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Trade is not a weapon. Let’s not use it as one
Monday 18th of February 2019
At the Munich Security Conference last week, I moderated a panel discussion with an intriguing headline: can we make [economic] competitors like the US, Europe and China trade again?
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5 hidden ways that globalization is changing
Thursday 14th of February 2019
Globalization has been a powerful force in shaping modern human history.
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The good news on pensions: sustainable equals profitable
Thursday 7th of February 2019
Would you be interested in investing in companies that produce nuclear weapons? Or companies that damage the environment, pollute our seas or violate human rights? Or companies that have been related to corruption scandals? If your answer is “no”, unfortunately it is likely that you are investing in some way in these types of companies today.
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How trade wars pose a threat to the global economy
Thursday 7th of February 2019
In a year defined by retaliation and counter-retaliation, resulting in a trade impasse between the United States and China, more than half of the two nations’ bilateral trade has been impacted by succeeding escalating rounds of tariffs. Who is winning or losing depends on whom you ask, but regarding trade flows, it’s certainly neither of the leading contenders.
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Make-or-buy decisions of multinational firms depend on the technological importance of the product
Tuesday 5th of February 2019
Global flows of foreign direct investment (FDI) have been steadily increasing in recent decades, resulting in the presence of large multinationals spanning global production networks. Most notable has been the recent growth in Chinese takeovers around the world. For example, China’s HNA Group (of which Hainan Airlines is a part) bought Swiss-based airline caterer Gategroup as well as Swiss aircraft maintenance organisation SR Technics. Overall, the share of non-OECD economies in global outward FDI has increased by a factor of 25 since 2003 (OECD 2015).
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Here are the 20 busiest ports on the planet
Tuesday 5th of February 2019
An estimated 90% of world trade is facilitated by maritime shipping, and as trade volumes continue to increase, the world’s busiest ports continue to grow larger and more efficient to meet demand.
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Can free trade deliver cheaper renewable energy? Ask Mexico
Thursday 24th of January 2019
Clean energy as a concept began as a merely experimental way to produce energy. The prices of this new technology were sky-high, and although more and more countries developed public policies geared towards a faster energy transition, clean energy remained only a concept and not a mainstream technology in the mindset of a vast portion of the world’s population.
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The IMF has cut its forecast for the global economy
Monday 21st of January 2019
While global growth in 2018 remained close to postcrisis highs, the global expansion is weakening and at a rate that is somewhat faster than expected. This update of the World Economic Outlook (WEO) projects global growth at 3.5 percent in 2019 and 3.6 percent in 2020, 0.2 and 0.1 percentage point below last October’s projections.
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China set to post slowest growth in 28 years in 2018
Monday 21st of January 2019
China’s economic growth cooled slightly in the fourth quarter from a year earlier as expected, weighed down by weak investment and faltering consumer confidence as Washington piled on trade pressure, leaving 2018 growth the weakest in 28 years.
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What chocolate and batteries can teach us about Globalization 4.0
Sunday 20th of January 2019
The United States is the world’s largest producer of chocolate, despite barely growing any cocoa trees. Conversely, the Democratic Republic of Congo (DRC) holds over half of the world’s reserves of cobalt, the key raw material for the batteries used to power smartphones and autonomous vehicles. And yet, the DRC barely exports any of these products. Instead, the US, China, South Korea and Japan are the world’s largest manufacturers and exporters of renewable batteries. Why is this the case?
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Four future scenarios for trade and investment. Which one will win?
Friday 18th of January 2019
The global policy outlook for trade and investment has darkened over the past year. Trade conflict is proliferating while structural challenges have deepened. Business sentiment is on the decline. The tariff has returned as a tool for managing trade relations and triggered tit-for-tat retaliation. The World Trade Organization (WTO) could be at risk.
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How a trade war would impact global growth
Friday 18th of January 2019
To estimate the effects of trade tensions on global growth, we created an economic simulation. First, we calculated the direct impact of tariff hikes on GDP. Our simulation assumes that the US will put a 25% tariff on the $505 billion worth of goods imported by China, and that China will retaliate with 50% of the US tariff hike.
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How to build a more balanced global economic architecture
Friday 18th of January 2019
This article is part of the World Economic Forum’s Geostrategy platform
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A brief history of globalization
Thursday 17th of January 2019
When Chinese e-commerce giant Alibaba in 2018 announced it had chosen the ancient city of Xi’an as the site for its new regional headquarters, the symbolic value wasn’t lost on the company: it had brought globalization to its ancient birthplace, the start of the old Silk Road. It named its new offices aptly: “Silk Road Headquarters”. The city where globalization had started more than 2,000 years ago would also have a stake in globalization’s future.
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3 benefits of public-private mega-projects that most people ignore
Wednesday 16th of January 2019
The largest in-progress mega-project in Egypt is being completed now in the heart of Greater Cairo. The Egyptian Refinery Company (ERC) is a $4.3 billion facility, and when it comes online in 2019 it will be capable of producing 4.7 million tonnes of refined oil products and derivatives per year.
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Why the world is not as globalized as you think
Tuesday 15th of January 2019
Recent years have called into question the idea of an interconnected, open world in which goods, capital, people and ideas can move across borders, seeking more choice and opportunities, and faster innovation. Brexit, a shift in US policy toward protectionism, and a rising tide of populist parties riding a wave of anti-global, anti-immigration sentiment made 2018 another year of headlines about the imminent death of globalization.
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What a football shirt tells us about globalization 4.0
Thursday 10th of January 2019
It was an eye-watering deal. Starting in the 2017-2018 season, Japanese internet service provider Rakuten became the main global sponsor of FC Barcelona for a record €55 million per year. Only one other company, kit provider Nike, also had its logo on the iconic shirts of the “blaugrana”. They made a powerful pair of global sponsors.
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Beyond populist disruption, what now for global free trade?
Thursday 10th of January 2019
In the second year of his presidency, Donald Trump started to fulfill his promised “America First” agenda by launching trade wars with allies and adversaries alike. In the absence of leadership from governments, the responsibility of responding to the populist disruption now falls to the business community. In 2018, trade, more than any other policy area, was “disrupted.” What used to be an archaic, technical, and – let’s face it – boring array of issues now dominates front-page headlines, magazine covers, and even John Oliver’s comedic documentaries on HBO’s “Last Week Tonight.” Constituencies that have traditionally opposed free-trade agreements (FTAs) are now extolling their virtues, and countries not known for their free-trade sensibilities – including China, Russia, and France – are nominating themselves as the defenders of the global trade system.
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Confronting neo-mercantilism: why regulation is critical to global trade
Monday 7th of January 2019
The regulation of international trade is under the spotlight like never before. Trade tensions between the US and China, a fractious Brexit negotiation, the rewiring of NAFTA and a deadlocked World Trade Organization (WTO) highlight current challenges and the importance of legal regulation to keeping global trade and investment flowing.
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10 predictions for the global economy in 2019
Friday 4th of January 2019
The global economy started 2018 with strong, synchronized growth. But as the year progressed, momentum faded and growth trends diverged. The US economy accelerated, thanks to fiscal stimulus enacted early in the year, while the economies of the Eurozone, the UK, Japan and China began to weaken. These divergent trends will persist in 2019. IHS Markit predicts global growth will edge down from 3.2% in 2018 to 3.1% in 2019, and keep decelerating over the next few years.
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If this is Globalization 4.0, what were the other three?
Saturday 22nd of December 2018
“Globalization 4.0 has only just begun, but we are already vastly underprepared for it,” wrote Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, last month when announcing the theme of Davos 2019.
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Is short-termism always bad?
Thursday 20th of December 2018
For decades, academics and practitioners alike have argued that companies do not implement long-term strategies and that shareholders must cure the disease of short-termism to maximise shareholder value. This column examines the perils of short-termism in the context of investment policies and managers’ incentivisation. It finds that shareholder value maximisation for a typical S&P 500 firm is not as straightforward as ‘no short-termism’, and depends on firm and investor characteristics.
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This is what US economists see as 2019’s biggest threat
Wednesday 19th of December 2018
Some of the US’s top economists are the most worried they’ve been in years about the country’s economy.
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Somalia’s e-commerce businesses are rising against all odds
Monday 10th of December 2018
Abdi Addow likes to have oodkac for breakfast, the jerky-style beef cubes that Somalis usually eat with injera flatbread. Addow especially loves his mother’s serving, but since he doesn’t live with her in the Somali capital, he logs online and uses a third-party delivery service to bring it to him from her place.
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The challenges to manufacturing workers in the wake of globalisation
Friday 7th of December 2018
The impact of trade shocks on labour market shifts is usually studied in the context of re-training and social welfare frictions. Using evidence from Denmark, this column shows how workers can experience long-run reductions in earnings no matter how easy it is to change sector. A sudden and obligatory shift toward a new sector may, by its nature, generate some worker dissatisfaction.