Global Risks, Local Impact
The global landscape is increasingly fragmented, with escalating geopolitical, environmental, social, and technological challenges threatening stability and progress. While the importance of economic risks has diminished somewhat in this year's survey results, those closely linked to social and geopolitical tensions remain a cause for concern. Armed conflict between states is identified as the most pressing immediate global risk in 2025, with nearly a quarter of respondents considering it their most serious concern for the coming year. Global risks in 2025 will be complex and intertwined, primarily manifested in weak economic recovery, geopolitical tensions, and global governance dysfunction. The impact of these risks will vary significantly across different regions and sectors, with some potentially facing more direct shocks.
Fragmentation of the Global Risk Landscape
As geopolitical tensions intensify, conflicts and instability across the globe are no longer confined to traditional political borders. Various industries and their supply chains are affected to varying degrees. According to the survey, 65% of senior risk experts observed a significant increase in risks over the past year, particularly in social and political unrest, which 75% of policymakers consider one of the major risks.
The rise in geopolitical risks poses a severe test to the resilience of businesses' global operations. The complex situation leads to rapid changes in information and the spread of misinformation, making it difficult for decision-makers to accurately assess the current situation. For multinational corporations, effectively managing these diverse and intertwined risks is a crucial question that every business manager must consider.
Case Study: The Impact of the Ukraine Crisis on Global Markets
The Ukraine crisis is a typical example of the fragmentation of geopolitical risks in recent years. This crisis not only affected the stability of the European energy market but also caused rifts in international political alliances. The repercussions of this event significantly disrupted global markets, forcing companies to pay closer attention to changes in the external environment when conducting international business.
In this context, companies urgently need to establish rapid-response risk management mechanisms to adapt to ever-changing market demands. In an era of rapid information dissemination, a company's ability to acquire and analyze information has become particularly important. According to data from International SOS, from January to November 2024, the number of cases involving overseas security from Chinese clients increased by 23.4% compared to the same period in 2023, reflecting a rising awareness of security risks among businesses.
Strategies for Addressing Geopolitical Risks
In the current escalating geopolitical situation, business managers need to adopt more proactive strategies.
Fully Consider Geopolitical Factors
The Impact of Social and Professional Stress on Employees
When discussing the coming year, an estimated 65% of respondents believed that political stress and anxiety could significantly impact business. Calls for change are growing louder within the workforce, and companies urgently need to listen to and respond to employee needs.
Cross-Departmental Collaboration is Crucial
In the information age, traditional management methods alone are insufficient to meet the needs of businesses. Through information-driven insights, departments should collaborate to achieve knowledge sharing and resource optimization to cope with complex risk environments. This not only effectively improves the company's responsiveness but also enhances its competitiveness in the market.
Growth Diverges Among Major Economies
According to IMF forecasts, among the eight developed economies—the United States, Germany, France, Italy, Spain, Japan, the United Kingdom, and Canada—only three are projected to achieve economic growth exceeding 2% by 2025. Among the eight emerging market economies—China, India, Russia, Brazil, Mexico, Saudi Arabia, Nigeria, and South Africa—only four are projected to achieve growth exceeding 4%. Developed economies are showing a clear trend of "strong US, weak Europe." The US, benefiting from strong consumer demand, a robust labor market, and seizing opportunities presented by artificial intelligence, is experiencing economic growth exceeding its potential growth rate. Meanwhile, the Eurozone's manufacturing sector and goods exports remain weak, resulting in a weaker-than-expected economic recovery. The growth prospects of the region's leading economies, Germany and France, are worrying, with growth rates projected to be below the Eurozone average. The growth prospects of developing economies are also concerning. Although developing economies experienced their fastest economic growth since the 1970s in the first decade of the 21st century, growth momentum has gradually weakened since the 2008 global financial crisis, and they are projected to face their worst long-term growth prospects in the first 25 years of this century by 2025. The process of developing economies catching up with the income levels of developed economies is slowing, and the gap between rich and poor is widening further.
Multilateral cooperation is key to solving problems.
The IMF emphasizes that multilateral cooperation is crucial to curbing global economic fragmentation, maintaining growth and stability, and addressing global challenges. The "Global South," represented by the BRICS countries, continues to rise, becoming a promising force for optimizing international economic and financial governance. At the beginning of 2025, with Indonesia becoming a full BRICS member, the BRICS countries expanded to Southeast Asia for the first time. In addition, Kazakhstan, Malaysia, Cuba, Bolivia, Uganda, and other countries also became BRICS partners. "Greater BRICS cooperation" is showing vigorous vitality, its value is continuously increasing, and it has become an important force driving world economic development and the evolution of the international order.
Two conflicts have dragged on and escalated, with various forces locked in a protracted struggle.
The Russia-Ukraine conflict has dragged on and escalated amidst the debate over "war versus peace." With Trump's return to the White House, the variables in the Russia-Ukraine conflict have significantly increased.
Peace talks are difficult; the two sides have vastly different positions
Russia and Ukraine still have significant differences on many issues, making it difficult to "sit down at the negotiating table." Russia advocates negotiations based on a new territorial reality and guarantees Ukraine's neutrality, non-nuclear status, and non-alignment, while ensuring it does not join NATO. Ukraine, on the other hand, insists on the withdrawal of Russian troops from Crimea and Donbas, and seeks security guarantees from the West, while also demanding accountability from Russia for the war. Against this backdrop, Trump has changed his tune, stating his desire to resolve the Russia-Ukraine conflict within six months.
Before a comprehensive ceasefire, the conflict still carries the risk of escalation
Both Russia and Ukraine are well aware that "gains not secured on the battlefield are unlikely to be obtained at the negotiating table." Although ceasefire negotiations have been put on the agenda, both countries seem unwilling to abandon the idea of escalating the conflict to gain more bargaining power. As a result, the situation on the Russia-Ukraine battlefield is likely to escalate further.
A ceasefire between Russia and Ukraine is merely a superficial solution and cannot resolve deep-seated contradictions
The essence of the Russia-Ukraine issue involves the complex and enormous issue of reshaping the European security architecture. Following the outbreak of the Russia-Ukraine conflict, Sweden and Finland joined NATO, altering the European security landscape and significantly increasing Russia's insecurity, further deepening its contradictions with Europe. Based on the currently revealed "Trump plan," the US approach to resolving the Russia-Ukraine conflict is likely to be to pressure Ukraine to achieve an on-site ceasefire. The Russia-Ukraine conflict may revert to the "Minsk model," becoming a "frozen conflict." This plan fails to resolve the underlying contradictions of the Russia-Ukraine conflict. In the foreseeable future, the rivalry between Europe and Russia will continue.
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