US-China Rail Rivalry: Geopolitics Impacting Global Railway Infrastructure

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Introduction

A new report advises that companies across all sectors should pay constant attention to geopolitics, citing the intensifying rivalry between the US and China as a primary factor. The report, which is the fourth edition, highlights the use of economic weapons, such as sanctions and tariffs, in the ongoing competition between the two superpowers.

Main Content

US-China Rivalry

The report identifies the rise of China challenging the US’s status as the world’s sole superpower as a key reason for companies to focus on geopolitics. It states that there is “nowhere to hide” from the effects of this rivalry. The adversarial dynamic between the US and China, which increasingly dominates global affairs, must be considered in many political and business decisions to manage risk and grasp opportunities, notably in relation to non-aligned countries like India.

Reasons for Constant Attention

The report provides six reasons for companies to pay constant attention to geopolitics. These include the early stages of the US-China rivalry, powerful economic spillovers due to hyper-globalisation and hyper-digitalisation, the use of business and finance as economic weapons, the lack of room for compromise on the issues at stake, and the potential for “contagion and polycrisis.”

Impact of Geopolitical Tensions

The report notes that the re-election of Donald Trump as US President led to shocks, including the implementation of tariffs and the intensification of the US-China struggle in tech and critical minerals. The most serious threats to trade, supply chains, and investment materialize when geopolitical tensions escalate into armed conflicts, as seen in Ukraine and Gaza.

Specific Regional Risks

The report highlights potential conflicts in East Asia, particularly around Taiwan, and also on the Korean peninsula and in the South China Sea. Some sectors, including tech and energy (including green energy), are exceptionally “geopoliticised” and thus liable to be weaponized. The report also notes the entanglement of geopolitical tensions with the climate crisis and increasing migration, creating strong feedback loops.

Conclusion

The report emphasizes the need for companies to closely monitor geopolitical risks, particularly those stemming from the US-China rivalry and potential armed conflicts. It also points out the interconnectedness of geopolitical tensions with other global challenges.

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