Slow progress tackling construction backlog New home sales have ticked up since the end of last year, helped by a post-zero-COVID recovery in consumer confidence and large reductions in mortgage rates and down-payment requirements. But the improvement has …
26th May 2023
In a fracturing global economy, India stands out as a prime location for the “friend-shoring” of manufacturing supply chains out of China. The manufacturing powerhouses of Gujarat and Tamil Nadu are best-placed to benefit from this shift. But a handful of …
23rd May 2023
Fracturing back in the spotlight The worsening relationship between China and the US is set to be one of the key themes of the G7 meeting, now underway in Japan. This dedicated page on our website is the best place to go for our ongoing work on …
19th May 2023
South Africa has traditionally sought to be non-aligned and, in our ‘ mapping decoupling ’ work, we placed it in neither the US nor the China camp. But recent developments suggest that it could be leaning towards the latter. If that’s the case, it might …
16th May 2023
The idea of a new BRICS currency to settle trade or hold in reserves instead of the dollar has been doing the rounds recently. This could be modelled on the IMF’s Special Drawing Rights. But getting India on board with China would be difficult. And if the …
4th May 2023
Neil Shearing Group Chief Economist The past couple of months has seen an upsurge in the number of analysts arguing that the renminbi will start to challenge the dollar’s position as the world’s reserve currency. But while the amount of world trade that …
2nd May 2023
India is benefitting from maintaining its historic unaligned stance in tensions between the US and Russia. Since the start of the war in Ukraine, India has been ramping up oil imports from Russia to take advantage of discounted prices. (See Chart 1.) And …
20th April 2023
The increasingly diverse array of creditors to debt-distressed EM governments – and the difficulties in getting China and Western lenders to see eye to eye – is already gumming up sovereign debt restructurings. And despite some positive noises from the …
17th April 2023
Difficult balancing act for the Philippines The US and the Philippines this week began their largest-ever joint military exercises, with 17,000 troops taking part. The exercises follow an agreement in February that provided the US with four more …
14th April 2023
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . China and Brazil are taking steps to allow bilateral trade to be settled in renminbi rather than US dollars. The Brazilian branch of ICBC will …
31st March 2023
Official efforts to curb China’s reliance on imported semiconductors have been going on for years. In 2015, the government set a goal of China being 70% self-sufficient by 2025. But progress toward that target has been much slower than hoped. Only a third …
24th March 2023
Labour reforms could encourage more MNCs The overarching message from our latest India Economic Outlook published this week is that while prospects for the economy look a little uninspiring over the near term, there are reasons to be optimistic further …
The fracturing of strategic supply chains into US and China trade blocs threatens Australia’s existing significant trade with China but also presents Australia with an opportunity to align its trade relationships with its existing security …
15th March 2023
The restoration of diplomatic ties between Saudi Arabia and Iran adds to signs that geopolitical tensions in the Middle East are easing, which may help to reduce risk premia in financial assets in the region as well as the oil market. Tensions will not …
13th March 2023
Germany is more vulnerable than most advanced economies to a reduction in trade with China both because of the scale of trade and the use of Chinese-made inputs to its large manufacturing sector. We have highlighted in our Spotlight series that the …
6th March 2023
The war in Ukraine. Ageing populations. Rising temperatures. Investors are having to grapple with a formidable range of uncertainties around the long-term outlook for the global economy and markets. Their challenge is compounded by the fracturing of the …
22nd February 2023
While it is in America’s strategic interests to build stronger economic ties with allies to counter China’s growth, its protectionist tendencies could undermine those goals and blunt the effectiveness of its interventionist foreign policy. Our work on …
While some of the measures unveiled in the FY23/24 Union Budget are geared towards shoring up popular support ahead of next year’s general election, there is a clear long-term focus too. The projected jump in capital expenditure, cuts to import duties on …
3rd February 2023
Common currency talk highlights dollar concerns The week kicked off with the surprise news that Argentina and Brazil are looking at establishing a common currency to facilitate trade between the two countries. Further reports have clarified that, rather …
27th January 2023
As the world’s biggest polluter and its biggest investor in renewable energy, China is a study in contradiction on the climate question. The government’s success in reining in emissions and its industry’s growing dominance of green technology supply will …
26th January 2023
2023 has begun with the Ukraine war still raging, tensions mounting over global trade practices, but also signs that China is dialling down its aggressive diplomatic posturing. By the end of this year, candidates will be dialling up the rhetoric as they …
16th January 2023
November's briefing on Asia’s big macro and market stories included discussion of US-China relations in the wake of the Xi-Biden meeting as well as the economic impact of Beijing’s looser zero-COVID rules and property sector support measures. Plus, as …
17th November 2022
This week’s G20 summit in Bali, Indonesia, has so far exceeded low expectations. There is broad condemnation of the war in Ukraine and bilateral talks between China and the US seem to have been amicable. But with the meeting dominated by geopolitical …
15th November 2022
Since independence, India has preferred to stay unaligned geopolitically. But in a fracturing global economy, the security and macroeconomic benefits of leaning towards the US – and away from China – may prove too compelling for India to remain on the …
24th October 2022
General Secretary Xi’s Report to the Party Congress signalled a further shift away from market-based reforms in favour of a state-led campaign to increase self-sufficiency and economic security. Investors should also be wary of the growing focus on …
17th October 2022
Apple production shift boosts local manufacturing Regular readers of our India research will be (perhaps all-too-) familiar with our view that the key to India sustaining rapid economic growth over coming decades is the development of its manufacturing …
14th October 2022
US-Saudi relationship dials back Developments since last week’s OPEC+ decision provide further evidence that the relationship between Saudi Arabia and the US has soured. (See our immediate take on it here .) Chair of the US Senate Foreign Relations …
13th October 2022
We think the UK labour market loosened a bit in August (07.00 BST) Headline inflation in Brazil probably fell further in September (12.00 BST) US small business survey is likely to show the labour market cooled last month (16.00 BST) Key Market Themes …
10th October 2022
Our annual Spotlight series this year looks at the implications of the “fracturing” of the global economy that we believe is being caused by the re-emergence of geopolitics as a driver of policy. The key divide is between China and the West. Events at the …
7th October 2022
The shocks caused by the pandemic, the war in Ukraine and US-China tensions will have a lasting impact on the world economy, reversing decades of global integration in some areas while strengthening ties in others. In this series of reports we map out …
6th October 2022
The trend towards ever more “financial globalisation” has already decelerated and will probably slow further as the global economy fractures and policymakers favour resilience over efficiency. While a disorderly rupture of financial relations remains …
Yesterday’s decision by OPEC+ to cut oil production quotas by 2mn bpd adds to signs that, in a world economy that is fracturing, Saudi Arabia is tilting away from the US and leaning towards a China-led camp. That would threaten to undermine the push by …
China’s dominance in the supply of some key materials needed for the green transition means that US-aligned governments will continue efforts to secure supplies from “friendly” sources, which could add to the cost of greening economies in the short …
Drop-In: Spotlight – Economic fracturing, commodities and climate change …
29th September 2022
Drop-In: Spotlight – What an era of economic fracturing could mean for markets …
Drop-In: Spotlight – The fracturing of the global economy and its macro consequences …
Taiwan has dominated the headlines this week, with Nancy Pelosi’s visit triggering Chinese military drills and restrictions on cross-strait trade. These moves appear largely symbolic. China’s bans on exports of natural sand and imports of some Taiwanese …
5th August 2022
The trade sanctions introduced by China on Taiwan in retaliation for the visit of Nancy Pelosi are small in scope rather than serious efforts to force Taipei to shift course. China is constrained in the economic pressure it can exert unless it is willing …
3rd August 2022
In adapting to the threat of having its foreign exchange reserves frozen, the People’s Bank is likely to shift more of its portfolio into unconventional alternatives, including EM sovereign debt and real assets. But as long as the PBOC wants to continuing …
1st April 2022
Claims that the war in Ukraine will prove to be a watershed moment that ends the dollar’s position at the heart of the global financial system are wide of the mark. It could accelerate the development of smaller trading blocs that use alternative …
23rd March 2022
At the Beijing Winter Olympics, China is once again displaying its sporting prowess. But the international reception has been notably icier than that for the 2008 Summer Games, highlighting that China’s continued economic rise is being accompanied by a …
17th February 2022
China and countries that align more closely with it than with the US together account for around half of the world’s population. But the China bloc is far smaller economically than the US bloc and far more dependent on the rival bloc as a source both of …
17th September 2021
Tech crackdown goes to New York… Decoupling has entered a new phase over the past year. Where China previously was trying to temper US efforts to decouple, in key areas it now appears to want the same. The Five-Year Plan’s push for self-sufficiency in …
9th July 2021
