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
Britain's far right is hoping to strengthen its national presence - Le Monde
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:
Information Blackouts and Operational Challenges
Authorities have imposed extended internet and communication shutdowns, impeding business operations, financial transactions, and supply chain visibility. These blackouts complicate crisis management, due diligence, and compliance monitoring for international firms.
London’s Fragile Business Confidence
London remains the UK’s economic engine, but business confidence is undermined by regulatory uncertainty, high costs, and policy instability. International trade, investment, and infrastructure projects continue, yet firms demand long-term policy clarity to support growth and global competitiveness.
Heightened Geopolitical and Security Risks
The risk of military escalation is acute, with the US considering strikes and Iran warning of readiness for conflict. Regional instability, including weakened alliances and ongoing tensions with Israel and the US, increases operational risk for businesses and investors in the region.
USMCA Uncertainty and Tariff Risks
Ongoing US-Canada trade tensions, including Supreme Court decisions and USMCA renegotiations, create volatility for Canadian exporters. Tariff threats on key sectors like furniture and lumber impact supply chains, investment planning, and cross-border business operations.
State Intervention and Subsidy Expansion
The German government, with EU approval, is expanding subsidies for new gas-fired power plants and industrial electricity costs. While aimed at supporting industry, these interventions raise concerns about long-term competitiveness, fiscal sustainability, and potential market distortions within the EU.
US-China Strategic Rivalry Intensifies
Escalating trade tensions, technology export controls, and counter-sanctions between the US and China are reshaping global supply chains, investment flows, and regulatory environments. The Taiwan issue and legal-diplomatic confrontations further heighten risks for multinational firms operating in both markets.
Infrastructure Safety and Operational Risks
Recent fatal crane accidents in major infrastructure projects highlight persistent safety and regulatory enforcement issues. Such incidents can delay project delivery, raise insurance and compliance costs, and affect Thailand’s reputation as a reliable investment destination.
Shifting Energy Trade Flows to Asia
India and Turkey have reduced Russian fossil fuel imports due to sanctions, while China has increased purchases, benefiting from steep discounts. These shifts are altering global supply chains, with China now accounting for nearly half of Russia’s fossil fuel export revenues, impacting trade patterns and pricing.
Trade Policy Uncertainty and Export Risks
Geopolitical tensions, sanctions on Russia, and trade disputes with the US have weakened external demand for German goods. Exporters face ongoing uncertainty, especially in automotive and machinery sectors, complicating supply chain planning and global market strategies.
AI-Driven Semiconductor Expansion
TSMC’s 35% profit surge in Q4 2025, driven by AI chip demand, underpins massive capital expenditures of up to $56 billion in 2026. The AI megatrend is fueling sustained growth, with advanced node technologies (3nm, 2nm) dominating revenue and global market leadership.
EU-Mercosur Trade Deal Implementation
The EU-Mercosur free trade agreement, signed in January 2026, will eliminate tariffs on over 90% of bilateral trade, opening a market of 700 million people. This landmark deal is expected to reshape Brazil’s export profile, boost agribusiness, and attract investment, but faces ratification hurdles and opposition from European farmers and environmental groups.
Geopolitical Tensions with US and China
President Macron’s criticism of US sanctions and China’s aggressive trade practices underscores France’s drive for strategic autonomy and regulatory sovereignty. These tensions heighten risks for multinationals in tech, energy, and advanced manufacturing, with potential for retaliatory measures and regulatory divergence.
Defense Sector Expansion and Joint Production
Ukraine’s defense industry is set for expansion, with joint production agreements and technology transfers from European partners. This creates new investment and partnership opportunities, but also requires careful risk assessment due to ongoing conflict and regulatory changes.
Labour Market Tensions and Wage Pressures
Persistent high unemployment, wage negotiations, and potential for labour unrest present ongoing risks. While recent data shows slight improvements in employment, structural barriers and the threat of strikes in key sectors like mining and manufacturing remain a concern for supply chain continuity.
New Capital City (IKN) Investment Momentum
The IKN project continues to attract new investors, with recent agreements covering culinary, commercial, and office developments. This signals growing business confidence in IKN’s role as a future economic hub, with implications for real estate, infrastructure, and supporting industries.
Supply Chain Shifts and Regional Integration
Vietnam’s strategic location and deep integration into RCEP and CPTPP make it a preferred destination for supply chain relocation, especially from China. This strengthens its role in Asian manufacturing but increases exposure to regional competition and geopolitical shifts.
Regulatory and Fiscal Policy Evolution
Ongoing reforms in GST, tax policy, and fiscal decentralization are shaping India’s investment climate. States are seeking greater fiscal autonomy and infrastructure funding, while regulatory changes continue to impact business operations, compliance, and long-term strategic planning.
Downstream Bauxite Industrialization Push
Indonesia is entering a crucial phase of bauxite downstream processing, aiming to strengthen domestic alumina and aluminium industries. This shift reduces raw ore exports, supports supply chain resilience, and positions Indonesia as a key global supplier for multiple sectors.
Surge in M&A and Privatization Activity
Mergers and acquisitions doubled in 2025, reaching $11.8 billion, with foreign investors—especially from Germany and France—leading 55 deals. Privatizations, notably in energy and infrastructure, offer new entry points and competitive dynamics for global investors.
Belt and Road Initiative Expansion
China signed a record $213 billion in new Belt and Road deals in 2025, focusing on energy, mining, and infrastructure in Africa and Central Asia. This expansion strengthens China’s global economic footprint but raises debt and dependency concerns in partner countries.
Japan’s Military Buildup Spurs Controls
Japan’s increased defense spending and security policy reforms have prompted China’s export restrictions, raising business risks in sectors linked to defense and advanced manufacturing, and signaling a more volatile regulatory environment for foreign investors.
Gaza Conflict Reshapes Regional Stability
The ongoing Gaza conflict and evolving ceasefire arrangements have heightened regional instability, disrupted trade routes, and increased security risks. International businesses face heightened uncertainty, with supply chains, cross-border operations, and investment strategies all affected by the volatile security environment and shifting political alliances.
Conditional Progress Toward EU Integration
Ukraine’s EU accession talks are advancing, with Cyprus prioritizing the process during its EU Council presidency. Progress depends on sustained reforms, anti-corruption measures, and political stability. EU membership remains a strategic goal, shaping regulatory alignment and long-term market access for international business.
Arctic Geopolitics and Resource Competition
Greenland’s vast mineral reserves, especially rare earths, are increasingly accessible due to climate change, attracting global interest. Strategic competition among the US, EU, Russia, and China over Arctic resources and routes directly impacts trade, investment, and supply chain strategies.
Cautious Fiscal Policy Amid Oil Volatility
Saudi Arabia’s 2026 borrowing plan targets $58 billion in financing, reflecting a 56% rise from 2025. Despite lower oil prices, the government maintains expansionary spending and fiscal discipline, seeking diversified funding sources to support growth while protecting debt sustainability and credit ratings.
Trade Policy Shift to Strategic Diversification
India is moving from broad liberalization to selective, strategic trade engagement. Recent agreements with the UK, UAE, and others, plus supply-chain diversification, aim to build resilience amid global protectionism and realign India’s role in global value chains.
State-Level Competition for Investment
States like Andhra Pradesh, Odisha, and Maharashtra are aggressively attracting investment, with Andhra Pradesh capturing 25.3% of proposed investments in FY26. This regional competition, driven by policy clarity and infrastructure, is reshaping India’s industrial geography and offering new opportunities for international investors.
Supply Chain Security Amid Geopolitical Tensions
Rising China-Japan tensions and US-China rivalry are driving South Korea to strengthen supply chain resilience. Export controls on dual-use goods and rare earths, particularly by China, pose risks to Korean high-tech manufacturing and regional supply chain stability.
Stricter Environmental and Import Regulations
New regulations require burn-free certification for feed corn and wheat imports, aligning with global sustainability standards. These rules increase compliance costs for importers and may disrupt agricultural supply chains, especially for animal feed and food processing sectors.
Government Crackdown and Human Rights Risks
Iran’s leadership has signaled a tougher crackdown on dissent, deploying security forces and restricting media. This increases reputational and compliance risks for foreign firms, especially regarding human rights and ethical standards.
Rising Chinese Trade Influence
South Africa’s trade deficit with China is widening, driven by surging imports of Chinese vehicles and manufactured goods. This trend threatens local industries and complicates trade balances, requiring strategic adaptation by businesses to remain competitive in key sectors.
China’s Growing Role and Risks
China remains Brazil’s top export destination, with purchases rising 6% in 2025 to US$100 billion, mainly in soy, beef, and sugar. However, recent Chinese quotas on beef imports and increased use of trade defense instruments pose new risks for Brazilian supply chains.
US Retreats from Global Climate Leadership
The US withdrawal from the UNFCCC and 65 other international bodies marks a strategic shift away from multilateral climate action. This move risks isolating US firms, ceding clean energy leadership to China, and complicating compliance for multinationals operating across jurisdictions.
Strategic US-Taiwan Technology Partnership
The agreement establishes a high-tech strategic partnership, with joint industrial parks and reciprocal investment in semiconductors, AI, defense, and biotech. This deepens bilateral ties and positions Taiwan as a critical partner in US-led technology and innovation ecosystems.
Domestic Consumption and Innovation Push
China is prioritizing domestic demand and innovation-led growth, launching initiatives to boost consumption and foster high-tech sectors. This shift aims to reduce reliance on exports, presenting new opportunities for global firms in consumer goods, services, and advanced manufacturing.
Saudi-UAE Geopolitical Rivalry Escalates
A sharp rift with the UAE over Yemen has led to direct military action, the dissolution of the UAE-backed STC, and new Saudi alliances with Egypt and Somalia. This rivalry increases regional uncertainty, impacts Red Sea security, and complicates business risk assessments for international operations.