Make no mistake, a new cold war has begun
The US-China clash is now the dominant frame through which policy is made in Beijing and Washington. But whereas the old cold war was a competition between systems, the new conflict threatens to tear the integrated global economy in two.
Technology is at the centre of this clash
The US and China believe the country that dominates the current tech revolution will be able to write the rules for how those tools are integrated into the global system. This will either vaunt China to a leadership position or reinforce the US’s dominance.
Globalisation is under threat, but it’s too early to write its obituary
Fracturing the global economy may cause inflation to rise and productivity to slow. But two factors may help preserve globalisation. Other countries don’t want to pick sides, and the logic of “mutually assured stagflation” may see cooler heads prevail.