Sino-US Financial Decoupling: a series of bad decisions?

Shresth Goel

Over the last decade, the involvement of Chinese enterprises in American primary markets has aggregated to a combined market capitalisation of $2.1tn. In light of this, the ongoing financial decoupling measures being taken by both countries calls into question the fate of capital movement across the two biggest economies in the world. 

These concerns have become more pressing following the decision of the Chinese group Didi Chuxing (second-biggest IPO – $4.4bn – by a Chinese company in New York since Alibaba in 2014) to delist from the New York Stock Exchange and go public in Hong Kong. Although the decision may seem coerced due to intense pressure from Chinese cyber security watchdogs, it opens up the possibility of more companies following suit to avoid legal troubles with the Chinese government. On the other hand, Chinese state-run telecom groups (namely China Telecom, China Mobile, and China Unicorn) were booted from the New York Stock Exchange in early 2021 due to an executive order from the Trump administration that prohibited American investments in businesses with alleged ties to the Chinese military. 

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Are we living in a world of de-globalisation? 

Alainah Amer 

Recent trends are expecting the global economy to move away from interdependence between nations to weaker interconnectivity, localised policies, and enhanced border controls, a phenomenon also referred to as ‘de-globalisation’. With the catastrophic impact of the global financial crisis, the rise of protectionism, exemplified by the US and China engaging in a trade war, and the implementation of Brexit, there are widespread concerns amongst economists that de-globalisation is a force that is here to stay. COVID-19 has further exacerbated these concerns. The ongoing pandemic has uncovered the vulnerable roots of globalisation illustrated by a sharp fall in global GDP, plunging levels in international trade, the decline of foreign direct investment, the vast disruptions of global value chains and lastly, higher unemployment rates. These trajectories seem to prove that globalisation comes with severe risks – which have the tendency to spread like wildfire. This begs the question of whether globalisation might actually be a ‘bad’ thing.

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China in Africa: A Force for Good?

Joshua Mathew

Introduction

The rather low-profile Forum on China-Africa Cooperation, concluded recently, saw a reaffirmation of China’s commitment to the region. Africa provides a smorgasbord of economic benefits to China: it is a source of raw materials and agricultural produce, and is an external market for Chinese construction firms. With the demographics of Africa consisting of mostly young consumers, there are lucrative opportunities for Chinese private capital to conduct business in the region. In addition, in terms of political value, Africa is a key partner – as a crucial voting bloc in the United Nations, there is a strategic dimension to the relationship.

One aspect that deserves further attention is the development of telecommunications platforms in Africa. The main focus will be on the Chinese involvement in this area as well as its potential security implications. Some mitigating strategies to deal with the risks will also be provided. 

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Net Zero 2050: How the UK can get Oil & Gas on Track

David Vergara Schleich, Tanya Lim, and Jenny Su

Introduction and Current Policies

In preparation for the 2021 COP 26 Conference in Glasgow, the United Kingdom (UK) published an ambitious white paper entitled “Net Zero Strategy: Build Back Greener” in which it outlines policies to achieve a greenhouse gas (GHG) neutral economy by 2050.1 This makes the UK the first country to implement a legally binding timeline. In line with this strategy, the Government aims to mobilize up to £270 billion in public and private sector funds to transition the Power and Energy sector.2 Crucially, instead of viewing the Oil and Gas sector as an impediment to GHG neutrality, the Government envisions the sector to play a leading role in the energy transition .4 As part of the Net Zero Strategy, the relevant UK regulatory body , the Oil and Gas Authority (OGA), has echoed the urgency to achieve GHG neutrality. In its “Revised Strategy”, the OGA warned that it would exercise its punitive powers should companies fail to comply with the timeline.5 Thus, the objectives of the government’s Net Zero Strategy are two-fold: in political-environmental terms, it is to achieve GHG neutrality to curb climate change and position the UK as a global paragon in environmental governance; secondly, it seeks to walk the fine line between incentivizing and coercing the Oil and Gas sector to accelerate its transition towards carbon neutrality and beyond 2050, towards renewable energies. 

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Climate Change and its Impact on Businesses

Climate change has come to the forefront of global politics in recent years, with large scale protests led by international organisations such as Extinction Rebellion gaining considerable momentum. In particular, the protests at the end of September 2019 were the largest display of resistance against climate change in recent history, and were timed to coincide with the United Nations Climate Summit. This protest saw over 6 million people take to the streets in 180 countries to demand faster and stricter action on climate change. What made this movement unique was that it displayed not only the realities of climate change but it also demonstrated the widespread concern that consumers around the world feel for it. It is important to consider the impacts that this issue and the heightened awareness that surrounds it has on businesses around the world. 

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Property: Hot & Cold event at JP Morgan HQ

On Wednesday 14 January, King’s Think Tank hosted a special business and economics event on the top floor of the JP Morgan headquarters, in Canary Wharf. Fully booked and overlooking one of the premier views in London, the inaugural event of the second semester welcomed housing experts Scott Corfe, Head of Macroeconomics at the Centre for Business and Economics Research (CEBR) and King’s College London Geography Professor Chris Hammett, to discuss the UK property market. Continue reading “Property: Hot & Cold event at JP Morgan HQ”