HKUST Business Review

Instead of polarization, China wants to be more open than ever and is holding up that banner. Even before the latest tariff uncertainties hit, the global economy was poised for a transformative period of change. Shifting political alliances, rapid technological advancements, and evolving investment priorities were beginning to reshape the economic landscape. For everyone from presidents and policymakers to financiers and small business owners, that poses a whole new set of challenges in determining which path to take and where it may lead. In general, though, what they can see is that the world is entering an era of deglobalization, moving away from the principles that previously sought to lower trade barriers and champion the benefits of offshoring, outsourcing, and multilateralism. The Rise of Regionalism One inevitable consequence is that the network of global supply chains connecting producers and manufacturers to end users will alter. Another is that nations will seek out new alignments, trusting more in regional trade blocs and bolstering local economies to guard against the unpredictability of political moods and market swings elsewhere. Behind all this, of course, is the predominant issue of our times: the increasingly tense rivalry between China and the US – the world’s two largest economic powers – and how it will play out. According to Professor Jin Keyu, Chair of the Center for Geoeconomics, HKUST Institute for Financial Research, the current fragmentation of geopolitical norms can be expected to have wide- ranging effects on governments, inflation, and the global financial system as the process unfolds. HKUST Business Review 31 Cover