Geopolitics and business: can the state remake capitalism or only undermine it?

Geopolitics and business: can the state remake capitalism or only undermine it?

The global economic landscape is undergoing a profound structural shift as escalating tensions between national security and economic interests compel states and corporations to re-evaluate the traditional boundaries between government and the private sector. The rise of highly discretionary and interventionist state capitalism, exemplified by the “muscular” market interventions of the Trump Administration, is in line with the evolution of a market system optimised for efficiency to one that values supply chain security as a part of economic and geopolitical power. It is likely that this emerging system will also be less predictable, more politicised, and ultimately more expensive. Corporations can no longer expect clear neutral ground for commerce and instead will need to align with or hedge against shifting national objectives. This dynamic could increase the risks of corruption and perhaps compromise institutional independence. Some participants at this conference wondered whether Western nations risked undermining their core advantages in competing with China by effectively mirroring parts of its model with American capitalism with Chinese characteristics. Others, whilst accepting that risk, saw intervention in the markets as essential and unavoidable in response to Chinese interventions. It was debated whether Beijing was achieving its objectives by forcing a separation of the global economy into zones of western and eastern influence, each defined by market interventions by the superpowers.