Cold War 2.0: Economic and Technological Dominance Competition

The new world order is defined by economic competition and technological dominance between the US and China.

### The Shift to a New World Order: Cold War 2.0 Dynamics
* 🌍 The current global landscape resembles a "**Cold War 2.0**," shifting from a **multipolar world** to one focused on **protecting domestic markets** and **reducing dependence on rival blocs**.
* 🔄 This transformation involves redefining trade routes and foreign direct investments, particularly between the US and China, as both countries seek **economic and social dominance**.
* 💻 Technology has emerged as a **critical platform for this confrontation**, with China leading in several technologies while the US maintains dominance in **high-end microprocessors**.
* 🤖 To address demographic challenges, China is investing in **robotics for manufacturing**, while the US is focusing on **artificial intelligence to compensate for worker shortages** in a service-oriented economy.
* 📈 The bloc logic creates a **powerful economic safety net**, fostering **strong internal interactions** within each bloc while reducing exchanges between them, signifying a **reorganization of globalization** rather than de-globalization.
* 🇪🇺 Europe is also engaging in protective measures, such as **imposing tariffs on Chinese electric vehicles**, reflecting a broader trend of **safeguarding domestic markets** amidst this competition.
* 💰 Despite potential changes in US leadership, the consistent hawkish stance towards China is expected to persist, as **economic security becomes paramount** in this evolving world order.
* 🔮 Ultimately, investing in future-oriented strategies is crucial, as market success hinges on companies' ability to **generate profits in this new geopolitical context**.

How would you classify the new world order today? So, it feels a little bit like we're back into a Cold War 2.0. We all come from a place where we were in a multipolar world with fiscal rules. And basically, from that point, we kind of made 180 degrees into a world where now, you know, what characterizes the environment we're in is: protect your domestic markets. So, you no longer want to depend on anything that relates to the other bloc. So, redefining trade routes, redefining foreign direct investments, where they go to. Now, that is a big change. China and the US, I think those two countries and those two economies are fully into that shift. And the idea is basically some form of economic and social dominance. There is a confrontation on a certain number of platforms. And the first and most important platform is the technology platform. Who has technology dominance? China has a lead on a certain number of technologies,

but the Americans probably have the lead on the most important one, which is high-end microprocessors. You know, we have a demographic issue everywhere. The way you compensate for the lack of workers, if you are a manufacturing economy, is robotics. And this is what the Chinese are doing. But when you're a service society, how do you compensate for missing workers? It has to be artificial intelligence. And this is why the Americans are putting so much money in what is central to the development of artificial intelligence, which is high-end microprocessors. A lot of money is being poured to secure those supply chains, you know, in this bloc logic. And that, you know, creates a relatively powerful economic safety net. In a bloc logic, you have less interactions between the two blocs, but you have a lot of interactions within each bloc. This is not about de-globalisation. It's more about a reorganisation of globalisation to meet, basically, this battleground.

between the two powerhouses of the world economy. It’s a competition to, you know, to win. If you're not China and if you're not the US, you kind of have two choices. Either you choose a camp, or you try to play with both sides. Europe, now, is imposing tariffs on Chinese electrical vehicles. That's the idea that they are protecting their home market. But it does feel that the Americans are going to continue to go, they're going to continue to invest, they're going to continue to train, they're going to continue to, you know, want to compete. And the big question is, will China have the means to keep up the pace? To be fair, and I'm going to be voluntarily a little bit provocative here, I don't think the election changes that much. The Americans have been very consistent. Whether it's the Trump administration or the Biden administration, they've been very consistent in treating China,

as an opponent. So, the hawkish stance towards China is something that will continue whoever becomes president in the US. But markets react to one thing: are companies making money or not? You need economic security in a world order that has changed. If you invest in the future, you will not regret it.

Cold War 2.0 | FT Rethink

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Financial Times

The New World Order: A Shift to Bloc Logic

The world is experiencing a shift from a multipolar environment to a bloc-driven system, with countries like China and the US leading the change.

This new order is characterized by a focus on protecting domestic markets, redefining trade routes, and competing for economic and social dominance, particularly in technology.

The US and China are investing heavily in high-end microprocessors and robotics/AI to address workforce shortages, creating a powerful economic safety net within their respective blocs.

The Geopolitical Competition Between the US and China

The US and China are in a fierce competition for global economic dominance, leaving other countries with the choice to align with one side or play both.

Europe is imposing tariffs on Chinese electric vehicles to protect its home market, while the US continues to invest and train to maintain its competitive edge.

The consistency in the US's approach to China, regardless of the administration, raises questions about China's ability to keep up with the pace of competition.

The US's hawkish approach to China is likely to persist regardless of the presidential outcome.

Market reactions are driven by companies' profitability and the need for economic security in a changing world order.

Investing in the future is emphasized as a key strategy for success.