The recent developments around China, Iran and the Middle East have the potential to generate two types of shocks – oil price and capital flow – and India is vulnerable to both, former governor of Reserve Bank of India YV Reddy said here on Tuesday. Speaking at a programme organised by the Institute for Advanced Studies in Complex Choices, Reddy said there is new ‘bi-polar’ world with USA and China leading each block even though both the countries have close ‘Economic integration.’