LONDON – Geopolitical pressures and other non-economic factors have put the global economy on a path toward fragmentation. Beyond its inherent risks, this trend will not only have profound implications for economic stability and growth but also could jeopardize efforts to combat climate change.
Heightened geopolitical tensions, especially the escalating rivalry between the United States and China, are the primary catalyst of fragmentation. China, which emerged as the world’s largest exporter more than a decade ago, overtook the US as the world’s largest economy (in purchasing-power-parity terms) around 2016. At the same time, the decline in US manufacturing jobs, partly attributed to the surge in Chinese imports, has fueled Americans’ discontent with globalization and reshaped their views on China.
Contrary to many Western analysts’ expectation that increased trade would put China on a path to democratization, the country has gone in the opposite direction under President Xi Jinping. Instead of liberalizing and pursuing pro-market reforms, Xi has gravitated toward a state-centric system controlled by the Communist Party of China.
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The Great Fragmentation
26
1
11.12.2023
LONDON – Geopolitical pressures and other non-economic factors have put the global economy on a path toward fragmentation. Beyond its inherent risks, this trend will not only have profound implications for economic stability and growth but also could jeopardize efforts to combat climate change.
Heightened geopolitical tensions, especially the escalating rivalry between the United........
© Project Syndicate
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