Global Macro Research
Macro BytesHow can investors navigate a fracturing economic order? - with Neil Shearing
We explore how globalisation is evolving—not ending—and why the world economy is splitting into rival blocs. What does this mean for trade, technology and your investments?
Author
Paul Diggle
Chief Economist
Duration: 33 Mins
Date: 13 Nov 2025
The world isn’t deglobalising—but it is fracturing. The global economy is splitting into rival blocs along manufacturing, technological and financial lines, with implications for trade, investment and policy.
In this episode of Macro Bytes, Paul speaks to Neil Shearing, Group Chief Economist at Capital Economics and author of The Fractured Age: How the Return of Geopolitics Will Splinter the Global Economy.
They discuss what the ‘hyper-globalisation consensus’—the idea that economic interdependence was stabilising—got wrong, how the return of superpower rivalry will force other countries to pick a side and the ways investors can navigate this new economic and geopolitical environment.
Some highlights:
They discuss what the ‘hyper-globalisation consensus’—the idea that economic interdependence was stabilising—got wrong, how the return of superpower rivalry will force other countries to pick a side and the ways investors can navigate this new economic and geopolitical environment.
Some highlights:
- Fracturing, not deglobalisation. Global trade volumes remain robust. But key sectors—such as semiconductors, green technology and smartphones—are increasingly divided between US- and China-aligned supply chains. Countries like India, Vietnam and Mexico are emerging as alternative hubs.
- Fluid blocs. The US bloc includes most of Europe, Japan and Australia. China’s bloc features Russia, Iran and parts of Africa. These alignments are not fixed. Argentina’s recent pivot illustrates how quickly geopolitical loyalties can shift.
- Financial flows and risks. While cross-bloc investment is slowing, China’s substantial US dollar holdings are unlikely to unwind rapidly. However, geopolitical flashpoints such as Taiwan and the South China Sea are raising the risk of direct conflict.
- Winners and losers. Firms operating in high-tech sectors with exposure to both blocs face strategic dilemmas. Countries able to reconfigure supply chains may benefit, while those caught in the middle risk marginalisation.
- Implications for policymakers and investors. Accept fracturing as a structural shift. Focus on resilience, avoid alienating allies and adapt gradually to minimise disruption.
Listen to the latest episode of Macro Bytes for the full discussion.
