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Intensifying US-Chinese rivalry will increase pressure on Germany to support a more hawkish US geo-economic policy. The new ­German government should give Washington support in as far as US policies seek to create an economic level playing field vis-à-vis China. Given its dependence on international trade and investment, Germany should seek to resist a broader politicization of inter­national economic relations.

The economic fallout from the war in Ukraine has been very significant. The consequences of a war in East Asia involving the United States and China would be much worse. And even if a Sino-US military confrontation can be avoided, geo-economic conflict between the two powers is going to intensify. Washington will put increasing pressure on Germany and Europe to align their policies with Washington's geo-economic strategy.

Without a sound economic foundation, political and military ambitions cannot be sustained. This also applies to the geopolitical competition between the United States and its rivals. So far, America and its allies are economically ahead of Russia and China. But where Russia's long-term outlook is weak, China's economic might is rapidly increasing. Despite the war in Ukraine, Washington will have to focus its resources on Asia. In Europe, Germany, with its large financial and economic base, should lead on military spending and enhanced security.

In this article, the authors construct a pipeline to benchmark hierarchical risk parity (HRP) relative to equal risk contribution (ERC) as examples of diversification strategies allocating to liquid multi-asset futures markets with dynamic leverage (volatility target). The authors use interpretable machine learning concepts (explainable AI) to compare the robustness of the strategies and to back out implicit rules for decision-making. The empirical dataset consists of 17 equity index, government bond, and commodity futures markets across 20 years. The two strategies are back tested for the empirical dataset and for about 100,000 bootstrapped datasets. XGBoost is used to regress the Calmar ratio spread between the two strategies against features of the bootstrapped datasets. Compared to ERC, HRP shows higher Calmar ratios and better matches the volatility target. Using Shapley values, the Calmar ratio spread can be attributed especially to univariate drawdown measures of the asset classes.

The Biden administration has just issued its Interim National Security Strategic Guidance. The guidance document states the need to "build back better at home" and acknowledges that "international economic policies must serve all Americans" - a theme often referred to as "foreign policy for the middle class". While the interim guidance does not preclude cooperation with China in selected policy areas, it is unambiguous in considering China a strategic competitor. The prospect of intensifying China-US geopolitical and (geo)economic competition is bad news for Germany, which has high value trading and investment relationships with both countries.

Präsident Joe Biden regiert ein gespaltenes Land, in dem der politische Kompromiss schon länger keine Tugend mehr ist. Während die Republikaner über die Zukunft ihrer Partei streiten, werden sich die Demokraten haushaltspolitischer Finessen bedienen, um Reformen anzustoßen und die oppositionelle Blockadepolitik im Kongress zu umgehen. Lediglich in der Außenpolitik herrscht überparteilicher Konsens, härter gegen China vorzugehen. Das stellt vor allem Deutschland vor große Herausforderungen.

Mit dem Einzug von Joe Biden ins Weiße Haus sind in Deutschland viele Hoffnungen auf eine Verbesserung des transatlantischen Verhältnisses verbunden. Vor allem in der Außenpolitik sind die Erwartungen berechtigt, denn Biden will verloren gegangenes Vertrauen zurückgewinnen und die Zusammenarbeit mit Europa vertiefen. Biden steht auch für die Hoffnung auf Rückkehr zum Multilateralismus und einer regelbasierten internationalen Ordnung. Doch in der Handels- und Klimaschutzpolitik werden sich wohl zunächst nur der Ton, aber nicht die Fakten ändern. Zudem wird ein voraussichtlich republikanisch dominierter Kongress viele von Bidens Vorhaben vereiteln. Hier analysieren unsere DGAP Expertinnen und Experten die Erwartungen, Chancen und Hindernisse in den wichtigsten Politikfeldern.