Introducing

Sharmila Whelan

The founder of Westbourne Research (www.westbourne-research.com), Sharmila Whelan is a seasoned Global Geopolitical-Macro Strategist with nearly three decades of experience advising buy-side clients on multi-asset investment strategies and asset allocations. Her career has been defined by her differentiated thinking, a deep understanding of the intricate connections between global geopolitics, macro and policy dynamics, and the Austrian business cycle approach to economic analysis. She has counseled governmental bodies such as the CIA, the US State Department, the British High Commission, DFID, and China’s NDRC.

Sharmila has held prominent roles in both London and Hong Kong, serving as Managing Director at Aletheia Capital, Director at Merrill Lynch Bank of America, Senior Economist at CLSA, and Asia Regional Economist at BP Plc. In 2022, Bloomberg recognised her as one of the UK's "12 New Expert Voices." She is a frequent media commentator on Bloomberg TV and radio, BBC World Business News, and CNBC, and is a sought-after speaker at high-profile events such as the Financial Times Wealth Summit and CFA UK & India conferences. Sharmila also contributes opinion pieces to Financial Times Professional Wealth Management and the Economist Group’s EIU.

Publications by Sharmila Whelan

• Global| Mar 09 2026

  Fiscal Divergence and Sovereign Risk in 2026

  United States & Europe

  In the United States—where the fiscal year begins in September—fiscal policy remains expansionary, with Trump’s One Big Beautiful Bill setting the overall policy direction.

  The European Commission projects the euro-area fiscal deficit at around 3.3% of GDP in 2026 and insists the year will not be one of fiscal stimulus. Whether this proves accurate remains uncertain.

  Within the euro area, Germany’s fiscal plans centre on a major investment push, including the €500bn infrastructure fund, alongside significantly higher defence spending. Germany’s Draft Budgetary Plan suggests the general government deficit could rise to around 4¾% of GDP, driven by spending on infrastructure, innovation, security and defence.

  France has also adopted a 2026 budget that reflects political constraints as much as fiscal priorities. Defence spending is rising, but the consolidation path is slower than previously envisaged. As part of a compromise with the left, plans to raise the pension age from 62 to 64 and to cut production taxes have been abandoned.

  Italy’s 2026 Budget Law includes measures worth roughly €22bn over 2026–28, though the deficit is still projected to narrow slightly to 5% of GDP in 2026, from about 5.4% in 2025.

  Spain, by contrast, faces less need for fiscal support and remains focused on consolidation as pandemic-era emergency measures expire.

  Taken together, fiscal policy across the euro area remains broadly restrained, though increasingly shaped by defence priorities. Even so, these developments appear modest when set against fiscal policy elsewhere—particularly Japan.

  Japan’s Expansionary Turn

  Japan’s government approved a US$135bn fiscal stimulus package in late 2025, the largest in years, aimed at supporting households and economic growth. Around US$118bn comes through general-account spending, with the remainder delivered through tax measures and related initiatives.

  The programme focuses heavily on household relief and strategic investment. Measures include utility and gasoline tax relief, subsidies and transfers to support consumption, and expanded investment in infrastructure, AI, semiconductors and other strategic sectors. Support for local governments and small and medium-sized enterprises has also been increased.

  The government is also considering a two-year suspension of the 8% consumption tax on food and drinks, though the proposal remains under debate.

  Asia: A Measured Fiscal Approach

  Compared with advanced economies, Asia’s fiscal position remains relatively strong, reflecting both smaller pandemic stimulus programmes and a longstanding preference for fiscal restraint.

  During the Covid-19 crisis, fiscal support in advanced economies averaged about 28% of GDP, while Asian economies averaged only 8.4% (Figure 1).

  by:Sharmila Whelan

  |in:Viewpoints
• Taiwan| Feb 06 2026

  From Foundries to Fortunes: Taiwan in the AI Era

  Taiwan stands to benefit disproportionately from the current AI-led global semiconductor upcycle. Its domestic semiconductor ecosystem has expanded at remarkable speed, more than tripling over the past decade—from about US$69bn in 2014 to US$166bn in 2024—and is estimated to approach US$200bn in 2025. This growth is no accident. Taiwan sits at the heart of the world’s most advanced logic-chip production, with demand increasingly driven by AI and high-performance computing. Its dominance reflects early specialisation, rapid scaling, and an unmatched ability to protect customers’ intellectual property.

  At the centre of this ecosystem is TSMC—Taiwan’s true national treasure—which continues to consolidate its lead at the technological frontier. While near-shoring projects in Japan, Germany and the US are often framed as diversification, in practice they reinforce Taiwan’s position rather than weaken it. TSMC’s latest commitment to build five additional fabs in Arizona illustrates this point clearly. Leading-edge R&D, pilot runs and sub-7nm process know-how remain anchored on the island. Overseas fabs are best understood as extensions of Taiwan’s production model, not substitutes for it.

  The foundry race is no longer about sheer scale but about leadership at the cutting edge—and that leadership still belongs to Taiwan. A November 2025 report noted that Nvidia sources 100% of its top-tier GPUs from TSMC, including advanced 3nm and emerging 2nm-class production. AI and high-performance computing now account for more than half of TSMC’s wafer revenue, with AI processors alone on track to reach around 20% of sales by 2028.

  Taiwan’s strength is not limited to foundries. Its fabless sector benefits from unusually tight coupling with domestic manufacturers, rapid design-to-manufacturing feedback loops, and a dense ecosystem in which suppliers, advanced packaging, talent and fabs are co-located. This structure enables faster iteration and innovation than is possible in more geographically fragmented semiconductor hubs.

  That said, the industry has become increasingly concentrated, and this brings risks (Figure 1). The foundry sector’s share of output has risen from 41.5% in 2014 to an estimated 63.4% in 2025. By contrast, other subsectors—IC design, packaging, testing and related activities—have seen their shares decline. The memory segment has shrunk particularly sharply, from 11.8% of output in 2014 to just 3% in 2025, leaving Taiwan heavily dependent on Korea in this area. IC packaging’s share has also roughly halved to around 7%.

  by:Sharmila Whelan

  |in:Viewpoints
• Global| Jan 09 2026

  The Price of the American Dream

  US voters have not waited for midterm elections—or even a full year—to register their dissatisfaction with Donald Trump’s turbulent return to office. In November last year, Democrats swept key state races in New York, Virginia, and New Jersey. The message from voters was unmistakable: rising living costs and the impact of higher import tariffs are biting hard.

  The affordability crisis is already reshaping America’s political landscape. The Financial Times examined the soaring cost of living in New York and the unexpected election of Zohran Mamdani, the 34-year-old Democrat to the office of the mayor. The numbers tell a stark story. Average childcare costs approach US$1,450 per month, yet only 14.5% of New York families can afford them. More than half of renter households spend at least 30% of their income on rent, and between 60,000 and 80,000 New Yorkers sleep in shelters every night.

  And New York is far from an outlier.

  Recently, a close friend visited us from Boston, and conversation inevitably turned to expenses. Even mundane purchases now come with sticker shock. A simple lunch—sandwiches for two—costs US$30 to US$35. When her German Shepherd needed an X-ray, the bill came to US$1,300; a CT scan was offered for US$3,000. Removing 11 trees from her garden cost US$9,000. She and her husband work in finance and are relatively affluent, so these examples are anecdotal—but they vividly illustrate how sharply costs have risen across the US.

  When she insisted on picking up the lunch tab during her visit to the UK, we did not feel too guilty. At £54 with wine (US$71), it was a bargain, even after accounting for the US dollar’s depreciation against sterling.

  Both the Financial Times article and these conversations raise important questions. How widespread is the cost-of-living squeeze? How much pressure is Trump under to deliver on his MAGA agenda? And how constrained is the Federal Reserve as it balances rising inflation against already-stretched households?

  Income and Spending: A Divided Country

  In 2024, the average American took home US$64,426 after taxes, according to data from the Bureau of Economic Analysis (Figure 1). Per capita disposable income exceeded that level in just 18 states. The District of Columbia topped the list at US$92,365, followed by Connecticut at US$80,694. In contrast, residents in 33 states earned less than the national average. Mississippi ranked last at US$47,831, with West Virginia close behind at US$50,444.

  by:Sharmila Whelan

  |in:Viewpoints
• Korea (Republic of)| Dec 05 2025

  Korea Holds Back—but Builds Strength

  We have been overweight Korean equities this year—and it has paid off, handsomely. The allocation decision was anchored in the business-cycle framework: three of five key indicators pointed clearly toward expansion at the start of the year. The cost of capital was supportive, the credit cycle was in a firm upswing, and money-supply growth was accelerating. The corporate profit cycle, though still technically in downturn, was already showing improvement thanks to strong balance sheets. The major drag was the investment cycle, which continued to lag.

  What has surprised us is the speed of the profit-cycle recovery, especially against the year’s backdrop. From Trump’s tariff war to domestic political turbulence following the impeachment of President Yoon Suk-yeol and the snap elections in June, one would have expected a more cautious rebound. Instead, the listed sector delivered a solid performance. Return on equity averaged 7% in the first three quarters, up from 5.6% a year earlier and nearly back to the seven-year average of 7.3%. EBITDA cash flow per share, free cash flow per share, and retained earnings all advanced. EBITDA rose almost 20% year-on-year, cash flow per share climbed 29%, and free cash flow per share swung decisively into positive territory.

  Central-bank data paint a similarly encouraging picture. Profitability and interest-coverage ratios have improved markedly for large corporates, even as debt-to-capital ratios inched higher. SMEs have seen some deterioration, but the stress is neither systemic nor alarming at this stage.

  And yet, despite these solid fundamentals, Korea Inc has continued to err on the side of caution (Figure 1). Companies tightened spending this year and delayed new investment plans. As a result, the investment cycle slid deeper into downturn: real spending on both facilities and construction has contracted for six consecutive quarters. Rather than expand capacity, firms have chosen to run down inventories and utilise existing manufacturing facilities more intensively. Operating rates have increased, allowing companies to meet rising shipments without committing fresh capital.

  by:Sharmila Whelan

  |in:Viewpoints
• India| Nov 05 2025

  AI Lag and Investment Stagnation Cloud India’s Outlook

  India remains an equity overweight, but the shine has faded from both its cyclical recovery and its structural growth story. Two issues stand out: the country is lagging badly in the AI revolution, and the corporate investment cycle—despite strong macro conditions—has failed to ignite.

  AI: A Race India Is Not Winning

  India has attracted several high-profile announcements. Google plans to invest US$15bn over five years to build an AI data centre. Microsoft has committed US$3bn over two years, Amazon US$12.7bn by 2030, and the government’s latest budget allocates US$1.25bn to develop the domestic AI ecosystem.

  On paper, this sounds substantial. In reality, it pales next to the intensity of global AI investment. The big four US hyperscalers—Amazon, Microsoft, Google and Meta—are currently spending around US$90bn per quarter on AI. Even compared to peers like China, the gap is stark. Over the past decade, state-backed venture capital in China has channelled roughly US$912bn into strategic industries including AI. China now hosts over 4,500 AI enterprises, accounts for 45% of global computing power, filed 60% of AI patents in 2024, and is expected to invest US$85–98bn in AI capex in 2025 alone.

  India’s GenAI Landscape: Growing, but Too Slowly

  The domestic AI start-up ecosystem is expanding. As of 1H25, India hosts more than 890 generative AI start-ups, up from 240 a year earlier, with cumulative funding of US$900m. The funding mix, however, shows a narrow focus: 88% into AI infrastructure, 8% into services and only 4% into applications. Karnataka dominates with 39% of AI start-ups, followed by Maharashtra (14%), Delhi (9%) and Telangana (7%).

  India’s AI market is forecast to grow at a 25–35% CAGR, reaching roughly US$17bn by 2027. NASSCOM, the industry body for the tech sector, estimates data and AI could contribute US$450–500bn to GDP by 2025––approximately 10% of the country’s original US$5trn target.

  But scaling remains slow relative to the global frontier. India’s AI spending is small, investor appetite is weak, and the ecosystem faces structural barriers.

  The Challenges

  1. Lack of Regulatory Clarity Policy uncertainty has deterred funding, especially for deep-tech. Capital inflows remain limited, forcing start-ups to operate under severe funding constraints. Although 25+ new GenAI firms launched last year, both seed and late-stage investment have contracted sharply.

  2. Talent Is Scarce Demand far exceeds supply. NASSCOM estimates India suffers one of the world’s highest AI talent shortages—around 50%. With insufficient advanced training capacity, scaling becomes difficult.

  3. Government Response Is Reactive Thus far, policy has focused on short-term fixes and pilot initiatives. What is missing is a coordinated long-term strategy. According to NASSCOM, India needs large-scale public–private co-investment to de-risk innovation. But resistance to policy change and bureaucratic inertia remain barriers.

  India is positioned to participate in the AI economy, but not to lead it. And without leadership or scale, the structural growth narrative weakens.

  The Business Cycle: Why Hasn’t Investment Turned?

  The second problem is more puzzling. India’s corporate investment cycle should be rising strongly, given macro conditions. Instead, it remains in a downtrend—even before pandemic disruptions and well before Trump’s 50% tariff shock.

  The Good News

  Growth momentum is solid. GDP has accelerated since 4Q24, powered largely by private demand—especially consumption in 2Q25 (Figure 1). The economy expanded 7.6% YoY on average in 1H25, outperforming regional peers and handily beating China.

  by:Sharmila Whelan

  |in:Viewpoints
• Global| Oct 08 2025

  Europe’s Economy Holds Up, but Headwinds Mount

  Europe recovery to continue

  The euro area’s economic performance in 2025 has been uneven. The year began on solid footing, with GDP expanding by 0.6% QoQ in Q1, only to lose momentum in Q2 as growth slowed sharply to 0.1% QoQ, with output contracting in both Germany and Italy. This slowdown coincided with the peak of the U.S.-led trade war, which weighed heavily on net exports after their strong rebound earlier in the year.

  Despite the softer second quarter, Europe’s business cycle upswing remains intact. As shown in Figure 1, the average return on equity for listed European firms moderated in the first half of the year compared with the same period in 2024. Yet the corporate profit cycle, which began in 2021, continues to advance. Key indicators—EBITDA, free cash flow, and retained earnings—remain well above pre-pandemic averages. Although earnings per share and cash flow softened slightly in 1H25, corporate balance sheets remain healthy and capable of supporting further investment in production capacity and employment.

  by:Sharmila Whelan

  |in:Viewpoints
• Global| Sep 16 2025

  Global Trade and Tariffs: Resilience Amid Uncertainty

  At the start of the year, the consensus view was grim: the US-led world economy was heading into recession, inflation would spiral out of control, and global trade faced collapse. Yet, none of this has come to pass. Business-cycle indicators still show resilience, and neither a global trade downturn nor sustained inflationary pressure has materialised.

  Global Exports: Resilient Despite Tariffs

  The trade war has been disruptive but not disastrous. In the US, GDP contracted in the first quarter, largely because of a sharp rise in imports as manufacturers front-loaded inventories ahead of tariff deadlines. By the second quarter, domestic demand shrank 0.4% quarter-on-quarter as inventories slumped. Exports and residential investment declined, but consumer spending actually strengthened—hardly evidence of households buckling under tariff pressure.

  The labour market has softened but isn’t collapsing. Unemployment at 4.3% is still below the pre-pandemic average of 5.1%, while August retail sales rose a brisk 5% year-on-year.

  Surprisingly, the trade war’s impact on global trade has been modest. World exports dipped 6.5% from late 2024 to February 2025, only to rebound 13%, leaving shipments up nearly 6% year-to-date through May (Figure 1). The sharpest weakness came in April and May, immediately after tariff hikes, but the recovery was swift.

  By comparison, past crises inflicted far greater damage. During the Global Financial Crisis, global exports collapsed by 47% in just eight months. Between 2014 and 2016, shipments fell 28% amid crashing commodity prices, a slowing China, and a strong US dollar. The pandemic caused a 33% peak-to-trough fall when economies shut down worldwide. Against this backdrop, the current downturn appears relatively mild.

  by:Sharmila Whelan

  |in:Viewpoints
• Global| Aug 05 2025

  Global Outlook Brightens for 2025

  After a turbulent first half of the year, summer has brought calmer conditions for the Trump administration, the global economy, and financial markets. Major US trading partners have signed or are negotiating new trade agreements. While we previously noted that finalising these deals would take time, the easing of trade tensions alone has been enough to draw businesses, consumers, and investors back into action.

  The view that the second half of 2025 will outperform the first remains intact, supported by solid business cycle fundamentals.

  Business cycle indicator assessment

  Figure 1 summarises the latest business cycle assessments. Green signals positive conditions, blue neutral, and maroon negative, with arrows showing momentum.

  Since the last review: • Unchanged: US, China, India, Korea, Indonesia • Improved: Europe, Malaysia, Philippines • Weakened: Japan, Taiwan, Thailand

  Europe’s uptick stems from an investment cycle rebound ahead of the tariff war. In Malaysia and the Philippines, broad money growth has turned positive, signalling stronger activity ahead without inflation risks.

  Japan’s deterioration reflects an unusually low two-year real lending rate (-2.8%), which points to inflation risks but is tempered by slowing broad money growth and a weakening credit cycle. Inflation is moderating—3.2% YoY in June vs. 4% in January—despite public dissatisfaction over living costs.

  Taiwan shows weakening broad money growth and credit, suggesting slowing domestic momentum. Thailand fares worst: the investment cycle is in downswing, leaving three of its five business cycle indicators negative.

  Conclusion: Shifts in scores are not large enough to warrant changes to 2025 investment recommendations.

  by:Sharmila Whelan

  |in:Viewpoints
• China| Jul 02 2025

  Innovation Without Borders: A Journey Through Modern China

  Last month, we had the opportunity to travel to China as part of a high-level UK delegation of companies and policymakers.

  Over two weeks—starting in Beijing and traveling by bus, train, and plane—we visited Shandong and Zhejiang provinces. Along the way, we engaged with senior government officials and met with dozens of leading Chinese companies operating in energy, AI, robotics, healthcare, and biotech.

  Three Key Takeaways

  1. China Is Back in Business

  As we’ve written before, a primary concern post-COVID wasn’t just economic indicators—it was the deep sense of risk aversion that had taken root in the corporate sector. Years of regulatory crackdowns, state intervention, and surveillance had stifled the entrepreneurial energy that once propelled China’s meteoric growth. Even financially strong private enterprises were hesitant to act.

  The turning point came in February, with DeepSeek. President Xi Jinping—ever the pragmatist—appears to have recognised that revitalising the economy, pushing forward with “Industrial Revolution 4.0,” and achieving “common prosperity” were not possible without the private sector. DeepSeek, a symbol of private-sector innovation, marked a pivotal moment. The publicised meetings between Xi, senior officials, and industrial titans sent a clear message: the private sector is once again central to China’s economic vision.

  This shift was palpable during our visit. The government is stepping back from direct economic management and focusing instead on creating strong incentives for investment. Priority sectors include next-gen technology, biomedical innovation, EVs, advanced materials, smart equipment, and clean energy. The goal is to harness AI and digital tools to modernise manufacturing across all company sizes.

  2. Geopolitics and Trump’s Trade War Are Reshaping Alliances

  Europe is looking East. As we’ve previously argued, Europe stands to lose the most from a Trump 2.0 presidency. His aggressive trade policies, unilateral stance on Ukraine, and NATO funding demands have strained transatlantic ties. Europe can no longer rely on the U.S. for security or technological leadership.

  China, on the other hand, is indispensable—especially if Europe is to meet its net-zero goals. China leads the world in green technologies: from EVs and batteries to solar, wind, and energy optimisation. Chinese firms produce 70% of global EVs and 80% of batteries. A new EV rolls off the line every 76 minutes—built by just 100 people and robots. Xiaomi’s YU7 EV can charge from 10% to 80% in 12 minutes, delivering 620 km of range in just 15 minutes of charging.

  The AI gap with the U.S. is narrowing, and China’s expertise in applying AI to manufacturing and energy optimisation is advancing rapidly. China is also home to some of the most cost-competitive manufacturers in the world. One standout was Unitree, a robotics firm we met that sells factory-ready robots for as little as $16,000.

  Engagement is becoming essential. While national security concerns persist, economic cooperation with China is becoming a necessity for Europe. Meanwhile, China is actively courting new partners. Across dozens of business meetings, Chinese firms were eager to collaborate, expand overseas, and welcome UK investment.

  Foreign companies remain vital to China. We were told that foreign firms account for 13 million jobs, a third of tax revenues and exports. In Beijing alone, there are 49,000 foreign enterprises from 16 countries. New foreign-funded company registrations rose 16% year-on-year in 2024.

  Still, the data shows a recent cooling in inbound FDI. Post-pandemic uncertainty, domestic policy shifts, and geopolitical tensions—especially Trump’s trade war—have caused FDI flows to drop to $18 billion in 2024, their lowest since 2009 (Figure 1). It's no wonder China is accelerating reforms to attract foreign investors and level the playing field.

  by:Sharmila Whelan

  |in:Viewpoints
• Vietnam| Jun 04 2025

  Vietnam In Trump’s Trade War

  Vietnam’s economy has made impressive strides and is now nearly a third larger than it was on the eve of the pandemic. In 2024, it grew just above its potential rate—7% versus a 10-year pre-pandemic average of 6.5% per annum. That said, the best may be behind it. In Q1 2025, growth moderated to 6.9% year-on-year, down from 7.6%, with consumption, investment, exports, and imports—an important lead indicator of domestic demand—all softening.

  by:Sharmila Whelan

  |in:Viewpoints
• Global| May 05 2025

  Trump’s Trade Tariff War: Winners and Losers

  Who is most and least vulnerable? Least vulnerable: Russia, Brazil, Philippines, South Africa, Indonesia, India, and Malaysia. Most vulnerable: Vietnam, Taiwan, Mexico, Thailand, and the EU.

  In this analysis, we examine 16 economies—including the EU, Canada, Mexico, Japan, eight additional Asian countries, and the BRICS. Each is ranked from 1 (least vulnerable) to 16 (most vulnerable) based on four key variables:

  1. US reciprocal tariff rates 2. The US trade deficit with each country 3. Dependency on exports to the US 4. Overall economic dependency on exports

  An aggregate vulnerability score is calculated by summing the rankings across these metrics. A higher total score indicates greater vulnerability to US trade actions. Investment recommendations are drawn from both a country's exposure to US tariffs and its business cycle fundamentals. While the framework may initially appear complex, its logic becomes clearer through the analysis.

  Tariff Exposure

  Figure 1 illustrates the total tariff increases—both proposed and enacted—by the US on a country-by-country basis. This includes the reciprocal tariffs announced on April 2 and previous measures such as the 25% duties on imports from Mexico and Canada. The effective US tariff rate on imports from China now stands at a staggering 145%.

  China ranks as the most exposed (rank 16), followed by Vietnam (46% tariffs, rank 15), Thailand (37%), and Taiwan and Indonesia (32%). Russia evaded Trump's 10% global US import duty, primarily due to the existing sanctions framework. It is also likely that, in a bid to facilitate a Ukraine-Russia peace deal and negotiate a minerals agreement, Trump chose not to further antagonise Putin. Brazil and the Philippines have also seen relatively modest tariff hikes.

  by:Sharmila Whelan

  |in:Viewpoints
• Malaysia| Apr 02 2025

  Malaysia At Turning Point

  Malaysia’s business cycle indicator assessment doesn’t make cheerful reading. Among eight Asian countries in our analysis, Malaysia’s overall indicator score ranks second lowest, just above Indonesia.

  The profit cycle remains in a downswing. Since 2015, the return on equity for listed companies has stayed below the pre-pandemic (2013–2019) average of 10.8%. However, returns have improved for the second consecutive year, reaching just under 10% in 2023. Corporate balance sheets remain healthy, despite modest declines in cash flow and retained earnings per share. The credit cycle has yet to turn, with the two-year real cost of borrowing rising to 2.8%, exceeding the upper 2% threshold—an indication that monetary policy remains tight.

  That said, Malaysia is in a stronger position than Indonesia, and we are overweight on Malaysian equities. The stabilisation of the profit cycle signals that the Malaysian business cycle is approaching a sustainable upswing. The key reason for our overweight stance this year lies in Figure 1.

  by:Sharmila Whelan

  |in:Viewpoints