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Goldman Sachs Analyst Examines Geopolitics’ Influence on Global Business and Finance

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The ongoing rivalry between the world’s two largest powers, the United States and China, is leaving an indelible mark on various aspects of global business and finance. In a recent episode of The Exchange podcast, Jared Cohen, a prominent figure from Goldman Sachs, delved into the intricacies of this geopolitical landscape, offering insights on how investors should navigate these uncertain times.

As the Managing Director and Head of Emerging Market Strategy at Goldman Sachs, Cohen holds a wealth of experience in understanding the complexities and interplay between global politics and investment strategies. During the podcast, he shed light on the ramifications of the US-China rivalry and its potential consequences for investors.

Cohen emphasized that the rivalry’s impact is not confined to the realm of politics but extends to numerous sectors, including technology, supply chains, and financial markets. He highlighted how geopolitical tensions have led to an increasing divergence between the US and China, prompting a phenomenon known as “decoupling.”

Decoupling refers to the process of reducing economic interdependence between countries. In the context of the US and China, it entails a separation of their respective financial systems and a reevaluation of supply chains. Cohen argued that while decoupling might seem like a valid strategy for some investors, it is crucial to understand its limitations.

According to Cohen, complete decoupling is not a realistic scenario given the intertwined nature of the global economy. He stated, “The world is going to remain interconnected.” Cohen cautioned that investors need to carefully evaluate the potential risks and rewards associated with decoupling, as well as the specific sectors that may be most affected.

In terms of technology, Cohen explained that the US-China rivalry has spurred a competition for dominance in emerging technologies such as artificial intelligence and 5G. He stressed that investors should closely monitor the regulatory environment surrounding these technologies, as it could have significant implications for companies operating in these sectors.

Furthermore, he highlighted the importance of understanding supply chain dynamics. The US-China trade war and subsequent disruptions caused by the COVID-19 pandemic have exposed vulnerabilities in global supply chains. Cohen urged investors to assess the resilience and adaptability of supply chains, as disruptions can have far-reaching consequences for companies and their investments.

Despite the challenges posed by the US-China rivalry, Cohen also identified potential opportunities for investors. He noted that as the two superpowers compete for technological and economic dominance, countries and regions that offer alternative investment options may benefit. He mentioned Southeast Asia and parts of Africa as potential areas of interest for investors looking to diversify their portfolios.

In conclusion, the US-China rivalry continues to shape the global business and finance landscape, with ramifications felt across various sectors. Jared Cohen’s insights on The Exchange podcast offer valuable guidance for investors looking to navigate these uncertain times. While decoupling may be an appealing strategy, Cohen highlights the need for careful evaluation and understanding of the risks involved. By closely monitoring technology developments and assessing supply chain resilience, investors can potentially seize opportunities amidst this evolving geopolitical landscape.

More detail via Reuters here… ( Image via Reuters )

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