. From Wall Street giants like BlackRock Inc. to consumer titans like Coca-Cola Co. and Tesla Inc. and industrial mainstays like 3M Co., S&P 500 chief executives and their lieutenants have used the word “geopolitics” almost 12,000 times in 2023, or almost three times as much as they did just two years ago.
It’s not just talk. Hard evidence is now emerging that all the discussions of strained international relations and more than a decade of warnings over the end of an era of globalization are finally spurring corporations to pick sides with their capital. Western multinationals that for years have avoided geopolitics in favor of pursuing profits in less mature markets are increasingly building the factories of the future in like-minded nations.
As the world’s leaders gather in New York this week for the annual United Nations General Assembly, a Bloomberg Economics analysis of UN foreign-direct investment data points to a world reorganizing into rival — though still linked — blocs that reflect UN votes on Russia’s invasion of Ukraine. Of the $1.2 trillion in greenfield FDI invested in 2022, close to $180 billion shifted across geopolitical blocs from countries that declined to condemn Russia's invasion to those that did, the analysis found.
“This is a historic change,” said Yeo Han-koo, a former South Korean trade minister, who sees a world entering an era of upheaval. “A new economic order is being formulated and that will cause uncertainty and unpredictability.”
Countries that have voted to condemn Russia’s invasion account for more than two-thirds of global GDP. Photographer: Angela Weiss/AFP/Getty Images
The accelerants for the shift are obvious. Pandemic-scarred governments are pressing companies to keep national interests in mind and providing subsidies and other incentives as a carrot to bring production home. Russia’s invasion of Ukraine and a building US-China rivalry have hastened the end of a fragile post-Cold War model that saw trade and globalization boom.
So too are the potential costs and consequences that are worrying policymakers. In unusually direct language, European Central Bank President Christine Lagarde declared earlier this year that “we are witnessing a fragmentation of the global economy into competing blocs, with each bloc trying to pull as much of the rest of the world closer to its respective strategic interests and shared values.”
World Remains Split Over Russia’s War in Ukraine。 2023 United Nations vote calling for Russia to withdraw from Ukraine
Note: Map shows votes for distinct UN members that were present for the proceeding.Source: United Nations
There's a good reason for the angst. Economists at the International Monetary Fund earlier this year calculated that in the most extreme scenarios in which the global economy divides into hard blocs it would destroy as much as 7% of output in the long term, a shift akin to wiping out both the French and German economies, they determined.
To be clear, the break is neither balanced nor clean. Led by the US and European Union powers like Germany, countries that have voted to condemn Russia’s invasion account for more than two-thirds of global gross domestic product. China sits at the core of the other bloc and its race to overtake the US economy as the world’s dominant one is being hit by a slowdown in growth that many see reflecting longer-term problems.
Even if there is a new economic Iron Curtain descending on the world, it is a remarkably porous one. The globe’s economies are more integrated today than they have ever been and their relationships are complicated. The war in Ukraine and resulting sanctions have snarled trade in particular commodities and other events like the US-China trade wars have caused their own disruptions, but the reality is that global commerce has been resilient.
The Future of a Divided World Economy
Sources: IMF, World Bank, Bloomberg Economics
The instinct of corporations to chase profits and lucrative markets remains as strong as consumers’ desire for bargains, making this new era enduringly transactional. Members of either bloc remain eager to sell to each other, as US Commerce Secretary Gina Raimondo demonstrated last month when she traveled to China with a possible resumption of sales of Boeing Co. aircraft and other US exports high on her agenda. Chinese electric vehicle companies are racing into Europe, though their doing so has triggered an EU investigation into Chinese subsidies.
Members of both blocs remain eager to sell to each other, as US Commerce Secretary Gina Raimondo demonstrated last month when she traveled to China with sales of Boeing Co. aircraft and other US exports high on her agenda. Photographer: Qilai Shen/Bloomberg
Countries like India that have chosen not to condemn Russia’s invasion, by abstaining in UN votes, are seeking new strategic relationships with the US and other Western powers, which see those links as vital. Both Chinese and Western investors are pouring into an increasingly important family of connecting economies like Vietnam and Mexico, which are trying to straddle the blocs on either side of UN votes.
But what was until now largely anecdotal evidence of a grand shift is hardening and no data point illustrates the way the world is changing more than what is happening in greenfield FDI — the long-term investments in new factories that often take years to realize and point to the big bets being made by companies on the future.
Using UN votes to condemn Russia’s invasion of Ukraine as a filter, Bloomberg Economics found that the global share of greenfield foreign direct investment going to countries that didn't condemn the invasion averaged only 15% in the last two years, down from 30% in the decade to 2019. China's share, including Hong Kong, fell to less than 2% in 2022 from nearly 11% on average over 2010-19. Investment in Russia completely dried up.
The data point to US and other Western companies investing more in like-minded countries. The US was the biggest winner in 2021-22, seeing the largest increase in its share of global greenfield FDI versus the decade leading up to the pandemic. But also gaining share in foreign investment have been other Group of Seven countries like Germany, Italy and even the UK, the Bloomberg Economics analysis found.
Countries That Didn't Condemn Russia Trail FDI Flows
Value of greenfield foreign direct investment by destination, indexed to 2010–2019 average
Sources: United Nations Conference on Trade and Development, Bloomberg Economics
That may reflect, among other drivers, a shift in US industrial policy to encourage more investment in strategic sectors like semiconductors and electric vehicles, and the response from European and Asian allies like Japan, South Korea and Taiwan.
But it also marks a remarkable pivot of another kind.
While the World Trade Organization this month said it’s premature to call an end to the era of globalization, it warned that geopolitical tensions are beginning to shape trade flows and that early signs of fragmentation are appearing. Goods trade between two hypothetical geopolitical blocs — based on voting patterns at the UN — have grown 4% to 6% slower than trade within these blocs since the invasion of Ukraine, the WTO estimates.
IMF economists earlier this year declared that flows of investment and goods were no longer following the usual paths. Where once the promise of lucrative new markets held sway, an IMF look at two decades of data found that the role of geopolitics had played an accelerating role in driving the flow of capital in recent years.
“Even if you control for features like country risk and geographic distance which generally is a key driver of bilateral trade and financial flows, you still find the geopolitics matters,” says Andrea Presbitero, deputy head of the IMF’s research division. And "geopolitical factors seem to matter more in recent years.”
Given its status as the world’s biggest trading nation, much of the shift revolves around China. Between the second quarter of 2020 and the first quarter of this year, US companies’ greenfield investments in China plunged 57.9% and those by European firms dropped 36.7% versus the five years leading up to the pandemic, an updated IMF analysis shared with Bloomberg found. Investments from the rest of Asia into China were down by more than two-thirds.
World Looks Beyond China for Factories of the Future. Foreign direct investment in China since the pandemic started, compared to the five years prior
*Emerging Europe includes Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Hungary, Kosovo, Moldova, Montenegro, North Macedonia, Poland, Romania, Russia, Serbia, Turkey and Ukraine.Source: International Monetary Fund
Behind the change is the growing importance in investment decisions of what the IMF economists and others have dubbed “geopolitical distance.” Using an index built on seven decades of UN votes, the IMF economists found that recent FDI flows had become more likely to go to geopolitically aligned countries rather than even geographically close ones.
The IMF exercise reflected a broader evolution underway among economists. For generations economists have peered out at the global economy through models reliant on the corporate drive to maximize returns, adjusted for the influence of geography or the gravitational pull of large countries. Now they are trying to deal with what in the data-driven world of economics feels like an amorphous force in geopolitics and the ever-expanding way governments define national security.
Geopolitics Edges Out Geography in Foreign Direct Investment. Annual share of global FDI between countries that are geographically or geopolitically close
Source: International Monetary Fund
To Maurice Obstfeld, a former IMF chief economist who is now a senior fellow at the Peterson Institute for International Economics, what that really means is that economists are digesting a return to what for centuries was a historical norm in which the power competition drove trade. “It's not necessarily true that the arc of history bends toward the free market,” Obstfeld says.
Penny Goldberg, a former World Bank chief economist who is also a leading expert on trade and globalization, calls geopolitics “manmade uncertainty.”
Much of what is guiding the change by governments in the US and other Western economies is a feeling that for too long their leaders had a misplaced belief in the power of markets to make the right decision. What worries Goldberg is that the world may be going too far in the other direction.
Making investments with national security rather than economics as a guiding force often entails acting more on trust than data, she says. Plenty of governments in history have a track record of making miscalculations in the name of security, like the 2003 war in Iraq, Goldberg says. If geopolitics is driving investment “you have to take the government at its word. And sometimes even well-meaning people may get it wrong.”
Goldberg is among those who see broader negative consequences for the global economy from a growing split. Those include higher inflation as the cost of manufacturing rises, less innovation as international research cooperation becomes rarer and more poverty and global inequality as investment in poor countries stalls. Like-minded rich countries investing in each other means less investment for poor countries that arguably need it more.
While the geopolitical competition so far has often been focused on strategic technology sectors like semiconductors or quantum computing, as well as new-energy projects like solar panel and battery plants and electric vehicle factories, the developing split is broader too.
Geopolitical competition so far has often been focused on strategic technology sectors like semiconductors. Photographer: Edwin Koo/Bloomberg
The world’s commodities trade is fracturing. It all starts with energy and oil and gas, but the US and its Asian and European allies are scrambling to secure new friendly supply chains for the minerals and other raw ingredients like copper, nickel and lithium vital to produce semiconductors, phones and EVs.
Global Investment Soars in Semiconductors, Renewables. Value of announced greenfield FDI projects
Source: United Nations Conference on Trade and Development
In some places the division is driven by a desire to move away from the dollar. BRICS nations are exploring a new shared currency that might shield members from the impact of sanctions like those imposed on Russia. Bangladesh has agreed to pay Russia about $300 million in Chinese yuan for a nuclear power plant. Pakistan is keen for a long-term deal to buy Russian crude in the Chinese currency.
Governments are also much more comfortable showing their hand publicly than they once were.
In a new strategy released earlier this year, Germany’s government declared that its biggest “companies must take geopolitical risks sufficiently into account in their decision making.” It also warned companies that they shouldn’t count on the government to bail them out if they one day faced costs associated with a geopolitical crisis.
A competing message from Chinese Premier Li Qiang was equally blunt: he used a trip to Germany to urge CEOs to make their own investment decisions rather than bend to their government.
It’s tempting to believe this slide all began with Donald Trump’s election in 2016. But the push toward new economic blocs was underway even before his rise or that of other populists. The Obama administration launched geopolitics-motivated trade negotiations with the EU and Asia-Pacific countries that Trump eventually killed. China’s own pursuit of its $900 billion Belt and Road Initiative that reached across Asia and into Africa was nakedly geopolitical from the beginning.
What’s likely to emerge is also more complicated than the usually-deployed Cold War analogy implies.
China still has a dominant role in many supply chains and even the new factories being built are likely to use at least some Chinese inputs for years to come. Analysis by the Rhodium Group found that as companies actively diversify investment and sourcing away from China, even substantial shifts to alternative locations may only result in small declines in China’s role because of its dominance in global manufacturing.
Equally, many emerging economies that have relationships with China still hanker for Western investment, Obstfeld points out. And many don’t want to be forced to choose between rival alliances.
The BRICS may be expanding by adding new members like Saudi Arabia but it’s a bloc still riven with its own geopolitical rivalries as demonstrated by Chinese President Xi Jinping’s decision to skip this months’ G-20 meetings in India.
Beijing’s own alliance-building is showing other cracks. Italy has signaled its plans to exit the Belt and Road Initiative. Just days after what was billed as a triumphant BRICS summit in South Africa, India and Saudi Arabia joined with the US and EU to unveil a plan to build trade and transport links between South Asia, the Middle East and Europe.
Economist Jim O’Neill, who was at Goldman Sachs Group Inc. in 2001 when he first coined the term BRIC to highlight a new club of emerging economies, calls a divide into blocs unrealistic and “hype from political figures and some idealists.”
“Even if you look at the countries who are the most experienced or successful in terms of exporting, for example Germany, South Korea, they are very careful about becoming too beholden to one group or another,” he said.
And yet it’s hard to ignore the emerging data. Companies are betting on geopolitics and it’s having consequences. China’s share of Asian exports is losing ground at the fastest pace in at least two decades in part because trade is diversifying, economists at Nomura said in a report this month. Mexico recently overtook China as the US’s top trading partner.
The “fragmented geopolitical landscape” that BlackRock Chairman Larry Fink declared as a new “structural” force shaping returns on the firm’s July earnings call is here to stay. And even the most iconoclastic CEOs are preparing for a new world. In his own July call with Tesla investors, Elon Musk offered his solution to the rise of geopolitics: “The best we can do is have factories in many parts of the world,” Musk said. “If things get difficult in one part of the world, we can still keep things going in the rest.”
