Return to Homepage
Image

Mission Grey Daily Brief - August 05, 2024

Summary of the Global Situation for Businesses and Investors

The global situation remains volatile, with escalating tensions in the Middle East, far-right protests in the UK, and economic woes in China and Myanmar. In Bangladesh, violent student protests have led to a nationwide curfew. In the US, former President Trump has vowed energy dominance, while Taiwan faces an increasing threat from China.

Middle East Tensions

Regional tensions in the Middle East have escalated following the assassination of Hamas' leader, Ismail Haniyeh, in Tehran, and a strike in Beirut that killed Hezbollah commander, Fuad Shukr. Iran, Hamas, and Hezbollah have vowed revenge, raising fears of a wider conflict. The US has deployed additional fighter jets and warships to the region, and advised citizens to leave Lebanon. Turkish President Erdogan has offered to intervene to prevent a full-scale war, but Hezbollah is expected to respond, risking further escalation.

Risks and Opportunities

  • The risk of a wider regional conflict has increased, which could impact businesses operating in the region.
  • Businesses should monitor the situation closely and be prepared to evacuate staff if necessary.
  • The Turkish offer to intervene provides a potential opportunity to de-escalate tensions and avoid a full-scale war.

Far-Right Protests in the UK

Violent far-right protests erupted across cities in the UK, including London, Tamworth, Middlesbrough, Rotherham, and Bolton, following the killing of three young girls in Southport. Clashes with police resulted in over 420 arrests, and Prime Minister Starmer has warned those involved will face the full force of the law.

Risks and Opportunities

  • Businesses with operations or assets in the affected areas may face disruptions or damage due to the protests.
  • The risk of further unrest remains high, and businesses should consider implementing security measures to protect their staff and assets.

Economic Woes in China and Myanmar

Pessimism surrounds China's economic outlook, with concerns over a "return to authoritarianism and a planned economy" under President Xi. The health industry and biotechnology are seen as potential growth vectors, but overall, China's economy is slumping. Meanwhile, Myanmar's economy is in a quagmire, with a forecast of only a 1% rise in GDP for the financial year, and the junta's coercive control exacerbating the situation.

Risks and Opportunities

  • Businesses with operations or investments in China and Myanmar face significant risks due to the economic downturns and political instability.
  • The health industry in Hong Kong and China could provide some opportunities for growth, especially in the biotechnology sector.
  • Myanmar's neighbors, such as India, Thailand, and China, may offer alternative trade opportunities for businesses affected by the country's economic crisis.

US Energy Dominance

Former US President Trump has vowed to harness America's untapped energy resources, which he calls "liquid gold," to achieve energy dominance on the world stage. He criticized current policies restricting energy infrastructure and pledged to revive the auto industry through tariffs on countries like China and Mexico.

Risks and Opportunities

  • Trump's energy policies, if implemented, could impact global energy markets and affect businesses in the energy sector.
  • Businesses in the auto industry may benefit from Trump's plans to bring back auto jobs and increase domestic production.

Student Protests in Bangladesh

Violent student protests in Bangladesh over a controversial public sector job quota system have resulted in a nationwide curfew. Clashes with police and ruling party activists have led to almost 100 deaths and thousands of injuries. The protests have turned into an anti-government movement, with demonstrators demanding the resignation of Prime Minister Sheikh Hasina.

Risks and Opportunities

  • The nationwide curfew and internet shutdown will disrupt businesses and investors in Bangladesh.
  • The political instability and violence pose significant risks to businesses operating in the country.
  • Businesses should monitor the situation and consider temporarily suspending operations if necessary to ensure the safety of their staff.

Further Reading:

Almost 100 people killed in Bangladesh protests as nationwide curfew imposed - Sky News

Bangladesh: 24 killed, more injured in student protests - DW (English)

Bangladesh: 50 killed, more injured in student protests - DW (English)

Biden voices hope Iran will stand down but is uncertain - CNBC

Donald Trump says America has more 'liquid gold' than Saudi Arabia or Russia, vows energy dominance - The Times of India

Far-right activists clash with police as violent protests erupt in cities across U.K. on Saturday - The Associated Press

Hard Numbers: Far-right unrest in UK, Tragedies & infrastructure woes in China, Hawaii fire settlement reached, al-Qaida affiliates stir trouble in Somalia & Niger, Olympic firsts - GZERO Media

How Hong Kong can help overturn narrative of China turning inwards - South China Morning Post

Lebanon should take up Erdogan’s offer to step in - Arab News

Michael Mazza On Taiwan: For defense spending, 3% of GDP too little, too late - 台北時報

Myanmar’s economy sinks deeper into quagmire as junta extends coercive control - This Week In Asia

Newspaper headlines: 'Far right rampage' and 'Robinson in Cyprus' - BBC.com

Themes around the World:

Flag

Global Competition for Critical Minerals

Australia is central to G7-led efforts to diversify global critical minerals supply chains, countering China’s dominance. International collaboration and investment in Australian mining and processing are accelerating, with implications for technology, defense, and clean energy industries worldwide.

Flag

Trade Policy and Shifting Global Partnerships

Germany’s export model faces headwinds from US tariffs, weak Chinese demand, and euro appreciation. The India-EU FTA, advanced during Chancellor Merz’s India visit, aims to diversify trade partners and strengthen ties with India, reflecting a strategic pivot amid global trade tensions.

Flag

Investment Strategy Reboot Needed

Thailand’s government and industrial leaders call for reforms to attract high-value FDI in sectors like high-tech, green infrastructure, and wellness tourism. Streamlined processes, legal transparency, and infrastructure upgrades are essential for regaining competitiveness and sustainable growth.

Flag

Labor Cost Pressures and Wage Policy

Labor unions are pressing for significant wage increases in Jakarta to match the city’s high living costs. Rising labor costs could affect operational budgets, investment decisions, and Indonesia’s competitiveness as a manufacturing and services hub.

Flag

Suez Canal Economic Zone Expansion

The Suez Canal Economic Zone reported a 55% revenue increase and $14.2 billion in contracted investments, with new projects in industrial and port sectors. Despite recent disruptions, the zone remains pivotal for global supply chains, regional manufacturing, and Egypt’s export growth strategy.

Flag

UK Industrial Strategy and Investment Zones

The UK’s 10-year growth plan focuses on attracting investment in finance, life sciences, clean energy, and manufacturing. New investment zones, freeports, and public-private partnerships are designed to enhance competitiveness and supply chain innovation.

Flag

US Sanctions and Export Controls Expand

The US continues to use sanctions and export controls as tools of foreign policy, targeting adversaries such as Iran and Russia. The complexity and reach of OFAC measures create significant compliance risks and operational hurdles for international businesses and financial institutions.

Flag

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.

Flag

Domestic Infrastructure and Talent Pressures

Relocation of manufacturing and increased overseas investment may strain Taiwan’s domestic infrastructure and talent pool, potentially impacting innovation capacity and competitiveness at home, while intensifying the need for workforce development and policy adaptation.

Flag

Geopolitical Tensions and Sanction Risks

US sanctions and new tariffs targeting countries trading with Iran, including Turkey, introduce significant uncertainty for regional trade. These measures could disrupt supply chains, increase compliance risks, and necessitate strategic adjustments for businesses engaged in cross-border operations.

Flag

Urban Mobility and Infrastructure Investment

Major infrastructure projects, such as the Riyadh Metro expansion, are improving urban connectivity and supporting economic diversification. These investments, aligned with Vision 2030, enhance logistics, workforce mobility, and the overall business environment, but require sustained funding and efficient execution to realize their full impact.

Flag

US-Canada Trade Tensions Escalate

Ongoing US tariffs and President Trump’s threats to undermine the CUSMA/USMCA agreement are destabilizing North American supply chains, particularly in the auto sector. Canada faces heightened uncertainty as over 75% of its exports rely on US access, directly impacting investment and operational planning.

Flag

Semiconductor and Technology Autonomy Push

Japan is investing heavily in domestic semiconductor capacity, notably through Rapidus, to achieve self-sufficiency in advanced chips. This strategic pivot aims to reduce reliance on Taiwan and China, strengthen economic security, and attract global investment in high-tech manufacturing and R&D.

Flag

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.

Flag

UK–EU Trade Realignment Debate

The UK is negotiating closer alignment with the EU, including regulatory and customs changes. This ongoing debate creates uncertainty for exporters, investors, and supply chains, with potential for both reduced friction and political backlash impacting business planning.

Flag

Nationwide Protests and Legitimacy Crisis

Iran faces its largest protests in decades, driven by economic collapse, inflation exceeding 40%, and a generational rejection of the ruling system. The unrest, spreading to all provinces, threatens regime stability and disrupts business operations.

Flag

Major Infrastructure and Digital Expansion

India’s infrastructure financing is integrating with global capital markets, focusing on green, resilient, and tech-enabled projects. Data center capacity doubled in 2025, with projections to triple by 2030, supporting digital transformation and robust supply chain logistics.

Flag

Infrastructure Investment and Bottlenecks

Vietnam plans to secure $5.5 billion in foreign loans for 2026 and up to $38 billion by 2030 to fund major infrastructure projects. Persistent disbursement delays due to land clearance, project approval, and administrative hurdles could impact project timelines and investor confidence.

Flag

Sanctions Enforcement and Maritime Security

France has intensified enforcement of sanctions against Russia’s shadow oil fleet, including high-profile naval seizures. This escalates geopolitical risks in maritime trade, raises insurance costs, and could provoke Russian retaliation, affecting global shipping and energy supply chains.

Flag

Export-Led Growth Ambitions Face Constraints

Pakistan targets $60 billion in exports by 2030, but structural financial constraints—such as government dominance in banking, high energy costs, and weak credit for exporters—limit competitiveness. Achieving export goals requires deep reforms in fiscal, monetary, and industrial policy to unlock sustainable growth.

Flag

Labor Market Saudization Intensifies

New regulations require 60% Saudization in marketing and sales roles, impacting expatriate employment and raising labor costs for multinationals. While aiming to boost local employment and job quality, these policies may disrupt established supply chains and increase compliance burdens for international firms.

Flag

US Tariff Escalation and Trade Wars

Recent US tariff threats against China, the EU, and South Korea have intensified global trade tensions, disrupting supply chains and raising costs. Tariffs averaging 18%—the highest since 1934—are largely borne by US consumers and businesses, impacting inflation and investment strategies.

Flag

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.

Flag

Escalating Geoeconomic Tensions with Japan

China’s sweeping export controls on rare earths and dual-use items to Japan, in response to Tokyo’s Taiwan policy, have disrupted supply chains in electronics, automotive, and defense. These measures signal China’s readiness to weaponize trade, amplifying risk for all international investors and operators in the region.

Flag

Energy Transition and Cost Pressures

Germany’s energy transition has led to high electricity and gas prices, reduced supply reliability, and increased vulnerability following the loss of Russian imports. The government is subsidizing new gas plants and industrial power, but energy costs remain a major drag on competitiveness and investment.

Flag

ESG Compliance and Export Market Access

Stricter environmental, social, and governance (ESG) standards are becoming mandatory for export access, especially to the US and EU. Recent US bans on Vietnamese seafood due to environmental non-compliance highlight the growing importance of ESG for maintaining global market share and attracting sustainable investment.

Flag

Energy Security and Eskom Reform

South Africa’s improved energy stability, following Eskom’s R254 billion bailout and operational reforms, has reduced load shedding and restored investor confidence. However, high electricity costs and municipal debt remain risks for energy-intensive industries and future investment.

Flag

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.

Flag

Green Transition and ESG Imperatives

Vietnam is investing heavily in green infrastructure, renewable energy, and sustainable finance, with Ho Chi Minh City alone planning nearly $40 billion for green transition. Compliance with global ESG standards and carbon border adjustment mechanisms is becoming critical for export competitiveness and investment attraction.

Flag

Technology Export Controls Tighten

The US continues to restrict advanced technology exports to China, especially AI chips, with new licensing and compliance requirements. Recent policy adjustments allow limited sales with strict conditions, balancing national security with economic interests and impacting global tech competition.

Flag

US-Korea Alliance and Security Realignment

The evolving US-Korea alliance, shaped by Trump’s ‘America First’ policies, includes renegotiated defense cost-sharing, operational control, and military modernization. Shifts in USFK posture and nuclear submarine projects affect regional security and business risk assessments.

Flag

Rising Role in Global Supply Chains

Indonesia is capturing a growing share of global supply chains as U.S.-China trade declines, with Indonesian imports to the U.S. rising 34% in 2025. This shift enhances Indonesia’s position as a sourcing hub, attracting investment and diversifying global manufacturing.

Flag

US-China Trade Tensions Escalate

Renewed tariff threats and secondary sanctions on China, especially over Iranian oil, have reignited US-China trade tensions. US imports from China dropped 28% and exports fell 38% in 2025, disrupting global supply chains and prompting sourcing shifts to Southeast Asia.

Flag

Labor Market and Immigration Uncertainties

US labor market data shows mixed signals: job growth has slowed, unemployment remains low, and wage growth persists. Immigration policy remains restrictive, impacting talent availability and operational costs for multinational firms, especially in technology and healthcare sectors.

Flag

Energy Sector and Industrial Policy Dynamics

Petrobras-led initiatives are revitalizing Brazil’s naval and energy industries, while the government balances oil exploration with climate commitments. The sector’s performance, regulatory changes, and global commodity trends will influence Brazil’s industrial output, export capacity, and investment climate.

Flag

Private Investment Skepticism Toward Megaprojects

Despite government ambitions for nation-building infrastructure, global capital markets remain cautious due to high execution risks, uncertain returns, and climate transition challenges. Investor hesitation threatens the financing and timely delivery of major Canadian projects.