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If you have been following the news lately, you have noticed that the relationship between the two largest economies on the planet is heating up once again. Their clash is not just political but it may go as far as affecting the financial world. It ripples through the global financial market, impacting everything from stocks to commodities. For investors understanding the impact of these moves is crucial since you can’t afford to be caught off guard.
The US government is mounting up efforts to limit Chinese access to important and vital technologies, including and not limited to semiconductors and tech sectors. In retaliation China is limiting exports of rare earth minerals, materials that are key in manufacturing most things from smartphones to electric cars. These minerals might sound obscure but believe me they are the building blocks of modern technology.
The financial implications could be long-lasting since many experts believe this could speed up the economic split between the US and China. This means companies might move supply chains out of China and the US to places like Vietnam, India which will definitely increase cost and squeeze out profits, most of it if not all. Global financial system might split up leading to two seperate spheres, making cross- border investment trickier, risky and more expensive.
In the end the tension between China and the US isn’t just political , rather it is a major force which will reshape the financial landscape and keeping up with these new developments is essential to anyone who wants to survive in the financial investment world in the future.
How are you adjusting your businesses or investments in regards to the geopolitical dance ???
