Economy Government International Affairs

The Key Players in Global Finance and Trade

Money makes the world go around. Whether you’re willing to accept that fact or not, it is a fact that we all understand. It’s actually quite simple though, each and every person on this planet contributes in one way or another to the triangular system through which values flow. The very richest people in society use their own financial assets to strategize and shift their proverbial weight to best suit their personal interests – be they selfish or selfless in nature. On the more abundant extreme of the scale, the poorest of the poor are used by politicians and financial strategists as pawns for policy which ultimately directs the capital flow where ever the managing interests lie.

At the end of the day, the rich get richer and the poor stay poor – barring a very exceptional group within the poorer populations who can understand how to battle this upstream fight. This being said, the foundational aspects of a prime financial environment include relatively relaxed regulations, rule of law and enforcement, and convenient access to large and immerging markets.

For example, established financial hubs like New York City, London, Tokyo, Shanghai, Hong Kong, and Singapore all present these coveted characteristics to attract such high investment and promise. The top consumer markets in the world are the United States, European Union, China, and Japan, and all of the aforementioned cities have easy access to these consumer markets. However, even though Shanghai has direct access to the vastly in-demand Chinese market, the high national regulations and rigid laws and policies deter large amounts of foreign investment.

For hundreds of years, London has served as the central hub of trade and economic transaction. As the British Empire grew and then diminished, London has served as the headquarters for some hefty portions international trade and in consequence, for global financial systems. From the early modern period beginning in the late 1400s, financial assets in the city were largely transferred from the church to private ownership, initiating a few hundred years’ span of rapid economic deregulation and massive expansion through colonial efforts both east and west.

Gaining preference as the major North Sea port in the 1500s, London became a prime destination for international trade and commerce. Further, with the establishment of the British East India company, as well as several similar foreign trading companies, exploration and colonization of foreign lands had become easier than ever, and much of it was run through British corporations and infrastructural support systems. In practicality, British ownership and influence stretched from the North American colonies, now established as Canada and the United States, some of the West Indies, through to East African colonies, India, Pakistan, Australia, New Zealand, and notably, Singapore and Hong Kong. As is well known and documented, much of the trade and commerce that took place during the early modern periods was not a mutual relationship, but more so of a one-sided exploitive nature. Although the foundations of much of global trade and finance lacked any kind of moral or humane accommodations, those practices of international exploitation and essential pillaging set up the system of global financial dominance that is in place to this day.

Derived from the influence of the expansive British Empire, New York City, Hong Kong, and Singapore have risen to the heights of the global system of finance and trade. During the American Revolution, what is now New York City served as a central battleground, and in the wake of independence, the city’s population grew from 60 000 to 3.4 million over the 19th century alone. With several waves of immigration to the city over the course of modern history, massive scale developments and innovations were taking place in the city in all industries and trades.

It is clear that the distinctly large population in such a condensed area forms the foundation of high productivity in New York City. With high productivity comes an increasing likelihood for innovation and exponential growth in all facets of life. In a similar sense, the huge population allows the city to be an extraordinary consumer market, supporting local businesses and encouraging foreign operations to develop infrastructure and distribution methods nearby. Politics, commerce, and social progress are three very important characteristics which categorize New York City as an ideal model for growing and recreating idealistic systems on smaller or larger scales.

More recently, Singapore and Hong Kong have separated themselves to be among the top financial centers of the world. Although this is in part due to their proximity to China, which has experienced massive growth in recent years after creating a very favourable, albeit controversial, manufacturing environment.

Aside from the China factor, both Singapore and Hong Kong have also effectively arranged their domestic economic and financial systems to encourage investment and attract foreign business, ultimately supporting their respective economies’ surges into the heights of the global standards.

The overarching foundation of a successful economy and financial base must involve efficient and accommodating maneuvers in all of the political, economic, and social spheres of public life. In essence, the perfect financial environment must be supported by the federal government through effective policy, supported by banks, businesses, and other monetary institutions, and also supported by the public by way of large consumer markets in reasonable proximity to allow for maximized business reach.

1 comment on “The Key Players in Global Finance and Trade

  1. Andrew

    …..so money IS IMPORTANT then…. 😊😊

    Like

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