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In their latest podcast Brunello Rosa and Manas Chawla discuss how the G20 in India delivered important results, in spite of the disappointing final statement.
15 September 2023
In their latest podcast Brunello Rosa and Manas Chawla discuss how BRICS enlargement challenges the G20’s role in international affairs.
7 September 2023
In their latest podcast Brunello Rosa and Manas Chawla discuss Joe Biden's Attempts to reshape global geopolitics with unexpected moves in the Middle and Far East.
31 August 2023
In their latest podcast Brunello Rosa and Manas Chawla discuss the risks posed by China's real-estate crises and their potential implications.
25 August 2023
In their latest podcast Brunello Rosa and Manas Chawla discuss the space race between US and China and its wider geopolitical implications.
18 August 2023
In their latest podcast Brunello Rosa and Manas Chawla discuss the intensifying battle between activists and negationists of climate change.
10 August 2023
In their latest podcast Brunello Rosa and Manas Chawla discuss how the Spanish elections had shown the difficulties of forming a right-wing coalition to rule the EU.
4 August 2023
In their latest podcast Brunello Rosa and Manas Chawla discuss how the world's major central banks are likely to continue increasing rates in July and August.
27 July 2023
In their latest podcast Brunello Rosa and Manas Chawla discuss why It will be difficult for central banks to return inflation to their targets.
20 July 2023
In their latest podcast Brunello Rosa and Manas Chawla discuss the six key elections that will take place in DMs and EMs in 2024, which can change the fate of the world.
11 July 2023
In their latest podcast Brunello Rosa and Manas Chawla discuss the outcomes of the latest EU council, especially the lack of agreement on migration.
7 July 2023
In their latest podcast Brunello Rosa and Manas Chawla discuss how the US is trying to ease the existing tensions with BRICS countries.
30 June 2023
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The “War of Corridors” is Yet Another Battleground of Cold War 2
The “War of Corridors” is Yet Another Battleground of Cold War 2
The “War of Corridors” is Yet Another Battleground of Cold War 2
by Brunello Rosa
18 September 2023
In 2013, China launched its One Belt One Road (OBOR) project, later rebranded Belt and Road Initiative (BRI). Taking the cue from Marco Polo’s “Silk Roads,” the BRI’s initial intention was that of allowing China to export its excess capacity to neighbouring and allied countries in South-East Asia, Central Asia, the Middle East, and eventually up to Europe. The terrestrial “Belt” was accompanied by a crucial maritime “Road,” which was also aimed at breaking China’s straitjacket represented by its inability to project its influence over the seas.
In fact, the US is totally unconstrained in its dominance of the seas, the same way the British empire was, and has made its maritime superiority a key geo-strategic lever. Conversely China needs to break the maritime constraints posed by the presence of many other countries off its coasts: Japan, North and South Korea, the Philippines, only to name a few. Opening a commercial road, through various ports purchased or built in key countries along the BRI, allowed China to also establish a military presence over the seas, at the very least to defend its legitimate commercial interests.
The US reacted to that move by establishing the TPP, the Trans-Pacific Partnership, which was conceived by the Obama administration, subsequently abandoned by the Trump administration, and eventually revived by Japan – without the US – under the name of Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Meanwhile, the BRI became an instrument to impose “slave contracts” to adhering countries, that found themselves in a debt trap with China (e.g. Sri Lanka). The BRI was also used by China to export (and impose) its technology to the countries along the way via the so-called “Digital Silk Road Initiative,” launched in 2015.
The “War of Corridors” is Yet Another Battleground of Cold War 2
The “War of Corridors” is Yet Another Battleground of Cold War 2
With an inexcusable delay of around ten years, the G7 countries reacted to China’s BRI by launching their Partnership for Global Infrastructure and Investment (PGII), a USD 600bn investment plan, that is supposed to offer an alternative to China’s BRI and its associated debt traps. Last week, at the G20 meeting in New Delhi, the G7 agreed to create a logistical counterparty to the PGII, i.e. the so-called “India-Middle East-Europe Economic Corridor,” i.e. a railway network designed to provide reliable and cost-effective cross-border ship-to-rail transit, complementing existing maritime and road transport routes passing through India, the UAE, Saudi Arabia, Jordan, Israel, Italy, France and Germany.
This new strategic corridor excludes Turkey, a country that is between Europe and the Middle East, is a NATO member while being closer to Russia even after the invasion of Ukraine and has sided with China in its “space race” against the US. For this reason, Turkey is now proposing an alternative corridor, the Iraq Development Road, which foresees the participation of Kuwait, Iraq, Qatar and the UAE, together with Turkey. Besides all these corridors, there’s also the so-called “North-South Transport Corridor,” signed between India, Iran, Azerbaijan and Russia in September 2020, and which connects these three countries.
All these initiatives show the importance of establishing new “corridors” to make sure that goods and technology will continue to be efficiently transported and exported even in presence of balkanised supply and value chains, which are a distinctive feature of the ongoing Cold War 2 between US and China.
LATEST RESEARCH
Review: In a Split Decision, The BOE Pauses After the Lower Inflation Data
by Brunello Rosa and Nato Balavadze
21 September 2023
Flash Review: The Fed “Skips” September, But Still Signals Another Hike in 2023
by Brunello Rosa and Nato Balavadze
20 September 2023
Review: ECB Hikes Rates and Hints at the Peak of The Tightening Cycle
by Brunello Rosa and Nato Balavadze
14 September 2023
Central Banking in BRICS: Post-Pandemic Landscape And Next Likely Moves
by Ridipt Singh
8 September 2023
The Russia-Belarus Union State and the Relevance of the Suwalki Gap
by London Politica
5 September 2023
Looking Ahead
The Week Ahead
The Quarter Ahead
The Quarter Ahead
Week: 18 - 24 September 2023
The Week Ahead: Headline Inflation To Stay Unchanged In the EZ, While Rising In the UK; Fed to Take A Pause; BoE To Hike
In the US, the Fed is expected to maintain its target Fed funds range at 5.25% - 5.50%.
In the EZ, in August, headline inflation rate is expected to stay unchanged at 5.3% y-o-y, while core inflation is likely to fall to 5.3% y-o-y (p: 5.5%).
In the UK, in August, headline inflation rate is seeing rising to 7.1% y-o-y (p: 6.8%), whereas core inflation is expected to ease off to 6.8% y-o-y (p: 6.9%). In August, retail sales are likely to rise to -1.2% y-o-y (p: -3.2%). In September, Gfk consumer confidence is seen contracting to -27 (p: -25).
Still in the UK, the BoE is expected to increase its Bank Rate by 25 bps to 5.5%.
The Quarter Ahead
The Quarter Ahead
The Quarter Ahead
The Quarter Ahead: UAW Union Announced A Strike; The EU Is Probing China's EV Subsidies; North Korea-Russia Summit
US United Auto Workers (UAW) union announced a partial strike. In a White House speech on Friday, Biden urged a "win-win agreement" to address the deadlock between the UAW union and the three major American car companies: Ford, General Motors, and Stellantis. Approximately 12,700 UAW workers stayed on strike for a second day on Saturday in an effort to push for wage increases, shorter hours and improved retirement benefits. Stellantis stated on Saturday that their latest offer to the UAW includes salary increases of almost 21% during the contract, which involves an immediate 10% raise.
The EU has initiated an investigation into subsidies provided by China for electric vehicles. As European Commission President Ursula von der Leyen said "global markets are now flooded with cheaper electric cars. And their price is kept artificially low by huge state subsidies”. The Commission will take up to 13 months to decide if it should apply tariffs higher than the usual 10% rate for cars.
North Korea’s Kim Jong-un visits Russia. Putin stated that Russia aims to establish “good neighborly relations” with North Korea, despite Western warnings about adhering to international sanctions against Pyongyang. The Kremlin stated that no formal agreements were made so far, despite earlier speculations about a potential arms deal that could impact Russia's situation in Ukraine.
Poland, Slovakia, and Hungary plan to go against the EU's decision and continue their ban on importing grain from Ukraine. The EU announced the end of its temporary ban on Ukrainian grain exports to Eastern European countries, which was imposed in May to prevent price competition for local farmers. In the meantime, Zelenskyy who welcomed the news, is expected to meet Biden during his US trip.