Mission Grey Daily Brief - November 13, 2024
Summary of the Global Situation for Businesses and Investors
The global situation is currently dominated by Donald Trump's return to the White House, which has significant implications for global trade and supply chains. Taiwan's tech industry is moving to fortify its supply chain strategy in anticipation of new global tariffs, while Chinese firms are showing increased interest in relocating to Malaysia and other Southeast Asian countries to avoid the impact of potential tariffs. Meanwhile, China's leader Xi Jinping is heading to South America for a meeting of Asia-Pacific Economic Cooperation (APEC) leaders, overshadowed by fears of renewed global trade tensions. In other news, the US has struck Iranian-backed targets in Syria, and thousands in Serbia are demanding the PM's resignation after a deadly roof collapse.
Trump's Return and Global Trade Tensions
The imminent return of Donald Trump to the White House has prompted Taiwan's tech industry to fortify its supply chain strategy in anticipation of new global tariffs. At a November 12 industry forum, experts outlined a new "two enhancements, two reductions" doctrine to navigate the approaching trade turbulence that could impact manufacturing bases from Mexico to Vietnam. This doctrine involves enhancing integration and control while reducing centralization and dependency.
Sharon Wu, division head at the Industry, Science, and Technology International Strategy Center under the Industrial Technology Research Institute (ITRI), warned that Trump's return signals just one aspect of evolving global dynamics. She emphasized that supply chains must become more flexible and resilient to shield against multiple threats, including supply chain disruption risks and the erosion of low-cost manufacturing advantages.
Chinese Firms Relocating to Southeast Asia
Chinese firms are showing increased interest in relocating to Malaysia and other Southeast Asian countries like Thailand and Vietnam to avoid the impact of potential tariffs. This is driven by Trump's campaign pledge to impose 60% tariffs on Chinese goods. During his first term, Trump's "America First" policy sparked a trade conflict with China, with tariffs imposed on US$550 billion of Chinese products.
Southeast Asian nations are preparing for more turbulence after Trump announced a blanket tariff regime of 10% on all imports. In Thailand, the WHA Group CEO Jareeporn Jarukornsakul has reported a surge in inquiries from Chinese customers, prompting the company to expand its Chinese-speaking sales force. Similarly, Malaysian real estate sellers are experiencing an uptick in interest in business relocation as Trump's return may bring a surge in Chinese companies looking to move supply chains to Southeast Asia.
US Strikes Iranian-Backed Targets in Syria
The US has struck Iranian-backed targets in Syria, including an Iran-backed military facility and militia targets. This comes amid ongoing tensions between Ukraine and Russia, with explosions in Kyiv as Putin's forces launch a missile attack. The US has also accused Hamas of complicity in Gaza 'genocide', while a UN official has stated that Gaza conditions are unfit for human survival.
Serbia's Deadly Roof Collapse and Political Fallout
Thousands in Serbia are demanding the PM's resignation after a deadly roof collapse at a shopping centre in the city of Kragujevac. The roof collapse killed at least 14 people and injured dozens more. The PM has been accused of negligence and corruption, with protesters calling for his resignation and an end to corruption. The PM has denied any wrongdoing and has vowed to continue his work.
This political turmoil in Serbia could have implications for businesses and investors, particularly those with operations or interests in the country. It is essential to monitor the situation closely and assess any potential risks or opportunities that may arise.
Further Reading:
Amid unease over Trump 2.0, Xi Jinping heads to South America; Peru first stop - Firstpost
Explosions in Kyiv after missile attack – Ukraine war latest - The Independent
Live: US strikes Iran-backed military facility in Syria - The National
Taiwan supply chains brace for Trump's upcoming wave of global tariff - DIGITIMES
Thousands in Serbia demand PM's resignation after deadly roof collapse - Lufkin Daily News
US military strikes Iranian-backed militia targets in Syria - Toronto Star
Ukraine-Russia war latest: 50,000 of Putin’s forces in Kursk, Kyiv says - The Independent
With Trump’s victory, Malaysia sees more interest from Chinese firms to relocate - This Week In Asia
Themes around the World:
Surge in Foreign Direct Investment
Brazil experienced a 67% increase in foreign direct investment (FDI) in new productive projects from 2022 to May 2025, reaching US$37 billion. This growth outpaces the global average and is driven by Brazil's geopolitical neutrality and diversification of investment sources, including Asia and the Middle East. Energy projects dominate, attracting nearly half of FDI, signaling robust sectoral opportunities.
Foreign Investment Surge and Digital Transformation
Germany has witnessed a dramatic increase in foreign-owned companies, rising over 600% from 2015 to 2025. This influx, led by Luxembourg, the UK, China, and the US, reflects a structural shift towards global integration and digital transformation. Foreign capital is driving growth in sectors like manufacturing, logistics, and cloud infrastructure, reshaping Germany’s economic landscape and investment patterns.
Currency Market Volatility and Tax Policy Effects
Aggressive tax hikes in France and the UK have triggered capital flight towards USD assets, fueling a strong US dollar rally. This currency shift impacts global trade competitiveness, investment flows, and financial markets, requiring multinational businesses to adapt currency risk management and investment strategies accordingly.
High-Tech and Semiconductor Industry Leadership
Israel's semiconductor sector, characterized by a unique 'Two-Engine Paradox' of startups and multinational R&D hubs, remains a global innovation leader. With venture capital investment ratios thrice the national average, the sector underpins AI and computing infrastructure worldwide. This technological prowess drives export growth, attracts foreign direct investment, and positions Israel as a critical node in global supply chains.
Banking Sector Resilience
Egypt's banking sector demonstrated robust financial health in FY 2024 and Q1 2025, with capital adequacy at 18.3% and liquidity ratios exceeding regulatory thresholds. This stability, supported by strong household deposits and foreign currency liquidity, underpins credit supply to the economy, bolsters investor confidence, and mitigates systemic risks, facilitating sustained economic growth and financial intermediation.
Australia-US-China Strategic Dynamics
Australia faces complex strategic pressures balancing its economic ties with China and security alliance with the US. Rising public concern over US interference and nuanced views on China shape policy and investment decisions. The AUKUS pact and defense spending reflect heightened regional security priorities, impacting trade relations and geopolitical risk assessments.
Critical Minerals Sector Vulnerabilities
India’s critical minerals sector is highly import-dependent with limited domestic reserves and underdeveloped processing capabilities, particularly reliant on China. Strategic partnerships in the Global South and enhanced value chain development are essential to secure upstream access. This sector’s vulnerabilities pose risks to India’s net-zero ambitions and energy transition, necessitating coordinated policy and infrastructure investments.
Stock Market Rally and Volatility Risks
The KOSPI index has surged over 70% in 2025, driven by tech and AI optimism, but rising margin loans and retail investor leverage heighten volatility risks. The VKOSPI volatility index spiked to 44, signaling market sensitivity. Regulatory concerns focus on speculative borrowing and potential for a policy-driven bubble, posing risks to financial stability and investor confidence.
Iran’s Elevated Oil Exports Despite Sanctions
Iran's crude oil exports have surged to their highest levels since 2018, defying renewed UN sanctions. This resilience challenges Western expectations and underscores Iran's ability to sustain energy revenues through alternative channels. The sustained export levels influence global oil supply dynamics and complicate sanction enforcement, affecting energy market strategies and geopolitical calculations.
Political Instability and Market Sentiment
Domestic political unrest and governance uncertainties have heightened risk perceptions, triggering foreign investor sell-offs and stock market volatility. Political instability undermines policy consistency, deters long-term investment, and exacerbates economic fragility, posing significant challenges for sustainable business operations and market confidence.
Inflation and Macroeconomic Stabilization
Egypt’s inflation rose modestly by 1.3% in October 2025, with annual inflation easing to 10.1%. This reflects ongoing stabilization following currency and fiscal reforms, including a flexible exchange rate and IMF-backed programs. Controlled inflation supports consumer purchasing power and economic predictability, essential for investment and trade planning.
Rising Foreign Asset Holdings and Domestic Investment Decline
South Korea’s foreign financial assets have surged to $2.7 trillion, over half of GDP, driven by current account surpluses and outbound investments. While enhancing external financial strength, this trend weakens domestic capital markets, depresses the won, and exposes the economy to global risks, potentially undermining long-term growth and productivity.
Foreign Investor Capital Fluctuations
Despite recent foreign investor withdrawals totaling Rp3.79 trillion in November 2025, domestic trading activity surged with record transaction volumes and values. Net foreign sales year-to-date remain significant, yet increased domestic investor engagement mitigates volatility. This dynamic highlights Indonesia's evolving capital market structure and the importance of domestic investor base stability amid global capital flow shifts.
US Financial Stability Risks from Market Valuations
The Federal Reserve highlights elevated asset valuations and high leverage, especially among nonbank financial entities, as leading financial stability risks. Market optimism and compressed corporate bond spreads increase vulnerability to sharp asset price corrections. Policy uncertainty and geopolitical risks have risen, necessitating vigilance to mitigate potential disruptions amid ongoing economic and political challenges.
US Sanctions Impact on Russian Oil Exports
Recent US sanctions targeting Rosneft and Lukoil have disrupted Russian oil exports, causing a drop to a three-month low in seaborne shipments. Increased freight costs and shipping risks challenge supply chains, while Russia relies on a 'shadow fleet' to maintain exports. These sanctions threaten Russia’s oil revenue and global energy market stability.
Rare Earth Export Controls
China's tightening of rare earth export restrictions threatens European manufacturing and technology sectors reliant on these critical minerals. Given China's dominance in rare earth supply chains, these controls risk disrupting clean energy, defense, and high-tech industries in Europe, intensifying geopolitical tensions and accelerating efforts to diversify supply sources and develop domestic capabilities.
Foreign-Invested Exporters' Economic Role
Foreign-invested companies, though only 6% of exporters, contribute 15% of South Korea's exports, highlighting their critical role in trade performance. Their presence diversifies exports and supports domestic production, especially in semiconductors and automobiles. Rising economic security concerns prompt calls for enhanced screening systems to mitigate risks from foreign investments, balancing openness with national security.
Military Readiness and Regional Security Posture
Iran has enhanced its military preparedness, particularly around the Persian Gulf and strategic islands, signaling readiness to counter potential aggression. This militarization amid regional tensions with the US and Israel elevates security risks for maritime trade routes, potentially disrupting supply chains and increasing insurance and operational costs for international businesses.
Consumer Spending Contraction and Economic Stagnation
Rising living costs and inflation have led Russian consumers to reduce spending, especially on non-essential goods. Despite nominal wage increases, real incomes are stagnant or declining due to inflation and reduced bonuses. This shift to cautious consumption dampens domestic demand, constrains business growth, and signals broader economic stagnation risks.
Geopolitical Peace Negotiations
Emerging peace proposals, including a US-backed 28-point framework, propose territorial concessions and military limitations for Ukraine, sparking domestic and allied concerns. These negotiations influence regional stability, investor confidence, and defense sector dynamics, with potential to reshape Ukraine's sovereignty, security guarantees, and economic reconstruction prospects.
Sustained Economic Growth
Indonesia's economy grew 5.04% YoY in Q3 2025, supported by domestic consumption, foreign demand, and strong performance in agriculture, trade, construction, and mining sectors. Export growth, particularly in non-oil and gas manufacturing, reinforces Indonesia's role in global supply chains and trade, influencing investment decisions and market access strategies.
Taiwan's Energy Security Vulnerabilities
Taiwan's heavy dependence on imported energy, particularly LNG and coal, exposes it to potential Chinese gray-zone tactics like blockades and cyberattacks aimed at crippling its power grid. Such energy sieges could disrupt semiconductor production, causing global supply chain shocks and emphasizing Taiwan's critical energy security challenges.
Economic Contraction and Growth Challenges
Mexico's economy contracted by 0.3% in Q3 2025, signaling a slowdown after earlier growth. Industrial sector weakness, trade tensions, and tighter financial conditions contributed to this downturn. The contraction raises concerns about meeting annual growth targets and may pressure policymakers to adjust monetary policies amid inflation risks and external geopolitical headwinds.
Malaysia-US Reciprocal Trade Agreement (ART)
The Malaysia-US ART, signed during President Trump's 2025 visit, reduces US tariffs on Malaysian exports from 25% to 19%, safeguarding key sectors like semiconductors and pharmaceuticals. It aims to stabilize trade, protect jobs, and maintain Malaysia's export market amid global tariff risks, reinforcing bilateral economic ties and investment confidence.
Corporate Risk Management and Cybersecurity Challenges
Indian firms face escalating risks from cyber threats, economic volatility, regulatory pressures, and talent shortages. Despite awareness, few quantify exposures or leverage analytics for risk mitigation. Enhanced focus on adaptive risk management, digital resilience, and data-driven strategies is critical for sustaining competitiveness and managing operational and financial vulnerabilities in a complex risk environment.
Tariff Anxiety and Corporate Uncertainty
US CFOs report that policy volatility, including tariffs and regulatory unpredictability, imposes a significant revenue drag—estimated at 6% annually. This uncertainty undermines pricing power, disrupts supply chains, and complicates capital investment, particularly for firms with substantial global exposure.
Garment Industry Recovery and Challenges
Vietnam's textile and garment sector rebounded with 7.7% export growth in early 2025, climbing to third globally. Yet, challenges include high production and logistics costs, reliance on imported raw materials, and tariff pressures, especially from the US. The industry is shifting towards automation, green technologies, and premium products, while seeking new markets and stronger financial support to sustain competitiveness.
Fiscal Policy and Currency Market Effects
Aggressive tax hikes in France contribute to capital flight towards USD assets, fueling a strong US dollar rally. These fiscal measures impact foreign investment attractiveness and alter currency valuations, affecting trade competitiveness and investment flows. The interplay between French fiscal policy and global currency markets presents both risks and opportunities for multinational investors and exporters.
Taiwan Semiconductor Dominance
Taiwan's economy and stock market are heavily driven by its semiconductor industry, led by TSMC, which accounts for 30-35% of the Taiwan Stock Exchange index. This dominance makes Taiwan a critical node in global technology supply chains, especially for chips used in AI, electric vehicles, and electronics, impacting international trade and investment strategies.
State-Owned Enterprise Consolidation
Pertamina's planned consolidation of subsidiaries aligns with broader government efforts to streamline nearly 1,000 state-owned enterprises to about 200. This rationalization aims to enhance operational efficiency and focus on core energy activities, impacting energy sector investments and state enterprise governance.
State-Private Energy Sector Dynamics
Thailand's energy sector features a complex interplay between state entities and private firms like Gulf Energy, which benefit from long-term contracts and regulatory advantages. While this model ensures energy security, it raises concerns about transparency, market distortions, and cost inefficiencies that may affect consumers and investment climate.
Potential Designation of Crypto Conglomerates
South Korea’s Fair Trade Commission is considering designating major crypto exchanges like Dunamu and Bithumb as crypto financial conglomerates, subjecting them to stricter oversight. This reflects growing recognition of their systemic importance but challenges existing regulatory frameworks, signaling a shift towards integrating digital assets into mainstream finance with enhanced risk management.
Consumer Confidence and Economic Sentiment
Despite inflation and interest rate concerns, Australian consumer confidence has rebounded to a four-year high, reflecting optimism about economic recovery and personal finances. This shift influences domestic demand, retail performance, and broader economic momentum.
International Aid and Funding Uncertainties
Ukraine's financial sustainability heavily depends on international aid, including a proposed €140 billion EU reparations loan funded by frozen Russian assets. Political hesitations within the EU, particularly from Belgium and Kremlin-aligned states, risk delaying critical funding. Such delays could force austerity measures, impacting public services and military financing.
US-China Trade Tensions and Market Impact
US-China relations remain a critical fracture point affecting global markets. Delays in expanding China sanctions have temporarily eased tensions, reducing volatility and supply chain disruptions. However, underlying trade and geopolitical complexities persist, influencing investor confidence, trade policies, and the cryptocurrency market, highlighting the need for continuous monitoring of this bilateral relationship.
Labor Market and Demographic Challenges
Ukraine faces a shrinking labor force due to war-related displacement, conscription, and emigration, especially among young men aged 18-22. This labor deficit constrains business operations and growth prospects, while increasing reliance on automation and foreign labor. The demographic shifts also affect domestic consumption and long-term economic sustainability.