Globalization as we know it is over. The United States no longer stands alone, and China’s rise has redrawn the world’s balance of power. In this new age of parity, resilience has...
We are no longer living in the world that shaped most of our professional lives.
For decades, leaders operated under a stable set of assumptions: that globalization would deepen, inflation and the cost of capital would remain low, democracy would spread, and Western technological dominance would endure. That world is gone, and those assumptions have been upended.
What has emerged instead is a new equilibrium – an age of power parity. The United States no longer stands alone as the world’s uncontested leader. China’s rise has redrawn the map of global influence, forcing a rethink of how globalization works. The open, US-led rules-based order that underpinned prosperity has fractured, replaced by a world that is more fragmented, more competitive, and far less predictable.
For half a century, US leadership in markets, technology, and defense underpinned the open international order that allowed globalization to thrive. That foundation has shifted dramatically.
When President Nixon visited Beijing in 1972, China accounted for just 1.5% of global GDP. Even after joining the World Trade Organization in 2001, it represented only about 5%. Today, it is at near parity with the United States.
The transformation goes far beyond scale. Two decades ago, the US dominated nearly every frontier of science and technology. Now China leads in 57 of 64 research domains: from advanced materials and distributed computing to clean energy and manufacturing innovation. That is the shift, and it changes how we compete.
It also changes the logic of global leadership. For decades, the US provided what economists call global public goods – open trade, a stable financial system, and collective security – because it was in its interest to do so. But when another power rises to near parity, the incentive to underwrite the system weakens. The result is a system where power is shared, rules are contested, and competition intensifies.
How the US responds to this new balance of power depends largely on who leads it. Two competing strategies are visible.
Under President Biden, America sought to rebuild alliances to sustain leadership through partnership and collective defense. We saw it in NATO’s renewal, in new security arrangements in the Indo-Pacific to contain China, and in the effort to re-engineer supply chains among trusted allies.
President Trump’s administration rejects that logic. It sees allies as competitors and institutions as constraints. Its preferred tools are tariffs, sanctions, and transactional deals. In this worldview, every relationship becomes a negotiation; every partnership, a test of leverage.
The world has experienced both approaches in the space of just a few years. It is a vivid reminder that in an age of power parity, US leadership itself has become uncertain, and that uncertainty reverberates through the global economy.
For business, this means operating in a world of shifting rules. The stable framework of globalization has given way to a landscape defined by deals, not alliances; power, not principles; transactions, not trust.
If the US steps back from providing global public goods, who fills the void? So far, no single actor has stepped forward. While China, India, and others have benefited from a more fragmented order, none has expressed a desire to sustain it.
That leaves us facing what I call a “world minus one” – a global system that continues to function even as the US disengages. We have already seen this in practice. Twice, the US has withdrawn from the Paris Climate Agreement. Yet the rest of the world has carried on. Science remains science. Economics remains economics.
It is not ideal, but it is far better than the alternative: a descent into protectionism and retaliation, the kind of downward spiral that deepened the Great Depression in the 1930s. The challenge now is to sustain cooperation without relying on a single guarantor.
The question is no longer whether a company can be as efficient as it was five years ago, but whether it can be more reliable than its competitors today.
For companies, these shifts are anything but abstract. They shape strategy, investment, and daily operations. Many leaders describe today’s world as less efficient: the cost of capital is higher, supply chains are less optimized, and geopolitical risk is omnipresent. Yet these conditions apply to everyone.
The question is no longer whether a company can be as efficient as it was five years ago, but whether it can be more reliable than its competitors today.
Resilience has replaced efficiency as the defining measure of competitiveness. That means diversifying suppliers, regionalizing production, and building the capacity to pivot quickly across markets and technologies. That strategy will be more complex, and often more costly, but it will also be more sustainable in a volatile world.
Even amid fragmentation, opportunity remains. The US accounts for roughly 13% of global imports. In other words, 87% of global demand for imported goods lies elsewhere. The global economy is being reconfigured. Businesses that understand this and adapt will be best positioned to thrive.
The future will not be defined by those who hold dominance, but by who demonstrates direction.
The end of the old order marks transition, not decline. Globalization is being reconfigured, not reversed. The question is what kind of leadership this new era requires.
In times of uncertainty, waiting for stability is not an option. Leadership now means creating clarity where none exists; making choices grounded in purpose and trust; investing in resilience even when the payoff is not immediate.
The task ahead is to navigate a more competitive world with confidence. Volatility may be the new normal, but so is our capacity to adapt. The task is not to wait for stability, but to build it.
The future will not be defined by those who hold dominance, but by those who demonstrate direction. Resilience, purpose, and the ability to generate trust are now the new standard in an age of power parity.
This article is inspired by a keynote session at IMD’s signature Orchestrating Winning Performance program, Singapore (2025), which brings together executives from diverse sectors and geographies for a week of intense learning and sharing with IMD faculty and business experts.
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