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Mission Grey Daily Brief - September 24, 2024

Summary of the Global Situation for Businesses and Investors

As global leaders gather at the United Nations, pressure mounts on President Biden to loosen restrictions on Ukraine's use of weapons. Meanwhile, China amplifies Russian war propaganda, influencing public opinion worldwide. In Britain, Prime Minister Keir Starmer faces challenges as he restricts payments for retirees. Lastly, Sri Lanka's new president, Anura Kumara Dissanayake, takes office, marking a potential shift in the country's foreign relations.

Ukraine Seeks More Weapons from the West

As the war in Ukraine enters its third year, President Volodymyr Zelensky is pushing for permission from President Biden to use longer-range weapons supplied by NATO to strike deeper inside Russia. This request comes as Ukraine slowly loses ground to mass Russian assaults in the Donbas region, and as Russian strikes target civilian infrastructure ahead of the approaching winter.

European lawmakers are urging EU member states to lift restrictions on Ukraine's use of Western weapons, arguing that the current limitations hinder Ukraine's ability to defend itself under international law. However, President Biden has been reluctant to escalate the conflict and risk a direct confrontation with Russia, as Putin already blames NATO for the war and has made veiled threats of nuclear retaliation.

China Amplifies Russian War Propaganda

China has emerged as a key player in the information war surrounding the Russia-Ukraine conflict. Through media strategies, China has shifted blame for the war from Russia to NATO and the US, even though Ukraine is not a NATO member. This alignment with Russian narratives stems from a strategic agreement between the two countries, creating an "echo chamber" effect.

China's primary objective appears to be criticizing Western countries, particularly the US and NATO, rather than showing genuine concern for Ukraine. Chinese media has drawn false distinctions between the Ukrainian government and its people, echoing Russian propaganda. This collaboration extends beyond the war, with Chinese media amplifying Russian narratives about Taiwan.

Britain's Prime Minister Faces Challenges

Britain's Prime Minister, Keir Starmer, is facing challenges as his Labour Party, which won a parliamentary majority in the July election with only 34% of the vote, takes a tough stance on economic issues. Starmer has restricted payments that help retirees with heating costs and has warned of impending budget cuts, causing concern among his allies and the British public.

As Starmer prepares to address his party's annual conference, analysts expect him to shift his tone and emphasize how the government's early harsh measures will lead to long-term benefits for Britain. Starmer is likely to highlight the legacy of issues he inherited and pivot to discussing structural changes that will strengthen the country.

Sri Lanka's New President Takes Office

Sri Lanka's new president, Anura Kumara Dissanayake (AKD), has been sworn in, marking a potential shift in the country's foreign relations. AKD, a 55-year-old Marxist leader, is known for his anti-India stance and proximity to China. His election comes after mass protests in 2022 that ousted the previous president, Gotabaya Rajapaksa, and his clan from power.

AKD campaigned as the candidate of "change," promising economic relief and an end to corruption. He has pledged to renegotiate the terms of the IMF bailout and abolish the powerful executive presidency. With China already leasing the strategic Hambantota Port, AKD's election poses a challenge to India's interests in the region.

Recommendations for Businesses and Investors

  • Ukraine-Russia Conflict: The conflict's impact on energy prices and supply chains should be closely monitored, especially with winter approaching. Businesses should assess their exposure to the region and consider supply chain diversification.

  • China's Propaganda Machine: Businesses should be cautious of operating in countries that heavily censor information and manipulate public opinion, such as China. Investing in countries with free media and strong democratic institutions reduces the risk of unexpected shifts in public sentiment and government policies.

  • Britain's Political Landscape: Businesses should consider how Starmer's potential long-term structural changes could impact their operations in Britain. While the current government's tough economic stance may cause short-term challenges, the focus on structural reforms could lead to a more stable and predictable business environment in the long term.

  • Sri Lanka's Foreign Relations: Companies investing in Sri Lanka should monitor the new president's foreign policy decisions, particularly regarding relations with China and India. A shift towards China could increase the country's debt burden and impact its ability to secure favorable trade deals with other nations.

Stay informed and stay resilient. Mission Grey is here to help you navigate the complex global landscape.


Further Reading:

As U.N. Meets, Pressure Mounts on Biden to Loosen Up on Arms for Ukraine - The New York Times

As Vietnam’s President Visits UN, ‘Carbon Neutrality’ Vanishes at Home - Asia Sentinel

At Least 16 Injured In Russian Air Strikes On Ukraine's Zaporizhzhya - Radio Free Europe / Radio Liberty

Britain's far right is hoping to strengthen its national presence - Le Monde

Britain’s Prime Minister, Bruised by a Dispute Over Freebies, Badly Needs a Reset - The New York Times

Chinese media amplifies Russia’s war propaganda, Taiwan watches warily - Euromaidan Press

Curfew lifted, change arrives: A firsthand view of Sri Lanka’s historic election - The Interpreter

Envisioning a better peace in Ukraine - The Strategist

Europe at odds with public on escalating war in Ukraine - Responsible Statecraft

Is Sri Lanka’s new president Anura Kumara Dissanayake bad news for India? - Firstpost

Themes around the World:

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Sanctions, Export Controls, and Geopolitics

The US continues to leverage sanctions and export controls as tools of foreign policy, targeting adversaries and sensitive sectors. These measures create compliance challenges and supply chain risks for global firms, especially in technology, defense, and critical materials.

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Environmental Governance and ESG Pressures

Environmental and labor issues, particularly in mining and palm oil, have led to regulatory crackdowns, including permit revocations for violators. International investors face growing ESG expectations, and Indonesia’s ability to enforce standards will shape its reputation and access to sustainable finance.

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America First and Investment Nationalism

The US is pursuing an 'America First' agenda, leveraging tariffs and investment controls to promote domestic industries and national security. This approach complicates relations with allies, influences defense procurement, and increases compliance burdens for multinational firms.

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Mining Sector Emerges as Strategic Pillar

Saudi Arabia is investing $110 billion to develop its $2.5 trillion mineral reserves, including rare earths, gold, and copper. The Kingdom seeks to become a regional processing hub, partnering with US firms and reducing global supply chain dependence on China for critical minerals.

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Investment Uncertainty and Supply Chain Realignment

Rising trade tensions and unpredictable US policy have slowed German investment flows into the US and prompted companies to reconsider supply chain locations. Prolonged uncertainty could accelerate regionalization, delay capital projects, and weaken Germany’s manufacturing base, with long-term implications for competitiveness and global market access.

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Domestic Reforms and Infrastructure Investment

Canada is fast-tracking $1 trillion in investments across energy, AI, critical minerals, and trade corridors, alongside tax reforms and interprovincial trade liberalization. These initiatives aim to boost competitiveness and supply chain resilience, presenting significant opportunities for global investors.

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EU Regulatory Pressure and Traceability

France, under the EU Battery Regulation, must ensure traceability and certified recycling of EV batteries. The upcoming EU Battery Passport system will institutionalize tracking, impacting cross-border trade, compliance costs, and supply chain transparency for international operators.

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Deforestation-linked trade compliance pressure

EU deforestation rules and tighter buyer due diligence raise traceability demands for soy, beef, coffee and wood supply chains. A Brazilian audit flagged irregularities in soybean biodiesel certification, heightening reputational and market-access risks for exporters and downstream multinationals.

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Critical Minerals And Semiconductor Supply Chains

Vietnam is deepening partnerships with the EU and other global actors to develop its rare earths, tungsten, and semiconductor sectors. These efforts aim to diversify supply chains, reduce dependence on China, and position Vietnam as a key node in global technology manufacturing.

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US Investment Climate and Workforce Scrutiny

High-profile enforcement actions, such as the ICE raid on a Korean battery plant, highlight increased scrutiny of foreign investment and workforce compliance in the US. This environment raises operational risks for international investors and may affect FDI inflows and project execution timelines.

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Foreign Investment Decline and Decoupling

Foreign direct investment in China fell 9.5% in 2025, with many investors shifting to emerging markets due to geopolitical tensions, economic slowdown, and concerns over regulatory unpredictability. This trend challenges China’s long-term growth and integration with global capital markets.

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Rial collapse, high inflation

The rial’s rapid depreciation to around 1.5–1.6 million per USD and inflation near 50% are destabilizing pricing, wages, and import capacity. Multiple exchange rates and subsidy changes amplify settlement risk, impair demand forecasting, and complicate repatriation and local sourcing.

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Massive Public Investment Program 2026

Turkey’s 2026 Investment Program allocates 1.92 trillion TRY to 13,887 projects, prioritizing infrastructure, earthquake resilience, energy, and logistics. This large-scale public spending aims to boost economic growth and supply chain capacity, but also tests fiscal discipline.

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Escalating Geopolitical and Security Risks

Ongoing conflict in Ukraine, US-Russia tensions, and new US actions against Russian assets have heightened geopolitical risks. These developments threaten supply chain stability, raise compliance costs, and increase the risk of asset seizures or operational disruptions for international businesses in Russia and its partner states.

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Currency Shift Reduces Dollar Exposure

Russia now conducts nearly all trade with China and India in national currencies, minimizing reliance on the dollar and euro. This currency shift alters payment risk profiles, complicates cross-border transactions for global firms, and signals a long-term pivot away from Western financial systems.

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Defense Buildup and Regional Alliances

Japan is doubling defense spending and deepening alliances with the US, Australia, and others to counter China. Expanded military capabilities and joint industrial policies are reshaping the Indo-Pacific security architecture, with direct implications for foreign investment and supply chains.

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US Foreign Investment Scrutiny Rises

Foreign investment in the US faces heightened scrutiny, particularly in strategic sectors and from Chinese investors. Regulatory barriers and national security reviews are increasingly shaping cross-border M&A, technology transfers, and capital flows.

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High Unemployment and Labor Market Shifts

Finland’s unemployment rate has reached 10.6%, the highest in the EU, driven by weak domestic demand and structural changes. While tech and green sectors are hiring, traditional industries face layoffs, affecting consumer demand and workforce availability for international investors.

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Labor Market and Immigration Enforcement

Intensified immigration raids, border controls, and restrictive labor policies have disrupted workforce availability, dampened consumer demand in immigrant communities, and created compliance challenges for businesses, particularly in sectors reliant on foreign labor and diverse talent pools.

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Escalating U.S. Secondary Tariffs

The United States has imposed a sweeping 25% tariff on any country trading with Iran, sharply escalating secondary sanctions. This move threatens to disrupt global supply chains, deter foreign investment, and force international businesses to reassess exposure to both Iran and U.S. markets.

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Supply Chain Diversification and Resilience

India is positioning itself as an alternative to China for global supply chains, leveraging policy incentives, infrastructure upgrades, and trade agreements. However, external shocks—such as US tariffs and currency volatility—remain key risks for supply chain stability and export growth.

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Energy security and LNG procurement

Taiwan’s import-dependent power system and plans to increase LNG purchases, including from the US, heighten focus on fuel-price volatility and shipping risk. Industrial users should expect continued sensitivity to outages, grid upgrades, and policy shifts affecting electricity costs.

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Digitalization and Technology Innovation Surge

Rapid adoption of digital tools, automation, and BIM is transforming modular construction in Germany. These advances are improving efficiency, quality control, and lifecycle management, while attracting foreign investment and enabling new business models in the sector.

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Currency Volatility and Fiscal Reforms

The South African rand has shown recent strength, supported by improved fiscal management, credit rating upgrades, and inflation control. However, volatility remains a risk, influenced by global economic shifts, policy changes, and domestic fiscal vulnerabilities, affecting import costs and investment planning.

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Energy Sector Liberalization and Investment

Mexico is negotiating with global oil majors like Chevron and BP to attract private capital for offshore projects, aiming to halt declining output. The evolving regulatory framework offers opportunities but also poses risks due to ongoing policy shifts and Pemex’s dominant state role.

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Massive Infrastructure Reconstruction Drive

Ukraine’s large-scale reconstruction, backed by EU and international finance, is creating significant business opportunities in transport, energy, and urban development. However, risks from ongoing conflict and corruption concerns complicate project execution and investment returns.

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Green Transition and E-Mobility Expansion

Mexico’s electric vehicle market is set to triple by 2032, supported by government incentives, urban pollution concerns, and major automaker investments. However, limited charging infrastructure and high upfront costs remain barriers, while sustainability goals reshape automotive and energy sectors.

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EU-UK Relations and Market Access

The UK government is exploring closer alignment with the EU single market to offset Brexit-related losses. Improved EU ties could boost UK GDP and productivity, but ongoing trade tensions and regulatory divergence continue to hamper seamless access for UK firms to the EU market.

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Digitalization and Regulatory Streamlining Initiatives

The launch of an electronic licensing platform offering 460 services from 41 government entities marks a major step in improving Egypt’s business environment. Faster, more transparent licensing supports ease of doing business and facilitates foreign investment and business expansion.

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Shifting Global Trade Alliances

US unpredictability has accelerated trade realignments, with the EU and India finalizing deals and Germany increasing investment in China. Major economies are hedging against US volatility by building alternative trade frameworks, reducing reliance on American markets and supply chains.

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Tourism recovery with demand mix risks

Tourism is near recovery: Phuket passengers rebounded to 96.4% of 2019 and arrivals Jan 1–25 reached 2.63m (≈THB129.9bn). However, China remains volatile and room-rate power is limited, affecting retail, hospitality capex, labor demand, and services supply chains.

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Energy Sector Reform and Investment

Mexico is opening its energy sector to private and foreign investment through mixed contracts and partnerships, especially in oil and power generation. However, Pemex’s financial instability and regulatory uncertainty persist, impacting energy costs, supply reliability, and long-term investment decisions.

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Shifting Global Trade Power Dynamics

China’s record $1.19 trillion trade surplus in 2025, driven by exports to Africa, Southeast Asia, and Latin America, signals a shift in global trade power. The US faces challenges to its traditional dominance, impacting investment strategies and market access for multinationals.

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Currency Volatility and Capital Outflow Risks

The Korean won’s depreciation to levels not seen since the 2008 crisis, combined with a $350 billion US investment commitment, heightens capital outflow risks. These currency pressures complicate cross-border investments, impact foreign exchange costs, and add uncertainty to multinational business planning.

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Transport infrastructure funding shift

Une loi-cadre transports vise 1,5 Md€ annuels supplémentaires pour régénérer le rail (objectif 4,5 Md€/an en 2028) et recourt davantage aux PPP. Discussions sur hausse/ indexation des tarifs et recettes autoroutières accroissent l’incertitude coûts logistiques et mobilité salariés.

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Investment liberalization and market access

Saudi investment is surging, with total investment topping SR1.5 trillion ($400bn) in 2025 and FDI stock reaching SR1.05 trillion ($280bn) by Q3 2025. Capital markets opened wider from Feb. 1, reshaping entry, financing, and partnership strategies.