For over a decade, rare earths have emerged as a crucial commodity in the race for the geo-economic dominance of this century, and that is not by chance. As a matter of fact, rare earths are fundamental for the development of the new technologies that will enable the green revolution envisaged by the international community’s climate change efforts.
Global foreign direct investment (FDI) flows fell by 35 per cent in 2020 to $1 trillion, from $1.5 trillion in 2019 (World Investment Report 2021). This is the lowest level since 2005. The pandemic has hit hardest developed economies (-58%) while developing countries proved relatively more resilient (-8%).
The COVID-19 pandemic, aside from being a health disaster, was a huge economic shock to the world economy. All G20 countries had negative GDP growth in 2020, except for China, which eked out a 2.3% expansion. All these major economies, and most smaller ones too, carried out Keynesian counter-cyclical fiscal and monetary stimulus policies.
Debate over a shake-up of the international corporate tax system has been ongoing for many years now, with few concrete outcomes (Figure 9). But this time looks different. The pandemic has had a profound effect on public finances around the world. And with governments scrabbling for additional revenues, corporate taxes are an attractive source.
In the early ages of hydrocarbons, when the oil companies discovered gas, they quickly abandoned the wells and moved the drilling rigs to other areas, looking for the most valuable crude oil. In those days, gas was considered as the poor relative of the fossil fuel family.
Seventeen elements in the periodic table – the so-called “rare earths” – play a major role in the calculations and strategies of various nations. In many ways, rare earths are the vitamins of industrial society in the 21st century: they are vital to key products from hi-tech items (smartphones and monitors) to energy conversion systems (wind turbines, photovoltaic panels and electrical machinery) and even military equipment (lasers and radar). The difficulties involved in replacing them with alternative materials make rare earths uniquely strategic resources.
Semiconductors are the world's fourth-most-traded product after crude oil, refined oil, and cars.
Driven by acute shortages and growing geopolitical competition, semiconductors have shot up the EU policy agenda over the past year. Caught in the crossfire of a global trade war and exposed to the vagaries of an undiversified supply chain, Europe has understood how its strategic autonomy is dependent on these chips. Looking further ahead, Europe aims to diversify its economic structure and be at the forefront of the next generation of digital technologies.
Taiwan has long been one of the most essential actors for the global semiconductor manufacturing industry, with the world’s largest and most advanced semiconductor foundry, the Taiwan Semiconductor Manufacturing Company (TSMC), and a top fabless integrated circuit (IC) design company, MediaTek. TSMC accounted for over 50% of the 2020 global semiconductor foundry market on top of being the only chipmaker that has mastered the 5nm chip production alongside its rival, South Korea’s Samsung Electronics.
The continued global chip shortage in recent months amid the COVID-19 pandemic has highlighted the role of semiconductors, their supply chain, production stages and business cycle in the global economy.
America’s 78-year-old president, Joe Biden, might not seem like the world’s most tech savvy leader. But some of his administration’s biggest policies have focused on a small but fundamentally important technology: the semiconductor. Known more prosaically as “computer chips”, semiconductors power technology of all types from vast data centers to the simplest consumer electronics. In the age of the Internet of Things, almost every electrical device has a semiconductor inside.
Semiconductors are the strategic industry of the 21st Century. They are the foundation of economic and military power. Future industries will be based on the ability to use semiconductors and software to create new goods and services. Semiconductors are also one of the most highly advanced technologies, operating at the edge of physics and material sciences, and the product of a complex, distributed supply chain centered on the Pacific Rim.