[Long Read] The Big Year: 22 Global Stories We Shall Be Chasing In 2022

After an eventful 2021, what omens does the year 2022 hold for global politics, economy, and civil society?

The pandemic entered its second year, with the Delta variant and ended with Omicron, decimating lives at a micro level and even some nations at a macro level.

The low interest rates gave the world stock markets the buoyancy that many found unexplainable, and the supply chains constrained businesses across the world, further exposing the vulnerabilities of an otherwise settled global economy.

President Joe Biden’s first year as the leader of the free world ran into troubles and China’s Xi Jinping secured the political validation for a lifelong term, worrying leaders in the West.

India, to the disbelief and dismay of most foreign observers, managed the world’s biggest and most successful vaccination drive, administering over 1,400 million doses, and in the neighbouring region, Pakistan’s economy continued its free fall and Afghanistan saw the infamous exit of American forces, one that will be etched in the darkest pages of history, and the consequent takeover of Taliban, resulting in a nation starved and betrayed.

Apple, surprisingly, disappointed its worshippers with the new range of iPhones yet the investors went home rich, and Facebook recoined itself to ‘Meta’, signalling the arrival of a new age of internet. A brave new world, reckless in definition for many traditionalists, ushered the bull run for cryptocurrencies and NFTs, and the string of stories goes on and on.

As President Bartlet from ‘The West Wing’ would ask, ‘What’s Next’, and what are the global stories we would be chasing in 2022, and why are they important?

1. The Struggle For Semiconductors Is Real

Who would have thought that an industry that has raw materials thousands of times smaller than a virus would have been the main priority for policymakers and world leaders in the middle of a pandemic?

In January 2021, the average waiting time for a chip went up by six days, and in the succeeding month, by another week, thus pushing the waiting time to 15-weeks hampering trade across sectors worth hundreds of billions of dollars.

The horror did not end there for countries without a domestic manufacturing hub realised they were sitting on a ticking time-bomb for supply chains as most chip designers and semiconductor firms were relying on TSMC for their orders, the same company that would be the first victim of an imminent China-Taiwan conflict.

In 2022, the hefty investments committed by India, United States of America, and Europe would be formalised through free trade agreements with the likes of TSMC, Intel, and Samsung.

Alongside, China’s $1.4 trillion investment over the next few years in the semiconductor industry to decouple its supply chains from the US after a round of sanctions under the Trump era would be on the watchlist of many.

2. Troubles In The Taiwan Strait

Not many in 2019 believed that the political takeover of Hong Kong by China was either feasible or possible, and yet, it happened. The National Security Law, introduced by the mainland China government, mandates arrest for any person, from any part of the world, for criticising the ways of the Chinese Communist Party, and yet, many fear, Hong Kong was nothing more than a dress rehearsal for the imminent Taiwan takeover.

President Xi Jinping has made no secret of his Taiwan temptation, stating how reunification was unavoidable, and any country, especially the US, would be ‘playing with fire’ if they were to interfere. To make matters worse for Taiwan, the hastened exit of the American forces from Afghanistan and Biden’s ambiguous and contradictory statements on US intervention in case of the Chinese invasion continues to alarm Japan, South Korea, and other small countries in the Indo-Pacific region.

While an all-out war in the Taiwan strait is off the cards for 2022, the island nation is bracing itself for more Chinese air patrols after a record number of intrusions, almost a thousand against 350-odd in 2020, in 2021. From the days of 1990s, when China was incapable of fielding an air force in the Taiwan strait, the country had as many as 56 incursions on a single day in October 2021. This year, the clouds of conflict will only grow darker.

3. Falling Like Dominos: China’s Real Estate Crisis

The parallels between the Lehman Crisis of 2008 and the Evergrande Crisis in China in 2021 were not missed by many. However, unlike the US government in 2008 aiming to set an example in morality by allowing Lehman to fail, the Chinese government opted for a more realistic view of the situation.

Contributing to more than 25 per cent of the GDP growth, China’s real estate and the sectors associated with it were sitting ducks as the Evergrande Group, with liabilities of over $330 billion, threatened to take the entire sector down.

For the latter half of the year, China’s biggest real estate group struggled with payments on its maturing coupons, and had to strike a balance between homeowners waiting for their properties and debt restructuring.

In 2022, China’s real estate developers will face dual challenges, one of raising funds and restructuring their debt to ward off the existential crisis they find themselves in, and two, to make pending payments on their maturing coupons.

Over $50 billion worth of overseas dollar bonds will mature in 2022, and the story of the slowing music in China’s once celebrated real estate market will be the focus.

4. India’s Political Semi-Final That Feels Like A Final

To an outsider, India’s perpetual election mode is certainly confusing, but to an observer, no year, since 2019, is as politically important as 2022, for this election cycle, starting in February itself, may decide the course of India’s growth trajectory for the rest of the decade.

There are two parties with their futures at stake. One, the Grand Old Party of India, as many call it, the Congress would be looking to establish its resurgence by winning in the smaller states of Punjab, Himachal Pradesh, and Uttarakhand.

In Gujarat, the GOP would want to dent the ruling party’s two-decade hegemony. A routing in these states would certainly accelerate the demise of the party under Rahul Gandhi and signal the emergence of TMC and its leader, Mamata Banerjee, as the new national opposition for 2024.

For BJP, its toughest and most significant battle will be in Uttar Pradesh under Yogi Adityanath. A big victory would certainly give the party enough momentum to win smaller states and eventually, the big national election of 2024. A win in Uttar Pradesh will not only give BJP a face for the post-Modi era, but also give it an opportunity to set the socio-economic agenda for the world’s biggest democracy for this decade and beyond.

5. The Emperor’s New Term And Tantrums

For China, the country, and the Chinese Communist Party, President Xi Jinping is the rightful derivation of the grand strategy that was pursued by Beijing in the wake of three events in close succession, also known as the ‘Traumatic Trifecta’ in many academic circles. These events were the protests of Tiananmen Square of 1989, the Gulf War of 1990-91, and the infamous collapse of the Soviet Union in 1991.

Each of these events acquainted China with the existential threat it faced, which was social unrest amongst a population corrupted by western ideas, the American military threat to China's ambitions in the Pacific, and the ideological threat it faced as the western model of democracy registered its final dent on Soviet communist with the fall of the Berlin Wall.

Today, more than three-decades later, Xi Jinping is preparing for a lifelong term, starting in 2022, with ruthless power and resources at his disposal. In his pursuit to establish a new world order led by China, Jinping is not only invested in correcting the course of the domestic economy through crackdown on tech, academia, and real estate, but also eye geopolitical supremacy in the Pacific region, Latin America, and Africa through economic coercion and military muscle.

6. Can The QUAD Evolve Into An Equivalent Of Asian NATO?

The year 2021 was a testament to the incapacity of the current world order to decouple from China. From the coronavirus outbreak in Wuhan to the political takeover in Hong Kong, and from the atrocities against minorities in Xinjiang to the wolf-warrior diplomacy against the European States, the inaction and silence of Western states demonstrated the free run China enjoys in contemporary geopolitics.

However, in March 2021, the leaders of the US, India, Australia, and Japan came together for the virtual summit of the QUAD, almost seventeen years after it was first envisioned in the wake of the 2004 Tsunami, and questions were asked if there was finally a NATO equivalent in the Pacific to curb China.

Come 2022, and the QUAD needs to do more. Australia has been in a prolonged trade and tariff war with China. Japan senses alarm as China flexes its muscles around Taiwan. India has been in a standoff for more than a year now in the Himalayas, and for the US, a new Chinese world order threatens its interests in Europe, Latin America, and Africa.

Can the four nations extend the QUAD to include ASEAN countries, or chalk out a plan to economically decouple from China, or have a plan of action that’s more than just headlines?

7. Bitcoin, NFTs, And Everything Vice

For any traditional investor, a pandemic year and consequently excessive liquidity in the markets is the starting point of inflation, and yet, for the year 2021, gold, as a hedge against the rising prices, dropped 5 per cent.

In the brave new world of cryptocurrencies and NFTs, the promise of decentralised internet and a metaverse built on the principles of Web3, investors enjoyed the most astonishing bull run in the streets of crypto mania.

Even though Elon Musk’s tweet and China’s ban on the mining of cryptocurrencies added to the volatility of the bitcoin and several other cryptocurrencies, there was a 50 per cent appreciation in the price of the bitcoin, and NFTs worth billions of dollars were sold. 360,000 owners, holding 2.7 million NFTs, valued at around $40 billion to be precise.

Come 2022 and the bigger question is that can crypto mania sustain? Yes, the pandemic and work-from-home life with excess money in the hands of many millionaires have created a market for imaginary commodities that are being built for a world that does not exist yet, but will bitcoin and NFTs continue to sideline gold and other traditional hedges? Will China and even India, possibly, banning cryptocurrency arrest this bull run, or are we in for the biggest Ponzi scheme in the history of finance?

8. The Soaring Giants Of Silicon Valley

For the players from Silicon Valley, the pandemic has been an enabler for a bull run many would not have anticipated in April 2020. In the last one year, the stock price of Apple has soared by more than 37 per cent, for Facebook, now Meta, by more than 25 per cent, for Google’s parent company Alphabet by more than 67 per cent, for Microsoft by more than 54 per cent, for Netflix by more than 15 per cent, for Amazon around 5 per cent, given the high value of its single share.

Together, the five companies minus Netflix added close to $2.5 trillion to their market cap with Apple coming close to hitting the $3 trillion market cap target. Interestingly, the chip shortage that impacted the automobile industry did not dampen the spirits at Apple and Microsoft, even though iPhone shortages were widely reported.

Come 2022, and the rising interest rates would be on the stock calculators of every trader, as an imminent market correction unfolds. The question is will the dream bull run of the Big Tech finally come to an end, and will Apple be able to overcome the impact of chip shortages, and will the market bears finally get the better of Netflix, and what Facebook’s transition to the Metaverse will be like, and will the narrative of breaking up the Big Tech be on the minds of the US Congress?

9. Tehran Threat Grows As The Sun Sets On JCPOA

It all started when US President Donald Trump, in May 2018, declared that he would walk out of the JCPOA or the Joint Comprehensive Plan of Action. The agreement between Iran and the US, the United Kingdom, Russia, the European Union, France, China, and Germany, the JCPOA, or the Iran Nuclear Deal, enabled Iran to attain economic relief in exchange for its nuclear ambitions.

Today, more than three years later, attempts are being made to salvage whatever is left of the JCPOA. Without the blessings of the hardliners from Tehran, the deal was doomed from the beginning, and with Trump’s stance, it all went to the dogs, literally.

In Vienna, negotiators from all sides are trying to scrap together a solution to restore the status quo, but a nuclear crisis encompassing Saudi Arabia and Israel looks imminent in 2022.

For the US, the problems are plenty. The election of a new president, a hardliner cleric, complicates negotiations with the US. The nuclear programme of the country is already advancing, drawing it closer to accumulating weapons grade enriched uranium, as stated by the country’s foreign minister in 2019.

Iran, reluctant to get back to the negotiating table, is already demanding a guarantee of no unilateral withdrawal in the future on the part of the Americans, and a reversal of trade sanctions for them to undo the nuclear gains they have made. Clearly, a diplomatic deadlock with the peace of the entire Middle East at stake.

10. The Year When The Pandemic Becomes A Part Of Our Lives

Almost two years ago, the city of Wuhan in China was put on a lockdown as the spread of an unknown virus threatened the local population. Lockdown, seen as the tactic of a Chinese-like nanny state once upon a time, has become a refuge for the governments world over, much to the dismay of businesses and workers.

Twenty-months since the pandemic hit Europe, America, India, and other parts of the world, there is a prevailing reluctance to accept the virus as a part of our lives, even after a largely successful vaccination drive in the most populated countries, including India.

While the nightmares of the Delta variant continue to haunt policymakers across the globe, Omicron, the first variant of threat post the vaccination drive, is already frightening the governments. In some places, as many as six booster shots are being recommended, and it is only a matter of time before a daily shot is recommended with the morning coffee.

Will 2022 be the year when we finally decide to live with the Covid-19 virus, or will curfews, lockdowns, and other policy shenanigans from 2020 and 2021 continue to haunt us this year as well? This year will also impart more clarity on how the booster business shall work, and how vaccines will have to evolve with the threat and variants of the virus.

From here, the best case scenario is for the world to attain pre-pandemic lifestyles by the end of the year, or else, clearly, we are in for a long haul of economic uncertainties, and that will be far more difficult than the virus itself.

11. The Intricate Economics of Clean Energy Transition

The transition from fossil fuels to clean energy is dirty business, especially if one factors in the geopolitics and supply chain considerations around the rare earth metals that would be indispensable to the future of renewables.

As the world marvels over the development of electric vehicles, inculcation of solar energy in developing countries like India, and the employment of other sources of renewable energies, a bull run previously unheard of will be witnessed in the commodities sector.

Copper, Cobalt, Nickel, Lithium, Chromium, Zinc, Aluminium, and other rare earth metals will be deployed in varying permutations and combinations in manfacturing processes. For instance, Steel, Aluminium, Silver, Copper, and Polysilicon are essential to the production of solar panels while Lithium-ion batteries will mainly use Copper, Aluminium, Lithium, Cobalt, Nickel, and Manganese.

However, this brave new world of clean energy is susceptible to supply chain constraints. Post-2020, the price of solar panels has witnessed an upward trend due to polysilicon prices. Ironically, the world is counting on China to meet the growing demand for polysilicon. Similar trends in the prices of steel, a key raw material for wind turbines, is also hurting the prospects for growth.

The focus would be on Lithium, shortage of which is expected to last across 2022, and how it impacts the companies dealing in EVs. Couple this with the trade war between US and China and there lies the next big trade faultline after semiconductors.

12. Omicron, Oil, And OPEC

The growing threat of Omicron is a testament to the volatile future of oil prices and OPEC. While the pandemic inserted a new lease of life into an organisation that was beginning to come apart, the struggles for OPEC nations are far from over.

While the OPEC nations have cut production across 2021, how will they sustain this cooperation in the face of imminent pandemic disruptions and growing renewables remains to be seen.

On the other side, if the economy does go back to the pre-pandemic times, how oil prices might contribute to inflation across the world, as it did in the US in 2021, will also be important. For OPEC, the challenge would be balancing oversupply and stockpiles with soaring prices.

13. Honey, We Shrunk The Interest Rates…Too Much

In December 2021, the serious people running the central banks across the world realised that they could no longer ignore inflation, and thus, what appeared to be a coordinated response from Federal Reserve, European Central Bank, Bank of England, and central banks in Norway, Chile, Russia, Japan, amongst other countries was them hinting to push the rates up, with some even doing it.

In 2022, all eyes will be on the Federal Reserve and the plausible virus variants, given the Fed has announced that it will hike the interest rate thrice. The tech stocks have already begun responding to the news of imminent rate cuts and one wonders if these are the ominous signs one was looking for a market too heated.

14. At God’s Mercy: The Freefall of Taliban And Pakistan

From fighting the very ideology that Taliban represents, most western states are now looking to negotiate with the new bosses of Afghanistan, even as citizens, especially women, are abused in the most heinous of ways. The country is without resources, people are without food, and children without a future, and yet, the west is slow to act.

A similar collapse, but at a far slower pace, is unfolding in Pakistan. Under Prime Minister Imran Khan, the currency has dropped 30 per cent in value against the dollar and is expected to continue its freefall. Inflation is beyond control even as people struggle for routine items. Even though elections are not due until 2023, will Imran Khan’s final act unfold in 2022?

15. Russian Roulette On The Cards?

After North Korea, Iran, and Taiwan, there is trouble brewing in the Balkans too. In the final weeks of 2021, Moscow has made it clear to its counterparts in the West that the NATO expansion cannot go on, demanded a curb on the infrastructure and installation of new weapon systems in areas that constitute former Soviet Territory, a stop on the military aid to Ukraine, and a complete ban on intermediate-range missiles in Europe.

While Vladimir Putin would not be reckless, or as is expected, to deploy a full-scale military invasion of Ukraine in 2022, time and diplomatic options for the West are running out. The year has begun with Russia installing more than 100,000 troops and heavy weaponry on the Ukrainian border. Also, would the US risk sanctioning Russia thus furthering its closeness with China?

16. Will A Possible Republican Resurgence Signal A Trump Comeback?

After India, it is the US that enjoys being in a perpetual election mode, but the Midterms this year are significant for two reasons. One, they could mark the comeback of Trump as Republicans look to strengthen their numbers in both the houses of Congress.

In America, the party in power tends to do very poorly in the first midterms, and in the last 100 years, the ruling party has picked up seats in the first midterm elections only in 1934, 1998, and 2002.

Two, the 2022 elections will be conducted after redistricting, and thus, the states traditionally voting red will displace the blue and vice-versa. Unlike India, redistricting is left to the states, and therefore, these midterms will only deepen the faultlines of an already fractured society. Bottom line, however, is that will Trump start gaining ground again this year for 2024?

17. To Be Or Not To Be In Beijing

Merely a month from now, Beijing will be hosting the 2022 Winter Olympics. However, the sporting event has already been politicised with some countries stating that while they will send their athletes, they would not send their government officials.

These include the United States, Australia, Canada, and the United Kingdom. Many human rights groups across the world are already using the event to demand accountability and answers from Beijing for its actions in Xinjiang, and more recently, in Hong Kong.

While China would look to use the event to further its posturing as the new global leader, especially for countries from Africa and South America, the focus would be a new diplomatic crisis may emerge further stressing the US-China relations.

18. Central Bank Digital Currencies: More Application, Less Theory

Beyond politics, the Beijing Olympics in February are important for one key reason. For the first time, a central bank digital currency (CBDC) would be tested for scale as China will distribute digital yuan to foreign visitors.

For a few years now, faced by the buoyant market for cryptocurrencies, policymakers across the world, including India, have been deliberating a digital currency issued directly by the central bank.

In India, a bill to ban cryptocurrency is also rumoured to include RBI’s plan for a digital currency. The CBDCs could usher in the new age of banking with sector-specific monetary policies and credit expansion, a revamp of the traditional forms of banking, but most importantly, the supremacy of digital yuan across the world where China is heavily invested through the Belt and Road Initiative.

19. Will The World Graduate Towards More Resilient Supply Chains?

One of the biggest challenges to a recovering global economy last year (2021) was the sky-rocketing container rates. One, they were hard to find, and two, for the ones who did manage to find one, found it difficult to afford.

While the prices have cooled-off since the peak in September-October, they went 10 times higher than the pre-pandemic rates for a 40-foot container shipping from the West Coast in the US to China. The transit time between the two countries doubled between January 2020 and December 2021, from 30 to 60 days.

The problems are not restricted to the sea for companies will also look to diversify their supply chain in order to make them more resilient to shocks. Thus, for many developing economies, including India, a fortune awaits as the big corporations of the West hunt for a new home.

20. Will We Finally Get To See The Apple AR/VR Headset?

Apple’s tryst with a $3 trillion market cap is almost a certainty for 2022, but what beyond it? For the past year, the stock price of Apple has witnessed an upward trajectory as investors look forward to the rumoured Apple AR/VR headset. Touted to be the next big thing after the iPhone more than a decade ago, a successful AR/VR revolution from Apple could unleash an array of services, each going to become separate cash cows for the company.

Moreover, the company will look to challenge Facebook and Alphabet, also working on the metaverse phenomenon. Apple’s headset is rumoured to have a September launch, along with a new range of iPhones and other accessories.

21. NASA Will Gatecrash An Asteroid Party

The year 2022 will bring us many exciting new missions from space organisations across the world, but the most interesting one is NASA’s DART or the Double Asteroid Redirection Test Mission. The mission will test a technique that has already been a part of many sci-fi stories, that of deflecting the trajectory of an asteroid by crashing a spacecraft into it, or what NASA calls it the kinetic impact technology.

The DART mission is not designed to destroy the asteroid but to deflect it from its original trajectory, in case it may hit the earth. The spacecraft will crash into an asteroid roughly 160 metres in size, bigger than the Pyramids at Giza, at a speed of 6.6 km/s, and the interception is predicted for September 2022. Assuming the mission is a success, this will change the way space organisations look at tackling asteroid threats from outer space.

22. The Streaming Business Is About To Get More Serious

The pandemic has put the development, growth, and adoption of the OTT platforms into a hyper-drive mode, and there is no way the money taps are being closed for this industry. Already, the top eight media groups in the US have committed more than $110 billion for production in 2022.

Disney alone is expected to spend in excess of $20 billion on new content as the market for its various franchises, including the very famous Marvel that registered the first billion-dollar box office success in the post-pandemic world, goes beyond the US.

Netflix is also expected to invest more than $12 billion in 2022, but will the subscriber growth justify the rising debt of the company and how will it fare against the rising tide of players in the US and other local ones in markets across the globe is what investors would be asking at the end of 2022.