Brunswick Geopolitical helps companies understand the complexities and risk in key markets around the world, enabling them to better anticipate, prepare for and react to significant geopolitical events that affect their businesses. Authored by Dominick Donald, former foreign affairs and defence editorial writer at The Times, our “Events to Watch” looks at some of emerging global themes over the coming months.
While the Trump administration delights in disrupting the established order, Beijing appears to be working hard to steady it. Premier Li Keqiang told the WEF China meeting in September that Beijing would maintain its economic course and thus the global economic equilibrium; no big stimulus, no devaluation of the yuan, and continued gradual reallocation of credit from SOEs to SMEs, even as the economy gradually opens to foreign investment. (There are of course questions about whether Beijing really will deliver on much of this agenda; the US is not the only country that believes China’s economy is becoming more, not less, state-directed.) Meanwhile Foreign Minister Wang Yi, speaking at the UN General Assembly at the end of the month, assured the world that China’s international course was also set; despite temporary trade tensions with the US, Beijing would remain a defender of the current international order and a committed multilateralist.
Yet the past month has also provided plenty of reminders of the issues that make China a more volatile element than it would have the world believe. There is still no sign of a resolution to the incipient trade war with the US, which despite Beijing’s ‘keep calm’ messaging is sparking real concern that significant economic damage will result. In another attempt to soften the impact of that dispute, the central bank reduced reserve requirements to introduce more liquidity into the economy – a risky move, given that it might increase unwise lending by a sector already carrying huge bad loans, and one which prompted a 3.7% drop in the Chinese stock market when trading opened on 8 October. An alleged Chinese intelligence officer was detained in Europe and extradited to the US to face charges of industrial espionage – a reminder of Western concerns about Chinese intellectual property theft, which is also a major plank of Trump’s trade dispute with Beijing...