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Great power conflict risk: Russia or China

Overview

Key judgments

  • Since the Cold War, the geopolitical fault line running through Western Eurasia has been destabilized; and the resulting risk of great power conflict should be monitored by asset allocators.
  • Any “great deals” with Russia struck by the incoming Trump administration will only reduce global risk if they resolve the underlying tensions stemming from NATO enlargement.
  • Genuine creative solutions can be imagined and the Putin administration for its part will target this prize; but the real-world pre-condition might be a deterioration in US-China relations – resulting in a net increase in global risk.

SIDEGLANCE: China’s new energy leadership

  • The global energy revolution – and major investment implications of the eclipse of Big Oil – are accelerating thanks to China, and the underlying drivers are largely political: smog and, now, Trump.
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