APEC, Pandas, and Tensions with China 

On 17 November, President Xi Jinping’s will visit the United States for the first time since 2017. He is attending the Asia-Pacific Economic Cooperation (APEC) summit which starts on November 11. The U.S.-China relationship has faced major problems over the last few years, and Xi’s visit is likely an attempt to improve things. President Xi will meet President Biden during the summit, though the details of what their meeting will focus on has not yet been shared. Ahead of Biden and Xi’s meeting Janet Yellen, America’s treasury secretary, will hold two days of talks with He Lifeng, China’s deputy prime minister in charge of economic policy. China’s top priority is its flailing economy and America’s semiconductor and technology export controls. However, the U.S. will likely focus on the anti-foreign business actions by the CCP that has limited American corporations wanting to operate there. In addition, the United States will focus on security issues as China has become increasingly aggressive in the South China Sea. 

Attempting to demonstrate Chinese displeasure with the United States, the CCP has decided to take back the giant pandas currently at the Smithsonian National Zoo in Washington, DC. Pandas were brought to the zoo in 1972 as part of China’s “panda diplomacy,” and they were always considered on loan. The CCP is also taking back pandas from Australia amid political concerns there. Australian and Chinese relations deteriorated significantly when the Australian government called for an investigation into the origins of Covid-19 back in 2020. Retaliating, China targeted Australia with punitive measures like those imposed against Japan, South Korea, Lithuania. However, Australia was able to effectively diversify its exports, and China backed down from their coercive approach. Tensions between the two countries are currently easing, but the China-Australia relationship will impact the balance of power in the Indo-Pacific. 

The U.S.-China relationship over the coming years will have significant implications for security and business. Analysts should follow the discussions between Xi and Biden at the APEC summit because it will be an indicator of how the U.S. and China will approach their relationship over the remainder of Biden’s term.  

Gallup leaves China  

The consultancy Gallup has decided to leave China. It had been operating there since 1993. Though Gallup is only one company, the nature of their business indicates that President Xi’s authoritarian reforms are likely to make it more difficult for businesses operating in the country. Gallup has faced extreme difficulties in polling the population because of the strict rules around public opinion surveys. This further indicates that China is likely to be even more closed off in the medium term, and corporations will need to understand the new risks that they will be facing.   

KPMG CEO Survey 

The consulting company KPMG has released survey data on CEOs attitudes towards risks, finding that geopolitics and political uncertainty rank as the highest risks despite not being a top five risk in 2022. Interestingly, even though they ranked geopolitics and political uncertainty as their top risk, 61% of CEOs surveyed said they would still take a public stance on a controversial political issue, indicating that they believe it is important to appeal to the political sensibilities of their customers. (See here for former IF reporting and analysis on the subject.) Goldman Sacks has also started venturing into geopolitical risk analysis because of the desperate need for corporations to understand the complexities in which they operate.   

TikTok and Disinformation

The European Union has unequivocally told TikTok that the company must “spare no effort” in countering disinformation on the platform. In October, the EU’s industry chief told TikTok that they were required to inform the organization about the company’s crisis response measures and how they intend to protect elections. The EU is operating under the new powers of the Digital services Act. This is an indicator of two important trends. First, this is the latest step by the EU in attempting to regulate and control technology companies, and the EU will become increasingly aggressive in these efforts over the medium term. Second, as the U.S. approaches the next presidential election, TikTok is likely to be the primary mechanism of spreading disinformation rather than Facebook or X (Twitter). 

Protests in Panama over copper mine 

Panama is currently experiencing mass protests (though the protests started in August) over the government’s decision to grant a new 20-year license to the Canadian firm First Quantum Minerals. First Quantum extracts copper in Panama, and the Central American country accounts for 1.5% of the world’s copper output, which is a critical component in electric car batteries. Global demand for copper is highly likely to increase because of the focus on green technology. Protesters are concerned over the environmental impact of mining, and they are disrupting the country. This highlights a fundamental business concern because Latin America has a significant amount of important minerals, but if locals prioritize environmental concerns, then businesses will have limited access to those minerals have to increasingly rely on China.  

Cyber Defence Research  

Microsoft announced its Secure Future Initiative because Russia’s “hybrid war” demonstrates that the fifth domain relates to the defense of technology corporations. According to the company, "The war in Ukraine has demonstrated the tech sector’s ability to develop cybersecurity defenses that are stronger than advanced offensive threats.” Microsoft argues that Ukraine’s successes in cyber defense shows the importance and utility of working with private corporations to protect digital infrastructure. Technology corporations should especially take note of the cyber conflict between Russia and Ukraine, and Microsoft’s research into the subject will help them bolster their own security.  

Antisemitism  

France, Germany, the United States, and other western countries have seen a significant increase in antisemitism since the beginning of the Israel-Hamas war in early October. At Cornell University, a student even threated to stab and slit the throats of any Jewish men on the campus and to behead Jewish babies. In Dagestan, a group of men stormed an airport to try and capture/kill Jews on a flight from Israel. Though there has not been a major antisemitic attack, the increase in incidents indicates that companies should assess the risks to Jewish employees and any perceptions of sympathy with Israel that would lead to an attack. 

Japanese yen weakens against other currencies 

Japan’s currency is experiencing a decline against most major currencies, including the U.S. dollar, Singaporean dollar, Australian dollar, won, and euro. The yen even briefly hit 161 against the euro, which is the weakest the currency has been since 2008, and it was the lowest it has been against the Singaporean dollar since 1985. More worryingly, the yen has declined against the U.S. dollar by 30% since May 2023 because of the higher interest rates set by the Federal Reserve. It continues to remain unclear if the Bank of Japan will raise interest rates to help tame inflation, though keeping the yen weaker might (though unlikely) help with domestic demand. Because of the flailing economic issues, support for Prime Minister Fumio Kishida’s cabinet has declined to 28.3%. Japan is extremely unlikely to experience political instability, but this is an indicator that Kishida’s economic reforms will struggle to make it through the policy making process.