Economic Security and Resilience Review

Economic Security and Resilience Review

Date: July 05, 2024

This month’s ESRR reviews the Singapore ministerial meeting of the Indo-Pacific Economic Framework for Prosperity (IPEF) which was held on June 6, 2024. The author observes that the IPEF is working out new modes of cooperation among its 14 members, including India, in building resilient supply chains and in promoting a clean economy, unlike a typical trade agreement focussed on rule making. The outcomes of the Clean Investor Forum initiative that was held alongside the IPEF meeting have also been highlighted.

The ESRR covers the visit of the US National Security Advisor Jake Sullivan to India for a review meeting of the bilateral initiative for critical and emerging technologies (iCET). Significant progress has resulted from the two governments, their industry and academia, working together in key technology sectors including space, defense, semiconductors, advanced telecom, AI, quantum, biotechnology and clean energy.

The annual World Investment Report 2024 was released by UNCTAD on June 20, drawing attention to world investment trends during the year 2023. While global FDI flows declined overall by 2% during the year compared to 2022, there was a sharp fall of 43% in the level of FDI inflows into India. At a time when India is seeking to significantly expand its manufacturing base, far more efforts on ease of doing business may be necessary to attract greater levels of FDI into the country.

This ESRR also looks at the outcomes of the G-7 Apulia summit, which saw pointed criticism of China’s economic policies and practices, and dwelt on the required trade toolkit to adequately deal with this concern. PM Narendra Modi attended the Apulia summit as an outreach invitee, underlining the importance of wider diffusion of the benefits of technology within all sections of society.

There was much international attention during the month on the announcement by the EU of provisional application of countervailing duties of up to 38.1% on electric vehicle imports from China. Negotiations between the EU and China are currently underway to resolve this matter, even as China has retaliated in the interim by announcing a probe on imports of pork from the EU into China, in addition to the probe it is already undertaking on cognac imports from the EU. Meanwhile, Canada has announced consultations to examine China’s trade practices in the electric vehicle sector.

This month’s ESRR draws attention to US efforts to rally its allies and partners for greater cooperation in strategic technology sectors and building trustworthy supply chains. These issues received focus at the US-Japan-ROK trilateral meeting of trade and industry ministers held in Washington D.C. on June 26, 2024. A larger meeting was also held, at which the three ministers were joined in by the EU Commission Vice President Margrethe Vestager.

China is seeking to strengthen and showcase its strategic economic ties with countries in the region. This edition of ESRR covers Chinese Premier Li Quiang’s visits to New Zealand, Australia and Malaysia from June 13-20, 2024 that were marked by both symbolism and substance.

Other developments covered in this issue include the critical mineral related initiatives announced by  India, China’s launch of the third phase of its semiconductor fund, and Chinese PM Li’s remarks at the WEF meeting in Dalian, China.

These and certain other developments covered in this month’s ESRR can be viewed at ESRR, Vol. II, Issue 6.

To read this ESRR, Vol. II, Issue 6, please see the PDF attached.