Global Challenges

  • Differing strategies between China, Japan and South Korea challenge their FTA

    Complicated Geopolitics Challenge an Asian FTA

    The fifth round of the China–Japan–South Korea Free Trade Agreement (CJK FTA) negotiations concluded in Beijing on 5 September. The three countries hope the negotiations will finish in 2015, but this partly depends on the progress of the Trans-Pacific Partnership (TPP) negotiations.

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  • Falling oil prices could create the next financial crisis

    Oil, Junk Bonds, and Maybe the Next Financial Crisis

    The oil and gas boom in the United States was made possible by the extensive credit afforded to drillers. Not only has financing come from company shareholders and traditional banks, but hundreds of billions of dollars have also come from junk-bond investors looking for high returns. 

    Junk-bond debt in energy has reached $210 billion, which is about 16 percent of the $1.3 trillion junk-bond market. That is a dramatic rise from just 4 percent that energy debt represented 10 years ago. 

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  • The OPEC cartel is no longer the same heavyweight

    OPEC Forced to Change its Tactics

    OPEC is a cartel but it is a strange species in the sense that it only accounts for about 40% of oil production.  In the past exerted its influence by cutting production, as in 2008, and driving up prices.  Now it faces a different challenge.  New supply has come on the market, which threatens the cartel's position. 

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  • Important information for market participants on Black Friday

    OPEC's Meeting Results and Eurozone Inflation Numbers

    Two developments are important for investors to know about before the markets open on Friday to close the month.  

    First, and most importantly, the results of the OPEC meeting are the most negative outcome for prices.  OPEC, which over-produced in October, decided to rollover the existing quota 30 mln barrels a day.  We had noted that the timing of its next meeting would be an important tell.  It did not decide to schedule a meeting in the February-March period, when the seasonal demand slackened.  Instead, the next OPEC meeting is for June.  

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  • China's global leadership aspirations come into focus

    China Aims High

    This geopolitical summit season has consolidated ongoing trends in international affairs. A still-rising China with global leadership aspirations, a resurgent Russia bent on restoring its superpower status, and sclerosis and dysfunction in Western countries is likely to dominate international politics for at least the next 20 years. In fact, we might only be at the beginning in this long time span where seismic global power shifts are taking place.

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  • It was a good week for summits, and for bettering relationships

    Global Summits, Global Hopes

    For global governance watchers, this was the big week of the year. Between 7 November and 16 November, the world witnessed an APEC meeting in Yanqi Lake near Beijing complete with a bilateral China–Japan ‘breakthrough’ and a major US–China climate deal; an historic ASEAN and East Asia Summit held in Naypidaw, Myanmar; and a colourful G20 meeting in Brisbane, Australia.

    Notwithstanding the chorus of those announcing growing disorder, global order seems better off after these summits.

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  • Can the U.S. and China follow through on climate change?

    Factors Explaining China's Engagement on Climate Change

    The joint Chinese–American announcement of emissions targets brings the world a big step closer to meaningful post-2020 action on climate change. Barack Obama in his Brisbane speech made it clear where the two superpowers see things going: ‘If China and the United States can agree on this, then the world can agree on this’.

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  • Would a proposed response framework work in Asia for an Ebola outbreak?

    A Proposed Framework Could Help Asia Deal with an Ebola Outbreak

    Southeast Asia is no stranger to epidemics and is a hotspot for emerging disease threats. There have been serious economic and health-sector impacts from zoonoses including Nipah virus infections, SARS and highly pathogenic avian influenza (commonly known as bird flu). While these events catalysed some change in infectious disease policies within the region, many countries’ interest has since waned. Many governments, faced with numerous other pressing health priorities, have classified the threat of other emergencies as remote.

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  • Asia stands to benefit from new U.S.-China move on climate change

    U.S.-China Move on Climate Change Critical to Asia

    A set of reports by the Intergovernmental Panel on Climate Change (IPCC), the last of which was released on November 2, 2014, sets the scene for governments to renew their efforts on the issue through ambitious commitments for a comprehensive climate agreement in Paris in December 2015.

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  • Maritime security is the next phase of U.S.-Vietnam relations

    The Latest Step in Improving U.S.-Vietnam Relations

    The United States partially lifted its decades-old ban on weapons sales to Vietnam on 2 October 2014. This was one of the most significant steps in improving relations between the two former enemies since they normalised diplomatic ties nearly two decades ago. The US State Department made clear this decision related only to maritime surveillance systems and said the move was taken in response to improvements in Vietnam’s human rights environment.

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