conflict – Shanghai Metal Corporation

The dissolution of the Soviet Union is arguably one of the greatest geopolitical disasters of human history. It resulted in the rise of ethnic nationalism and ethnic based conflicts across Eastern Europe and Central Asia.

Many of the new countries had mixed Russian and local population and after centuries of repression under the Russian Empire, and later the Soviet Union, tensions were high. This is the basic history behind the current war in Ukraine.

Russia is backing the anti Ukrainian forces with both financial and military aide. As a result many European Union members have levied sanctions against Russia which have the potential to hurt all parties involved. As the 6^th largest exporter of steel there is a massive gap that will need to be filled and this is where China can not only make a vast amount of profit, but also improve relations with the EU.

The economic recovery in the EU is fragile at best and any major shock could end the recovery and cause a recession. This is of particular concern in Europe where many nations are dependent on Russia for their raw materials and mineral resources. As many EU members want to limit their dependence on Russia, China is presented with a great opportunity to become Europe’s new de facto supplier of raw building materials.

China and the EU are becoming more interdependent on each other and adding Chinese steel to the equation will only increase economic cooperation. Furthermore, as Russian sanctions begin to take affect all over Europe the governments of these regions will most certainly be grateful to any nation that helps them avoid another economic crisis.

Shanghai Metal Corporation has been following the developments in Eastern Europe closely and with great concern. We take the economic health of the EU and the world as a whole very seriously. One of our main products is structural steel and it will be an honour to supply the EU if and when the need arises.

For our full list of products that we offer check out our website here. Be sure to join the conversation in our LinkedIn group, Facebook, Twitter and Instagram. Try also our new mobile application by scanning the QR code below.

(Jordan S.//SMC)

http://www.fool.com/investing/general/2014/07/21/russia-retreats-from-us-as-sanctions-begin-to-bite.aspx

http://www.issb.co.uk/global.html

http://de.bearing-news.com/ascat-technology-to-improve-steel-industry-product-quality/

http://www.euractiv.com/sections/social-europe-jobs/russian-steel-firm-threatens-eu-job-losses-over-sanctions-301721

http://www.cnbc.com/id/101855249

http://russianreport.wordpress.com/2012/05/09/day-of-victory-on-red-square/

Pictures: telegraph.co.uk, thevirtualtravelers.com, ukrainetrek.com, newsweek.com, ibtimes.com

The conspiracy theorists will surely agree that oil and conflict is closely correlated – but do the statistics back it up? Economists have attempted to quantitative describe the relationship between discoveries of large oil fields and the probability of conflict.

Dube and Vargas studied this effect in Colombia and found that due to the concentration of oil profits being with the owners, extortion and kidnapping for ransom increased accordingly. This was described as a rapacity effect where it was in fact the money, not the oil that attracted conflicts.

Micheals found after conducting a worldwide regression that oil that it is actually the opposite –the increased wealth and opportunities from building the oil refinery actually decreased crime, as the potential criminals were less economically incentivized to commit crimes. The assumption that oil causes conflict stems from the anomaly that conflicts that arise due to suspected oil reserves rather than actual ones.

So in fact the building of oil drills and refineries can be beneficial to the surrounding areas, and the assumption they hurt an area was suggested to be untrue.

Shanghai Metal manufactures Salvage tools for oil drilling similar to those mentioned. To find out more, please visit our website, LinkedIn, Twitter, Facebook and Instagram. Or you could try our new mobile app by scanning our QR code.

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