| Bloomberg's New Economy Forum returns to Singapore Nov. 8-10 as the world's most influential leaders gather to address critical issues facing the global economy. This year's theme, "Embracing Instability," focuses on underlying economic issues such as persistent inflation, geopolitical tensions, the rise of AI and the climate crisis. Request an invitation here. In the tit-for-tat series of tariff hikes launched by then-President Donald Trump in 2018, it was quickly apparent that China would run out of scope to return fire, because it only imported a fraction of the value of goods that the US imports from China. But it had other instruments in the mercantilist toolkit, and recent news has shown Beijing has honed them over time. Antitrust rulings and tax inspections have emerged as new arrows in a quiver that already featured things like curbs on exports of important raw materials and the wherewithal to halt overseas package tours, with all their spending power. News on any of these fronts has the ability to reshape the outlook for companies affected, with implications for their share prices. Witness the $9 billion hit at one point this week to stocks linked to Foxconn Technology Group. That was after China put scrutiny on Apple Inc.'s largest iPhone assembler over apparent concerns with Taiwan's election. For investors, it means understanding geopolitical currents has become vital. Simply looking at products, marketing, costs and the broader economic backdrop aren't enough. Goldman Sachs Group Inc. is so taken by the opportunity of guiding clients through what it calls "the swift currents of world affairs," it just unveiled a whole new institute to do so.  Foxconn plant in Zhengzhou, China. Photographer: Qilai Shen/Bloomberg The moves against Foxconn—Chinese state media said regulators are tax-auditing its subsidiaries and investigating its land use—illustrate that anyone might be a target. Making China a less welcoming place to do business for a giant global supply chain contractor wouldn't seem to make sense at a time when Apple and its partners are considering production elsewhere, notably India. And Tim Cook, Apple's chief executive, just paid a visit to China, where he talked up plans for expanding smart manufacturing in the country, a message very much in sync with President Xi Jinping's priorities. But this brandishing of economic weapons by Beijing does fit with a long-established pattern of the Chinese Communist Party (CCP), one where it sacrifices economic interests wherever it perceives its political ones at risk. The trouble with Foxconn stems from its founder, Terry Gou, and his plans to run an independent campaign for president in Taiwan's election in January.  Terry Gou Photographer: Lam Yik Fei/Bloomberg Ironically, Gou had pledged to improve ties with China, which deteriorated under the ruling Democratic Progressive Party (DPP). But his candidacy— which threatens to split the opposition vote—was increasing the odds of the DPP candidate prevailing. China's state-controlled Global Times this week condemned Gou's campaign. In the field of US-China tech competition, antitrust has become an element for investors to consider. That was clear over the summer, when Intel Corp. abandoned an acquisition that was key to the American champion's efforts to catch up with Taiwan Semiconductor Manufacturing Co. in the foundry market. Chinese antitrust regulators, who have sway because their country is the world's biggest buyer of many products, dragged their feet on approving Intel's $5.4 billion attempt to buy Israel's Tower Semiconductor Ltd. Intel gave up on the plan after failing to secure Beijing's nod in time. Earlier this month, shares of VMWare Inc. slid almost 8% after the Financial Times reported China may hold up its $61 billion acquisition by Broadcom Inc. That would thwart two companies aiming to combine a cloud-computing software provider with a major chipmaker. For San Jose, California-based Broadcom, it would mark another ditched M&A deal against the backdrop of US-China competition. In March 2018, Trump had blocked it from acquiring fellow chipmaker Qualcomm Inc. At the time Broadcom was based in Singapore. So it now has a chance of being hit from both sides. A whole new business is emerging to gauge these kinds of risks. J.H. Whitney Data Services of New York has come up with geostrategic risk ratings (GRR) for about 600 publicly listed companies, with stock-market capitalizations above $5 billion. GRR measures a company's "degree of entanglement with adversarial nations," as John O'Connor, the firm's chairman, described it in an August interview. That encapsulates production facilities, sales and also governance—whether a company is owned by or has influential shareholders or board members from an "adversarial" country, he explained. A firm with low risk is rated 3, while high risks are 1. "Companies like Apple and Nvidia rate very poorly," O'Connor said.  Nvidia headquarters in Santa Clara, California Photographer: Marlena Sloss/Bloomberg Yet both of those companies' shares have performed well this year, with Nvidia soaring about 177% despite Washington putting limits on the chips it can sell to China. (Apple is up about 30%.) The way fund manager Martin Schulz, who's overseen international equity portfolios for decades, says he thinks about it is that there's a new element to gauge in corporate management—the ability to deal with these new types of security and supply-chain risks. "In the past, you'd have companies that just were very good at finding low-cost production. But now you need to find companies that are able to really manage the entire supply chain" in a more complex world, Schulz said in an interview this week. Schulz, who's head of the international equity group at Federated Hermes, also said, "One area that I'm getting more nervous about is just—and I know companies are thinking about it—but just dealing with the Chinas of the world and what it means for your executives over there, or traveling over there." His remark comes in the wake of China's increasing detentions of business travelers. With the canvas of international economic conflict now so broad, it pays more than ever to be watching geopolitics closely. —Chris Anstey Get the Bloomberg Evening Briefing: Sign up here to receive Bloomberg's flagship briefing in your mailbox daily—along with our Weekend Reading edition on Saturdays. | 
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