Companies in all sectors ‘should pay constant attention to geopolitics’ – analysis

Core Insights - Geopolitical risk has become a central concern for businesses, moving from a historically remote issue to a daily consideration [1][2] - Companies across all sectors are advised to maintain constant vigilance regarding geopolitical developments, particularly due to the escalating US-China rivalry [2][3] Geopolitical Context - The US-China rivalry is characterized as a chronic and intensifying superpower competition, with economic tools like sanctions and tariffs being primary instruments [2][3] - The rivalry creates a scenario where companies have "nowhere to hide" from its impacts, necessitating a reevaluation of risk management strategies [2] Business Implications - The adversarial nature of the US-China relationship influences political and business decisions, especially concerning non-aligned countries such as India [3] - The report highlights that the rivalry is in its early stages, indicating a prolonged period of geopolitical tension with no foreseeable resolution [3] Economic Spillovers - There are significant economic spillovers resulting from hyper-globalization and hyper-digitalization, which amplify the effects of geopolitical tensions [3] - The use of economic measures as weapons has become prevalent, with little room for compromise on critical issues [3] Conflict Risks - The report identifies that the most severe threats to trade and investment arise when geopolitical tensions escalate into armed conflicts, as seen in various global hotspots [5] - Potential conflicts in East Asia, particularly around Taiwan, are highlighted as particularly concerning, with implications for global supply chains and investment [5] Sector-Specific Vulnerabilities - Certain sectors, especially technology and energy (including green energy), are described as being highly 'geopoliticised' and susceptible to being weaponized [6] - Geopolitical tensions are intertwined with other global challenges, such as the climate crisis and migration, creating complex feedback loops that affect business operations [6]