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3- Global power shifts

  • giannitribuzio1
  • Oct 1, 2019
  • 3 min read

“Unipolarity was one result of the collapse of the Soviet Union. The other was a dramatic alteration in the geographical shape of the World economy” . US liberal order is behind today’s globalization. One of the main consequences was the fragmentation of processes of production deindustrializing the West and industrializing the East which became the manufacturing hub of the World thanks to its abundant and cheap labor workforce. Based on the Long cycles’ theory the period of global US dominance achieved through wars and economic dominance might come to an end in the coming few decades. Are Trump’s election and Brexit the signs of the West liberal order in trouble? Will the Balance of power shift to China and the 21st century will become an “Asian Century”? Maybe not yet.


The US still has a growing economy, technological leadership, and political power that is enhanced by a strong military” (Hegemonic Stability Theory)” . The 2008 Global crisis had a great impact on US citizen. The economy recovered but at a lower speed; only 50% of 30-year-old in the US has a higher quality of life than their parents when they were the same age. Nevertheless, “the US accounts for nearly a quarter of the world’s GDP, the top 5 global corporations are Americans and the dollar is still the world’s major reserve currency” .


Asia was the main beneficiary of the Globalization wave attracting foreign capital and exporting goods to the West. It is generating around 30% of global economic output from an initial 5%. However, it remains an area with many different cultures, a GDP per capita of only US$5,800, compared to US$48,000 for US. China’s economic rise from being a US$200 billion economy in 1990 to becoming a US$6 trillion economy in 2010 was the story of the last 30 years. The “free rider” China is now openly challenging America hegemonic position. Is US soft power losing momentum? China for example refuses to revalue its undervalued currency, its one belt one road initiative points to further expansion and wants now to be the leader in the new born digital economy. Long term, however, what will happen around China will be part of the story. Asia is not an integrated area but has different cultures and different political systems. “Asian history is replete with examples of competition for power and even military conflict among its big players” .


“The EU project face today an existential’ crisis (Soros, 2014)” both economic and political. When Globalization ideas began to take off the European project was accelerated and transformed from a low tariff community to closer Union. The aim was to better compete in a globalized environment run by liberal ideas where size matters. With the Lisbon Treaty (2009) the decision-making process went from States to European parliament precisely during the global crisis of 2008. EU response to the crisis diverged from that of US. Keynesian policies that had united Europe in the past where replaced by Monetary policies and strict fiscal rules bringing austerity upon Europe and exposing the original fault of the project: the lack of a true political union. Having a single currency but failing to consolidate their National Debts caused the North less indebted countries to impose the rules of the game upon the South. The dynamics of Globalization have profoundly changed European States putting in motion a process of internal competition and the surge of a form of nationalism that, ironically, was the main reason why the project started. The risk of a sovereign debt crisis is high. “EU is today one of most competitive economies in the world (6 of the world’s top 10), has several world-class companies (30 out of the top 100), and a well-educated and increasingly mobile work force” . Yet the whole project is becoming elitist and has caused political instability exposed by the Brexit vote.

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