FirstFT: the year ahead

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This year we have decided to do something a little different for the special edition of the FirstFT year-ahead email. We asked editors and writers from across the FT’s newsletters to make their predictions for 2021. From energy to tech via China and the world of ESG investing, here are some of the dominant stories and themes to look out for next year.

Mass vaccinations raise hopes for a post-pandemic future

The UK’s sudden move to tighten lockdowns — aka ‘cancel Christmas’ — in the face of a fast-spreading variant of the virus is just the latest example of governments’ firefighting in the face of a virulent disease that has claimed more than a million lives. Markets’ hopes for a swift economic bounceback may be a touch optimistic. And some forms of restrictions such as mask-wearing are likely to still be with us in the autumn. But a successful mass vaccination programme will at least give policymakers and businesses the ability to plan for a post-pandemic future — Darren Dodd, global health writer and author of Coronavirus Business Update.

The results of energy’s pandemic recovery will be laid bare

This year was seismic for the energy sector. The pandemic crippled oil demand and sent the industry into unprecedented turmoil. Next year will be equally fascinating. Will people take to the roads and skies again — or has consumption been irrevocably changed? Will the battered US shale patch manage to pull itself back on to its feet? And will it bow to investors’ growing ESG demands? And we’ll see how Joe Biden’s plans for the US energy sector help or hinder recovery. — Myles McCormick, US energy reporter and Energy Source author.

Oil pumps are seen, as oil and gas activity dips in the Eagle Ford Shale oil field due to the coronavirus disease © Reuters

Learning to live with ‘One World, Two Systems’

In 2021 we will have to learn to live with the ‘One World, Two Systems’ problem, in which China and the US have very different political systems. The questions are whether the US, EU and other liberal democracies will begin to forge a shared alternative, and establish a 21st century framework for things such as trade, tax, and tech regulation. I think there is a healthier middle ground to be found between neoliberalism and tribalism. — Rana Foroohar, global business columnist and Swamp Notes author. Sign up to Rana’s newsletter, written with Edward Luce, here.

Inflation threatens a return for the first time this millennium

Will inflation finally return in 2021? If a successful vaccine rollout ends the pandemic and restrictions on economic activity are removed, it is certainly possible that pent-up consumption and a flood of liquidity could push demand far beyond economies’ capacity to produce, driving up inflation to levels not seen this millennium. But it is a safe bet that even in the best-case scenario, many households and businesses will have suffered such big losses that it will discourage extravagant spending and hold companies back from investing in long-term productive capacity. The recovery has to feel reliably solid for some time before caution recedes. — Martin Sandbu, European economics editor and Free Lunch author. Sign up to Martin’s email here.

China’s Communist party centenary celebrations risk being overshadowed by uneven recovery

China will celebrate the 100th year since the founding of the Chinese Communist party in 2021. However, the recovery from the Covid-19 pandemic has been extremely unequal in the country, with low-paid workers left out. This presents future risks for the CCP which has built its legitimacy on the claim that it has lifted the lives of the worst off. Executives at the top of the country’s more powerful businesses have much to fear: regulators have vowed increased scrutiny for China’s tech giants. And the party itself faces diplomatic crises with the US, Australia, India, and many others. — Yuan Yang, deputy Beijing bureau chief. Yuan is a contributor to Trade Secrets, a daily email about international trade and globalisation.

Tokyo Olympics has the potential to be the world’s coming out party

The big story next year in the world of sport will be the rescheduled Olympic Games in Tokyo — set for summer 2021. While there remain doubts as to whether the world’s biggest sporting event can even take place, Japan has already spent, by some estimates, $25bn on preparations and is desperate to go ahead. The Olympics was supposed to showcase the country’s re-emergence on the global stage. If a smooth rollout of a vaccine leads to safe international travel for athletes, with fans able to sit next to each other in Tokyo’s new stadiums, then the games will feel like a great coming out party for the world after coronavirus — Murad Ahmed, sports editor and Scoreboard author. Sign up here to receive the weekly Scoreboard email.

Tokyo’s Olympic Games have been rescheduled for summer 2021 © AP

Battles loom over new ESG regulations and accounting standards

A couple of years ago, it seemed that ‘green’ news was all about Greta Thunberg. No longer. In 2020, the world of environmental, social and governance issues accelerated dramatically and the corporate momentum — and vast money flows — look set to intensify in 2021. In the next year we are likely to see more battles over accounting standards and new financial products. And new EU and US regulations will further accelerate change as the investor and employee zeitgeist around ESG continues to shift. — Gillian Tett, US editor-at-large and Moral Money founder. Sign up here to receive the email.

Supercharged shift to digital culture set to continue in 2021

Tech advances have been supercharged by a pandemic that forced millions to work from home and embrace a digital culture in 2020. That acceleration should continue in 2021. Expect video conferencing services to compete on offering more immersive experiences and ecommerce to continue to gain share from physical retail. Fast connectivity has become crucial and satellite launches by SpaceX and OneWeb, the growth of 5G and spread of fibre will enhance services and digitally enfranchise millions. There will be fewer big tech IPOs but expect the likes of games platform Roblox, scooter service Lime and trading app Robinhood to make their stock market debuts. — Chris Nuttall, author of the daily #techFT newsletter. Click here to subscribe.

Look to pharma and fintech for M&A deals in 2021

In 2021, we’re keeping our eyes peeled for the deals that define the moment: expect action in Big Pharma M&A, the Spac and tech IPO markets, plus China’s growing fintech sector. — Francesca Friday, Due Diligence reporter.

How will the arts grapple with the pandemic?

In 2020 we saw a lot of art that feels like it’s in draft form — TikToks, street art, sketches — but not a lot was fully formed. I’m curious to see how that changes in 2021: will we see artists grappling with the pandemic in film, music, visual art and literature? Or is it still too soon? — Lilah Raptopoulos, US head of audience engagement and Culture Call host.

How the world could change in 2021

In this video FT journalists make their predictions for the coming year. Chief foreign affairs commentator Gideon Rachman, Asia editor Jamil Anderlini, global business columnist Rana Foroohar, Latin America editor Michael Stott and Africa Editor David Pilling, give their views on the pandemic, US-China relations, key upcoming elections, and Brexit. (FT)

Happy new year to all our FirstFT readers. We will return on Monday January 4. If this email has been forwarded to you, hello. If you would like to receive daily updates please sign up to one of our three editions: FirstFT Asia, FirstFT Europe or FirstFT Americas

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Source: Economy - ft.com