Global clusters were in formation even before the pandemic. The pandemic has further deepened the clusterisation of centres of the World. We now have 3 different centres Europe, Asia and America. Trade was already getting regional and now it has gone further to get ever increasingly regional. North America , Europe and Asia being the 3 centres of the world, Asia seems to be benefitting the most from clusterisation. North America has very limited growth,. Europe has negative growth also but Asia countries mainly China seem to grow at an unprecedented growth rate. Also the dependence on trade with other centres is limited as far as other countries are concerned. With the banning of Chinese products in some countries and post pandemic countries not preferring the having their supply chains concentrated in China, South east Asia are bringing in various supply chains, the production however continues to be carried out in China. The products are only either assembles in South...
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The pandemic has left the economies of all countries in doldrums. With the supply chains disrupted, many countries banning China and most countries starting home production, the economic state of finances are in an extremely in competitive state. The biggest challenge most corporations are facing are due to the fact that they have spent almost the last decade trying to excel supply chains and finding the best manufacturer in China, however post COVID19 era they now have to move to home production and the state of home production does not look very rosy. The pharmaceutical industry are desperately trying to move their production to either Vietnam or Philippines and other such nation states which can ensure quality of production and are yet cheap. Production moving towards more politically independent countries thc trade agreement. The United states not being part of it. Mexico and Canada are a part however. The formation of regional nexus is therefore inevitable...
COVID19 has made the globalised world go domestic. Countries are now looking inwards rather than outwards and are facing the never seen before challenge of global supply chains getting disrupted and other such issues. It ll started a few years ago when the world started drifting in regional clusters. The world had already been drifting into large regional clusters. If we look at the North American model where USA had been doing more trade with Canada and Mexico than with China we understand that already in the pre pandemic scenario it was the case. Now we have problems such as we do not know when the International travel will be possible or we do not know when the borders will open up, coupled with problems such as neo protectionism, industrial policies and subsidies. All these steps are taken to ensure that we wind up doing more trade than with far off nations. The next 5 to 10 years are going to be clustered economies rather than a globalised economy. The countries i...
The tensions at the Indo China border are looming since the war of 1962 over the disputed region of India and China. With Chinas expansionist policies it is obvious tat China is going to take advantage of the situation and try to establish its supremacy over the disputed areas with India. This has been the first time since 1962 that Indo China tensions have escalated to this level. With COVID19 fears looming and fears of a second wave of infection both countries have adopted the policy of who goes first. While India has beefed up security measure so has China and both the countries are seeming to play the standoff game. The outreaches between India and Russia since the India- China standoff are clues to Russia's growing importance . Early this mont before the June 6 LG -level talks between India and China, foreign secretary Harsh Vardhan Shringla reported a clash between Indian and Chinese troops on June 15 in Galwan valley, Indian Ambassador to Russia had a confidential ...
With COVID 19, Indo China war tension and the oil prices tumbling to its all time low we are experiencing market situations like never before. In such situations it is difficult to asses where the markets are heading and its effect on global economy. It is further difficult to asses whether it is a bull or a bear run. Following are some guidelines as to how to go about with it: Cash : The inflation rate is always increasing. It is impossible to asses where the inflation will be in such situations. Holding cash is traditionally considered a far worse option but it also depends on what currency is the cash held in. If it is held in the relatively stronger US Dollar then the risk is mitigated to some extent as the Dollar is a far more stronger currency than some other currency of the world. Stock Market: With the markets in turmoil it is best to invest the least amount of money in Stocks unless you are an active investor and can spare the time to manage your money on a daily b...
The COVID19 cases rise has left the economies of many countries looming in the dark. Recession for several countries had already begun late in 2019 and has further continued into the first quarter of 2020. With complete lockdown and with best of the measures in place by the Government and the International fraternity the economies of several countries has been nearing a recession let alone see a recovery. COVID19 fears led to shut down of entire economies and countries. It led to a panic situation wherein the country had to produce packages for stimulus and bail out packages which further added to the burden of deficit on the current account of most countries. With the supply chains disrupted, the Indo- China tensions and lack of motivation of the public to invest further coupled with lack of demand is going to make recessionary phase last as a U than a V. Countries like India may see a recovery but it will take some time until it fully recovers. In India the ...
The world has not seen carbon rise the way it has in the past hundred years till more than a million years ago. The way carbon cycle works is key in understanding the levels of CO2 in the air as well as how the emission of this gas inversely affects the climate and the weather patterns as well as economic turmoil.All the carbon buried in the earth in the form of fossil fuel is burned up by man and put into the atmosphere. The way man has altered this cycle is unbelievable and it has not been done so since the beginning of civilisation. It is important to understand how the cycle works. The scientist call this age as the age of fossil fuels. The effects on economy will be catastrophic as entire shore line economies will disappear along with the fishing industries. New industries will be given rise to and the climate change will have enormous effects on outputs of agriculture production and fisheries. economies of countries will be lost and so will...
The Indo Chinese war has been on the minds on the world. The relations between both countries has been sour in the past and will continue to be so till the tibet and the disputed land battle is not solved. India and China have seen a war in 1962. Both countries in the past have tries to solve the disputed land issue but nothing has seemed to work for either of the countries. The World while looking at Indo China relations and the war and amidst rising corona virus cases has seen a fall in the indices worldwide. Indian indices along with S&P Global as well as other Asian markets have opened much lower and will continue so in the midst of the war, rising Corona virus cases as well as being in the middle of a recession and far from revival ind of an economy. China has been the supply chain giant for most countries. With the corona virus in already many countries such as America had boycotted Chinese goods and most countries in the European Union too had done so. The far will ...
India and China are at the forefront of the fight for being the next super power. India and China with their huge population and mainly domestic, nationalised and self dependent economy can easily achieve this. India and China have been in this rat race for quiet sometime but China has gone way far ahead. It is very close to toppling USA as the superpower in terms of GDP which is the close calculator for figuring out who is the next super power. India however still is coping up with domestic issues and has not gone all out in its dreams to be the next super power. Home grown issues, the Hindu- Muslim tiff and border tensions has kept India from still getting on in full gear. However India enjoys excellent relations with USA the country which masters in world in foreign policy and trade relation. Thus India enjoys far better relations with the world than China does. Covid19 situation already has already put China on a back burner as now The world looks at ...
The economic turmoil due to the corona virus has signalled a new world order. With the corona virus countries are hardly being able to solve their own country problems let alone provide global leadership. America has been the world leader in Financial Services and planning in the world. IT provides the world the much needed leadership. This Financial leader also accounts for 1/4th of the world economy. With the corona virus pandemic the world has seen what China is capable of doing and it will show the world what it is capable of. The new leadership is still on its way to define itself. America the global leader has paved its way for becoming the major financial giant controlling most of the systems like SWIFT and others as most of the finances run through the American system, America chokes all the others who are non US allies. China however has managed to pave way for itself and its 1.5 billion users by enabling such systems and processes that it can not only block the...
The world goes through different cycles, every century there is a rise of a new super power also recession, global triumph or even the boom and bane of various economies are the factors which affect global world power. Most of the population in the east is under 40, they do not care much about the west or America leading the whole western world triumph. What the East or Europe are seeing right now are what President Trump has done as far as foreign Policy is concerned, or dismantling the pillars of multi literalism. Europe is also looking at American policies which deal with carious issues that Europe does not stand for, such as the refugee situation. They are now looking at America as nothing but an autocratic dominant economic power that only cares about domestic issues. People now feel that them and America belong to different worlds and that they somehow do not belong in this world of America. Though America has led the World in the past, however now it is no more l...
Hong Kong shares have tumbled more than 5 percent on global cues as well as its internal security laws on Hong kong, dealing a blow to the regions autonomy as Beijing seeks to stamp out widespread pro democracy protests challenging the leader Xi Jinping. With neither the protestors nor the Government backing down its tough times ahead for Hongkong.As the protests enter third month the Government nor the protestors are willing to back down. Violent means of the protestors and demonstrators are taking to the streets. Beijing can wither crush Hong Kong on its 10 trillion dollar financial capital or they can defy everything what their Government stands for. Under President Xi Jinping, China seems to have become tired of this charade.The re election in of a China sceptic president has convinced Chinas rules that the chances of a peaceful unification re vanishingly small. This is the most violent violation of One Country two systems rule, As china had ag...
After the pandemic ends the world is going to have a shift in powers. With hubs like Hong Kong and New York affected most with the virus and the trade wars already looming over the heads of most influential powers such as the US and China, there has been a complete shift in demand, consumption and supply chains. Even though it is extremely easy to move textile industries as well as garment manufacturing amongst other, it is still nt so easy to move semi conductor manufacturing immediately out of China as it involves a lot of key manufacturing and highly technical processes some of which are patented to use only in China. Hence it is important to understand to keep trade wars at bay and focus on regional economy. With the pandemic in order people are now thinking of migrating to their home countries as they have now lost faith in Governments and they feel ore secure in rural areas with less dense population and safety from corona virus. This will also create a p...
As the world has hit pandemic and all travel routes including trade routes are in a never seen before problematic situation, the new norm is going to be Make where you sell. Yes there are countries which are heavily dependent on trade routes such as Europe and America which are mainly import economies as also economies in Asia which are mainly export economies it has affected World trade in a manner never seen before. Even though America and Europe are more dependent on Asian economies, Asian economies are less dependent on America and China than they are on each other. As far as supply chain goes, they are always shifting and changing. Whether it is the coronavirus stricken world or not, It keeps changing and happens change globally throughout the world. However with the corona virus situation the World will be forced to look at interior regions of the world for trade routes. Make where you sell seems to be the new norm where countries are expecting the companies to make in ...