Control Risks, the specialist global risk consultancy says that a US policy of China containment is set to emerge as a pillar of the new world order in 2019.
The US-China dynamic tops Control Risks’ list of Top Five Risks for business in 2019.
The forecast comes in Control Risks’ annual RiskMap, a political and security risk forecast for business leaders and policymakers across the world, published Tuesday.
Richard Fenning, CEO of Control Risks, said: “In 2019, what started as a trade war will ultimately harden into a more permanent stance. The confrontation on trade between the United States and China will become the defining geopolitical dynamic.
“This antagonistic relationship will complicate life not only for businesses in China and the US. Companies in a wide orbit around this stand-off will feel the political and economic impact,” added Fenning.
US-China trade rift foretells a new global order: The confrontation on trade between the United States and China will become the defining geopolitical dynamic of 2019. This antagonistic relationship will complicate life not only for businesses in China and the US. Companies in a wide orbit around this stand-off will feel the political and economic impact. In 2019, what started as a trade war will ultimately harden into a more permanent stance. A US “contain China” policy could become one of the pillars of a new global order.
The global data switchback ride: The stand-off between the three domains of data regulation will present a new level of risk for the international business in 2019. For China, data is something to be controlled; for the EU, data is something to be protected; the United States sees data as something to be commercialised. Brace for the challenge of collecting, storing and transferring data within and between these three domains against a backdrop of inconsistent enforcement and escalating cybersecurity threats.
American political gridlock : The vice of legislative gridlock will close on policymaking in Washington and throw the US into a period of pitched political uncertainty. Resurgent Democrats in the House of Representatives will seek to pin the President under an investigative lens. Pushback from a Republican Senate and White House will erase any hopes of consistency for business. Trade policy will remain unchanged; the pace of deregulation will slow. Foreign policy will remain unsettled and ambivalent in a global environment that requires clarity and resolve.
Extreme weather disruption : Some of 2019’s worst business disruptions will not come from terrorist attacks but from extreme weather and its consequences. From storms to floods to droughts and forest fires, the costs of interrupted production, distribution, sales and travel will skyrocket in 2019. Last year’s record for weather-related insurance claims will likely be surpassed. Extreme weather and all it brings have never been more significant as a business risk.
Multinationals becoming nationless: As globalised companies enter 2019, they risk – ironically – becoming nationless as nationalist politics continue to advance across the world. Formal and informal barriers are rising. Frictionless trade is beginning to rub, supply chains are starting to drag. Business leaders must re-calibrate and adapt to this new reality or global players will end up being played by a world in uncertain transition.