The break is not yet complete, but a return to the past seems illusory. The reasons that caused the global economic model to shift have not disappeared.
Industrial policy remains attractive because it refocuses the debate on the location of production and responds to the criticism often made of globalization regarding employment.
However, this proactive approach in developed countries has not yet been entirely successful. In the US and the Eurozone, industrial production is less robust than in many emerging economies, not to mention China. Manufacturing employment’s share of total employment continues to decline. By December 2025, this share was at its lowest historical level in the US.
Xi, who gave China a more independent political direction, is still in power. Deng Xiaoping had created the conditions for economic recovery as early as the late 1970s; Xi transformed it into a broader political dynamic that does not appear to be reversible.
Tensions over technology and AI between the United States and China have not disappeared. This is the key to understanding the various disruptions and the changing model. The United States has lost a form of monopoly that the Chinese would like to seize. The potential handover is not going smoothly.
This heterogeneity reflects a multipolar world where everyone defines their own objectives and ways of achieving them.
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In “Three Lessons on Post-Industrial Society,” Daniel Cohen emphasizes the role of institutions in managing international affairs. He states that: “The risks of a necessarily unstable multipolar world can only be avoided by creating a multilateral order, endowed with legitimate institutions, capable of defusing the conflicts that the spontaneous evolution of the world prepares.” Daron Acemoglu and his co-authors also stress the role of institutions in promoting growth and ensuring coherence between decisions and trajectories.
The chosen path is not that of robust international institutions.
The White House wants to reduce China’s role, particularly within major Western institutions. At the same time, China is seeking to establish its own institutions to reduce its dependence on the US, although it has not yet succeeded.
Recently, Washington withdrew from the South African G20 summit for bizarre reasons, and last week, Donald Trump withdrew the US from 31 UN organizations and 35 others. Exchange and compromise are no longer part of the American diplomatic vocabulary.
The elastic bands that institutions represent for containing a multipolar world are now fragile and weakened. We can no longer assume a return to the past. We must think differently.
To be continued…
