Global economy in 2018 : Will geopolitics trump economics?

THE start of the year seems to be an appropriate time to reflect on the geopolitical events in 2018 that are likely to impact the world economy and that global investors should be watching. Since Singapore remains inextricably linked to the global economic landscape, its economic and political position in the region - and in the world - may also be impacted by such international events.

Under the leadership of President Donald Trump, the United States' relationships with China, Russia and the Middle East are changing, and these changes will reverberate globally.

As the US evaluates its position with respect to Iran, North Korea and the Middle East, political analysts are watching how China will respond. In the past, China has not been hesitant in opposing US decisions; and in fact, recent trends indicate that China will move to fill any leadership gaps left by the US in global politics. The differences between the two countries are expected to come to the fore early this year when China is expected to oppose the move by the US to decertify the nuclear deal that then president Barack Obama struck with Iran in 2015. China is likely to have the support of EU and Russia, thus dividing global opinion on this issue. Disagreements between the US and China are also expected to grow in relation to the US's role - along with that of its allies Japan and India - in the geopolitics of the Indian Ocean region, through which 60 per cent of global oil shipments pass to fuel-importing Asian economies.