Geopolitics: follow the money?

Economics shapes geopolitical relations, notably with China. But many countries are increasingly rebalancing between economics & politics.

The past couple of weeks have seen contrasting approaches to managing commercial relations with China.  JPMorgan boss Jamie Dimon offered an apology for suggesting that the CCP may not outlast his firm; whereas the WTA responded forcefully to the apparent detention of Chinese tennis player Peng Shuai, now suspending its tournaments in China.

These different responses are partly shaped by different economic incentives. Risks to JPMorgan’s expansion into the Chinese market would be strongly negative for shareholder value; while the WTA’s values-based stance is supported by a likely more limited near-term financial impact due to Covid cancellations - although even so, it has acted more aggressively than other similarly-positioned sporting franchises.

Economic incentives also provide insight into geopolitical dynamics.  Unlike the Cold War, the big powers are deeply integrated into the global economy in terms of trade, investment, and technology.  Increasingly the economic and political …