In 2017-2018, media narratives proclaimed deglobalization. Tariffs were rising. The world was returning to the 1930s. But when Capital Economics examined the data, they found no evidence of collapse. Trade as a share of global GDP actually increased. The world wasn’t deglobalizing – it was restructuring.
Neil Shearing, Group Chief Economist at Capital Economics, identified a critical disconnect. Each of the three pillars of globalization – trade, capital, and labor – showed a world that remained highly interconnected. Global capital flows stayed extremely high by historic standards. Migration continued despite government pushback.
“And yet something had changed. It was clear that something had changed.”
What changed was not the volume but the structure. The defining feature: an intensification of superpower rivalry causing selective disentanglement – not universal retreat, but sorting.
The Core Thesis
“The world’s not deglobalising. Rather, there’s an intensification of a superpower rivalry between China and the US. Those countries are pulling apart in some areas – hence the fracturing – and other countries are being forced to choose a side.”
This is a 30-50 year framework, not a five-year disruption. The hyper-globalization of 1989-2010 was historically unusual – a period when one superpower sought to reshape the world in its image. That clearly has not played out. Instead, China emerged as a strategic peer competitor.
The New Equilibrium
The new equilibrium is not collapse. It’s controlled interdependence, selective cooperation, and permanent tension. Trade continues. Supply chains continue. Financial flows continue. But everything filters through a new logic: Trust is political. Interdependence is strategic. Globalization is conditional.
Key Takeaway
The world is not shrinking – it is sorting. As the AI Geopolitical Chokepointanalysis shows, the question is whether you’re positioned to be sorted favorably.
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.
