Capital Economics developed a methodology to sort countries into blocs using trade relationships, capital flows, and geopolitical links. The result reveals a stark asymmetry: the US bloc controls roughly 66% of global GDP while the China bloc holds only 25%. Population is split evenly, but economic power is not.
1. Strong US ally
2. Lean towards US
3. Unaligned (very few will successfully remain here)
4. Lean towards China
5. Strong China ally
Bloc Composition
US Bloc: All of Europe, Japan, Korea, Taiwan, low-cost producers (Mexico, Vietnam), resource countries (Canada, Australia)
China Bloc: Mainly commodity producers – Russia, Iran, Venezuela, large parts of sub-Saharan Africa
The edges around these blocs are fuzzy. Countries can shift. Argentina leaned toward China under Fernandez, now leans toward US under Milei. The boundaries are contested terrain.
The Neutrality Illusion
“Everyone wants to be the Switzerland of the fractured world. Everyone wants to be neutral. I’ve been through the Middle East, through Asia, through parts of Europe, Latin America – everyone’s trying to position themselves as being neutral.”
“But very few countries get to choose to be neutral. The contours of this fractured world will be set by the US and China. They’re the superpowers here.”
Key Takeaway
The economic center of gravity remains firmly within the US bloc. This asymmetry is the US’s strategic advantage – and the source of China bloc’s vulnerability. As rare earth analysis shows, commodity dependence doesn’t equal strategic power.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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