Global briefing: Higher for longer/ Fault lines/ Excess capacity/ ASEAN/ Global economic fragmentation
Insights on global economic and geopolitical developments
In this week’s global briefing:
1. Higher for longer: Even as the ECB prepares to cut, the experience of the US and other advanced economies shows the difficulties in reducing inflation.
2. Faultlines: The stepped-up Western diplomacy with China coincides with evident signs of geopolitical faultlines, notably US/Japan security arrangements.
3. Excess capacity: Janet Yellen’s advice to China on its growth model has had little impact, but countries are responding to Chinese exports of subsidised goods.
4. ASEAN: A recent survey documented shifting preferences in ASEAN regarding the US and China; China is gaining ground, despite concerns about its behaviour.
5. Fragmentation: New IMF analysis shows that trade and investment flows are geopolitically-shaped, with an important role for non-aligned ‘connector economies’.
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