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Sergio Ermotti, head of UBS, recently issued a warning about the changing dynamics of global capital flow. He highlighted the impact of trade tensions between the US and China on various aspects of the global economy.
Despite concerns raised by prominent figures like Donald Trump, Luiz Inácio Lula da Silva, and Christine Lagarde, data suggests that global interconnectedness is still strong. While some regions may be experiencing shifts in trade patterns, overall global flows remain resilient.
A study by the NYU Stern School of Business and DHL reveals that trade, information, people, and capital flows continue to contribute to global interconnectedness. This data challenges the narrative of deglobalization and emphasizes the importance of looking at multiple facets of global integration.
Although there are caveats to consider, such as the impact of populism and protectionism, the data indicates that global flows are adapting rather than declining. Companies are reconfiguring their supply chains in response to geopolitical factors, leading to new patterns of connectivity.
As countries navigate shifting alliances and trade relationships, the future of globalization remains uncertain. The role of key players like the US and China, as well as emerging regions like Latin America, will shape the trajectory of global interconnectedness.
It is essential for policymakers to monitor these trends closely, especially in light of the significant dollar debt that needs to be managed on a global scale.
gillian.tett@ft.com