• The world’s most powerful nations are once again in strategic competition over trade, technology, finance, resources and security. Over the next generation, a new macro-political paradigm is likely to have deep implications for global investment markets.

Trade war

Military conflicts and trade wars, with resulting restrictions on the import and export of goods, are forcing industries to rethink their supply chains. Reshoring, onshoring and automation are likely to be key trends as manufacturers seek to become increasingly self-sufficient, while new trading blocs could emerge between allies.

Tech war

A decoupling of technologies between democracies and autocratic regimes (principally the US and China) is taking place as countries vie for technological supremacy. Critical areas such as semiconductors and artificial intelligence are likely to be supported by government subsidies and research and development spending.

Finance war

Countries are using their financial systems for geopolitical advantage. Dollar hegemony has enabled the US to weaponise its financial system through the application of sanctions. Rival powers are seeking to reduce their dependency on the dollar and may seek to tie other countries into their own financial systems over time.

Resource competition

Countries are scrambling for control of critical resources (energy, metals, food and water) to ensure national security needs are met and to position domestic industries competitively for the future.

Security competition

More intense security rivalries and new arms races should support military spending and defence research and development. There is also an increasing trend towards greater military cooperation between democracies.

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These opinions should not be construed as investment or other advice and are subject to change. This material is for information purposes only. Any reference to a specific security, country or sector should not be construed as a recommendation to buy or sell investments in those countries or sectors. Please note that holdings and positioning are subject to change without notice.