The winter of 2022 and early 2023 had been mild in Bilal Ahmed’s part of Germany, indeed in most of Europe. From a consumer perspective, that was a good thing, since friends and foes alike had predicted that the skyrocketing energy costs caused by Russia’s war against Ukraine would cause misery during the winter months. 

But Ahmed, a software engineer, was struggling to make sense of what was happening around him and around Germany. “I grew up in a globalized world; this is the only world I know,” he said. “We didn’t even have national service in Germany when I turned 18. I grew up thinking that the world was moving toward more unity. I studied abroad and had the opportunity to interact with people from all over the world. In my company, we worked with Russian and Belarusian IT engineers. And now all of that is over. We all thought that globalization would expand the footprint of liberal democracies. Instead, the interconnectedness of the world is leading to more tension, and autocratic states are impeding on our way of life and have leverage over us! The more globalized we’ve become, the more leverage authoritarian countries have gained over us.”

This was the world that optimists in positions of power in the 1990s, 2000s and 2010s had bequeathed to the new generation, just as their “economics is everything” mindset had delivered a world now approaching unprecedented climate-change peril. People like Ahmed were supposed to grow up in a peaceful and prosperous world, and instead they were being presented with war in Europe, climate emergencies, perhaps even a war involving China.

But the decision makers that had bet so heavily on trade and porous borders weren’t all optimists. “I’m exercising self-critical reflection,” said Kevin Casas-Zamora, now secretary general of IDEA, an intergovernmental organization promoting democracy. “We were very naïve with regard to free trade; very naïve. We never really thought through the political and security implications. And those implications are dawning on us now.”

At the beginning of 2023, NATO Secretary General Jens Stoltenberg returned to speak at the annual conference organized by the Confederation of Norwegian Enterprise, NHO. He’d first spoken there in the early 90s, when he was Norway’s minister of business and energy. “In particular,” he told the assembled business leaders at his return visit, “I remember the restructuring package in Sør-Varanger municipality, after we shut down the mine and the pellet plant. An important part of this was to invest heavily in trade and investment across the newly opened border with Russia. It was a new and optimistic time.” He went on: “Now I’m standing here again, in a completely different world. No more tearing down rusted walls. But building new, upgraded fences.”

Detente has turned into high tension – and new war. Authoritarian regimes are rising. Democracy is retreating. In Beijing, Xi Jinping told members of his country’s rubber-stamp legislature that “Western countries, led by the U.S., are implementing all-round containment, encirclement and suppression against us.” His new foreign minister, Qin Gang, declared that “if the United States does not hit the brake … no amount of guardrails can prevent derailing and there surely will be conflict and confrontation.”

It was a sign of the times that when Americans were polled in early 2023, 50 percent of them believed that China was America’s greatest enemy, compared to 35 percent who thought it was Russia, 7 percent who thought it was North Korea, 2 percent who thought it was Iran and 1 percent each who thought it was Afghanistan or the United States itself. In 2018, only 11 percent thought China was the United States’ greatest enemy.

The Limits of Trade’s Power

A few months earlier, Morris Chang, the CEO of TSMC and the father of Taiwan’s world-dominating semiconductor industry, had made an unexpected intervention. Riding on the crest of globalization and digitalization, TSMC had built itself into a global behemoth supplying the whole world with chips crucial to all kinds of products. But in December 2022, Chang declared that “globalization is almost dead.”

One and a half years earlier, Antony Perillo, director of a global luxury goods maker 84 The Milken Institute Review Hermès had told me, “I give globalization another 24 months.” I felt he was exaggerating. Now it turned out he’d been right on the money. In a move illustrating the emerging new world order, the German government announced it was banning key parts of Huawei’s 5G technology – not because of national security concerns but because of fears that using Huawei could make Germany dependent on China.

In globalization’s heady days, people like Casas-Zamora and Stoltenberg – and most men and women in charge of governments, businesses, universities, media organizations and other pillars of society – had had no reason to doubt the maxim that when goods cross borders, soldiers won’t. What they failed to consider was that trade might not be able to change countries’ domestic arrangements, just like they failed to realize that ordinary citizens may have desires beyond cheaper consumer products.

Instead, the two globalizing countries that were also strong enough to form geopolitical counterweights to the West chose a different track. Their decision not to couple market economies with liberal democracy upended globalization’s premise of goods versus soldiers – and interdependence became a source of vulnerability for the countries in Western Europe and North America that had so enthusiastically exported their market economies and assumed that everyone, laid-off workers perhaps excepted, would endorse the globalized way of life. “There was a moment when global politics and technology created a unique opportunity for companies to build around the world,” Robert Okine, CEO of a software company in Ghana, reflected. “The technology is still available, but the political conditions have changed.”

If the coexistence of countries were simply a matter of economics, Casas-Zamora explained, Europe should “buy gas from Russia for ever and ever, because that’s what comparative price advantage dictates. Well, it turned out that things were more complicated than that. And now security concerns are trumping whatever diktats emerge from the economic logic of free trade.”

The same, he added, went not just for hightech goods made in China but also for crucial components going into products like Taiwanese computer chips: “Free trade would dictate that we should keep buying chips from providers in Taiwan because those guys are very efficient at producing computer chips. Well, it turns out that there’s a risk that one fine day Taiwan could be taken over by China and the whole global economy could grind to a halt. That means it might be advisable to try to produce computer chips somewhere else.”

The somewhere else, Joe Biden and a majority of the U.S. Congress had decided, could be the United States. Not only would the Inflation Reduction Act make America safer, it would create modern factory jobs. “Too many have been left behind. … They remember the jobs that went away and wonder whether a path even exists anymore for them to succeed. But I know we can forge a path of building an economy where no one is left behind,” the U.S. president tweeted in early 2023.

So certain were many political leaders of a future with less dependence on trade with China that more of them dared to extend a hand to Taiwan. “Today, I spoke with the President Tsai Ing-Wen of Taiwan. … I assured her that Taiwan and the Czech Republic share the values of freedom, democracy and human rights. We agreed on strengthening our partnership,” Petr Pavel – a former general and chairman of NATO’s Military Committee, and a first-time politician – tweeted two days after being elected president of the Czech Republic.

The original exporters of market economy could, in fact, keep trading with friends and almost- friends in Central and Eastern Europe, in Latin America, in North Africa, the Middle East, Asia and sub-Saharan Africa. The countries in Central and Eastern Europe were, of course, incontrovertible proof that countries could turn themselves into market economies and liberal democracies and integrate themselves into a globalized world based on trade and shared values. Yet the belief that exporting market economies would automatically deliver democracy had vanished.

Paradoxically, laid-off factory workers and other ordinary citizens who had been questioning globalization – and been greeted by patronizing snickering by well-educated members of society – had been proven right. “China has been helpful on one level because everything has become cheaper,” Gurinder Singh Josan, a businessman and community representative in the Midlands of Britain, observed. “But as a result, our industry barely exists anymore.”

Laid-off workers could not, of course, have predicted Xi Jinping’s authoritarian turn or Vladimir Putin’s murderous one. Nor could they have known that globalization would be undermined by pervasive unfair play. They had sensed, though, that moving large chunks of industry to faraway countries would cause harm at home.

Unusually among top politicians, Casas-Zamora (a Costa Rican) was willing to admit errors of political judgment. “We were very blind and very naïve about the implications of free trade, not just about how it would create a two-tier society in our countries but about the potential return of geopolitics,” he said. “And geopolitics can curtail, and in many cases trump, the economic logic of globalization. That will renationalize or at the very least regionalize economic activities.”

Rather paradoxically, Beijing seemed eager to drive home the point that separation was needed. After Elon Musk tweeted a new U.S. government report suggesting Covid-19 may have been a lab leak, the Global Times, the Chinese Communist Party’s flagship newspaper, responded, asking if he was biting the hand feeding him. At that point, more than half of the manufacturing of Musk’s Tesla cars was located in China, and more than a quarter of the cars were sold there.

The Search for Friendlier Shores

Maybe some countries, especially the United States, were marching too fast in wanting to reduce their dependence on China. It was remarkable, though, how citizens’ anxieties, businesses’ worries about unfair play and governments’ concerns about national security were converging with increasing Chinese authoritarianism and belligerence, Russia’s plunge into the geopolitical abyss and the emergence of an informal bloc led by Beijing.

The UN Human Rights Council’s decision in late 2022 to reject a motion to debate China’s treatment of the Uyghurs seemed like another indicator of the world’s now unmistakable split into two camps. While Western countries voted in favor, sub-Saharan African countries, Pakistan, Qatar and the United Arab Emirates voted with China.

With manufacturers now scouting for alternatives to their Chinese facilities and suppliers, it was clear that the answer would not be one country, not even India. They’d have to replicate whatever operations they planned to withdraw from China in a cluster of countries. “After the Cold War, we built a global structure, global supply chains, global business models, a global management that could be moved around to different countries, and now a sudden brake is being applied on this whole global machinery,” said Michael Treschow, the chairman of Unilever, who was seeing his decades of commercial achievement collide with forces stronger than commerce. “Companies will be forced back to island-style operations. And the risks of disruption to global supply chains means they’ll go from global to regional.”

The world of free-market commerce could indeed retreat to the string of figurative islands on which Cold War executives operated. This time, though, the central island would be much larger, comprising not just Western Europe, North America, Japan, South Korea, Australia and New Zealand, but also the Central and Eastern European countries that had joined the EU. “The West will have more friends than enemies, so there will be more integration between these countries,” Sergei Guriev, now provost at France’s prestigious Sciences Po research university, pointed out.

What’s more, technology was allowing companies to create more efficient regional hubs than was possible in the ’70s and ’80s. “This whole transformation will create jobs in different places,” Treschow said. “It won’t be a literal return to the ’70s and ’80s, but a more modern version with the internet and a digital lifestyle. Things will be different, but they won’t be global.”

It was not for nothing that Apple was moving manufacturing to India, Vietnam and the United States. It was even planning to open its first Apple stores in India. Meanwhile, Bolivia, home to vast reserves of lithium, the metal crucial to batteries used in digital devices and electric vehicles, had cast its lot with the other bloc. Following a billion-dollar deal with three Chinese firms to explore the reserves, Bolivia had now signed a $1.4 billion agreement for lithium exploration with another Chinese company and a division of Russia’s state-owned Rosatom. The agreements followed another deal, worth $2.3 billion, signed between Bolivia and a Chinese firm in 2019. And because it was 2023, not 2003, that meant China and Russia were on their way towards a monopoly on lithium in the country with the world’s largest reserves by far.

I thought of John Spellar, the British parliamentarian whose sympathy for laid-off factory workers had for years made him seem almost anachronistic. Now factory jobs were on the verge of returning. Britain wasn’t splurging on subsidies for new manufacturing in the same manner as Washington – indeed it was struggling mightily to make its departure from the thoroughly integrated European market work. But many companies were likely to friend-shore under their own steam.

Some of them, British or otherwise, might set up production in the very area that brought the world the Industrial Revolution. Could the world’s geopolitical strife bring an unexpected second wind to the Midlands? Spellar was hopeful: “We need to start training people in anticipation of the kinds of jobs that may arrive.”

Such jobs, making products so sophisticated they might involve lab coats, could also deliver a reputational upgrade of the often-disparaged blue-collar worker. The advanced manufacturing now in ascendance might even be an opportunity to eradicate the unfortunate divide between blue-collar and white-collar workers.

Martyn Richardson, who with his brothers had managed to massively grow his real-estate development company from their headquarters in the Midlands town of Oldbury, was optimistic, too. At one point, the town had a Toys “R” Us in addition to supermarkets, but then the chain went bust. It would be redemptive if some of the jobs lost to China returned and were joined by new ones in, say, green manufacturing.

The Richardsons had recently bought the site of a factory that used to make automotive components. “The manufacturing knowledge base is still here!” Martyn said. Manufacturing had changed a great deal since the ’90s, and making, say, solar-panel components bears little relation to making screws. But locals, both those who’d once worked in factories and those too young to have done so, were eager to see jobs return. And for many locals, good jobs in manufacturing were far more desirable than jobs in hospitality or logistics.

But Gerard Coyne, a veteran local tradeunion boss, had his doubts. “Technological innovation will begin to fill many of the jobs that were lost to globalization,” he said. “We’ll see more automation and more driverless freight. Many of the jobs we lost won’t return, and since German engineering giants will be making many of those robots our workers won’t benefit there, either. It’s absolutely terrible for workers. If they feel isolated and excluded now, imagine how they’ll feel when they’re replaced by more technology. And imagine when middle- class jobs begin to be affected by robots.”

In 2023, the advance of artificial intelligence was causing precisely such job losses, with Goldman Sachs reporting that 300 million jobs were at risk. But the arrival of the robots was an unexpected recompense for the West’s manual workers. Goldman found that office professions including management were likely to be killed by AI, while blue-collar jobs – including machine operators, miners and lorry drivers – were extraordinarily safe. Only 7 percent of assemblers and machine and plant operators in the EU were, for example, likely to lose their jobs to AI, compared to 29 percent of managers. Friend-shoring mining and manufacturing companies were already desperate for workers.

Antony Perillo was already part of the new friend-shored world. After completing his company’s exit from China, he’d led operations in Bangladesh and Vietnam. Now he was based in Britain, an executive with a high-end apparel company with an international customer base but with production exclusively in the UK. Yes, making leather bags in Britain was more expensive than in a low-wage country, but consumers were willing to pay a bit extra for “Made in Britain.”

Even though it would certainly be complicated for companies to move manufacturing from China, and no country could hope to replace China as a one-stop shop, Perillo thought that companies were likely to succeed where his own company had succeeded years before. “Our technological advancement is huge in comparison to the ’80s,” he pointed out. “The digital ability for us to execute friendshoring and to get consistency, but also allow for a degree of segmentation is going to be different compared to how it was in the 80s.”

The manufacturing about to return was so fundamentally different from the kind that left in the 80s that it hardly even resembled factory work. What’s more, artificial intelligence could help companies get a complete overview of their extremely complex supply chains, which involve not just direct suppliers but second-, third- and fourth-tier ones, sometimes even more. Technological change also made it possible to set up production in friendly and moderately friendly countries without dispatching the armies of expat managers that had been required when Perillo had first arrived in China. And it would be possible to manufacture products that didn’t all look the same.

It would, for example, “be wonderful to see a German-designed and German-made mobile phone,” Perillo suggested. The globalized world of products foretold by Harvard Business School professor Theodore Levitt in 1983 seemed destined to give way to new variation.

New Bloc on the Block

China, meanwhile, was enticing countries to join the informal bloc emerging under its leadership. Bangladesh and Myanmar appeared to be leaning in that direction, and the UN vote rejecting a debate on the Uyghurs was a strong indicator of which countries were leaning towards the Beijing-led bloc. Another indicator of China’s ambitions to create an informal alliance had arrived in March 2023, when the country brokered an agreement that would see archenemies Iran and Saudi Arabia resume diplomatic relations.

A few days later, heavily sanctioned Iran announced that Russia, now even more heavily sanctioned, had in the past year become its largest foreign investor. “China and Russia are our two main economic partners [and] Iran is going to expand its relations with them through implementing strategic agreements,” Iran’s finance minister, Ehsan Khandouzi, told a reporter.

Russia and China, in turn, performed a public embrace soon after the International Criminal Court had issued an arrest warrant for Vladimir Putin over war crimes in Ukraine. Even though Putin was now the first leader of a permanent UN Security Council member state to have an arrest warrant to his name, Xi Jinping very publicly travelled to Moscow on his first state visit since being elected to a third term. “No matter how the international landscape may change, China will stay committed to advancing China-Russia comprehensive strategic partnership of coordination for the new era,” a Chinese foreign ministry statement explained. Putin returned the expression of loyalty by telling Xi that Russia would be able to export even more energy to support China’s growing economy.

Countries on the geopolitical fence, in turn, found a much-desired opportunity to tell the West to stop lecturing them on domestic issues. At the very least since the end of the Cold War, unsolicited Western advice about human rights had irked governments of less-than-democratic countries. Now, as vital participants in the globalized economy, they could subtly make the point that such lecturing had to stop or they’d join China’s emerging camp. Western countries must “separate politics from trade and the economy,” Thani bin Ahmed Al Zeyoudi, the United Arab Emirates’ trade minister, explained. That, too, was a return to the Cold War, when Western- Soviet competition for aligned countries was so intense that human rights took a back seat, or no seat at all.

When considering prospective new countries for their production and entire supply chains, manufacturers now had to consider political developments involving not just Russia and China but also the countries that might join the Chinese-led camp. Conversely, they had to plan for harm they might inadvertently cause to their own supply chains. Nobody wanted to be like Lithuania’s manufacturers, who unwittingly caused a scare to their supply chains when China punished them to avenge Vilnius’ friendly overture to Taipei.

There was also the matter of how long companies might be able to sell to geopolitical rivals’ consumers. In the crucial Chinese market, it wasn’t just Huawei that had been catching up with Western market leaders; Chinese fast-fashion brands, carmakers and technology companies had done so, too. It was precisely because China had attractive domestic alternatives that Chinese consumers could stage boycotts against brands like H&M.

“We need new strategic alliances in the world,” Tony Danker, the director general of the Confederation of British Industry, told a reporter. In the meantime, the global geopolitical standoff would intensify even as countless Western companies operated significant manufacturing, supply chains and sales in China and the bloc emerging around it. It was no wonder executives were extremely nervous about the harm that might come to their operations – and the additional harm that the two-front war involving opinionated consumers in the West and China respectively could cause.

The world of finance wasn’t facing the same segmentation as manufacturing: of the $1.08 trillion in U.S. treasury securities – that is, U.S. government debt – held by foreign governments, $870 billion was held by China, second only to the amount held by Japan. But so fearful were investors of what might come that by early 2023 top Chinese tech companies had seen their market value drop by $300 million since the beginning of the pandemic, while the value of U.S. tech companies had soared by $5 trillion.

How much minds had shifted became even clearer when Rishi Sunak flew to California to join Joe Biden and Australia’s Prime Minister Anthony Albanese in officially presenting the three countries’ new AUKUS submarine program. China is “an epoch-defining challenge to us and to the global order,” declared Sunak, the recently installed British prime minister, a former banker and globalization winner who had long believed in good relations with China.

Technology would also keep operating globally, but not as globally as its many godfathers and godmothers had intended. Telecommunications and the Internet were, in fact, emerging as the reconstituted global system’s new fault line. It wasn’t just the battle over Huawei and the concerns over Chinese government access to TikTok users’ data. It was also the fear that adversaries could cut the undersea cables attaching countries to the lifeline of modern societies: the internet.

A few weeks into 2023, Chinese commercial vessels did exactly that, severing the undersea cables connecting Taiwan’s Matsu Islands to Taiwan proper and thus the world. 6G, the next-generation mobile-communications system being conceived once again, featured collaboration involving a great number of brilliant engineers. Now, though, the borderless teamwork that had characterized previous generations of mobile telecommunications had vanished. Countries looked likely to have to choose between a Chinese 6G architecture and a Western one.

With Russia’s invasion of Ukraine well into its second year, Russia’s military was so closely matched by Ukraine’s tenacious armed forces and their now-steady supply of Western weapons that Russia seemed unlikely to want to attempt any further invasions. Then again, recent years had taught policymakers, business executives and ordinary citizens not to take peace for granted. And the risk of a world war triggered by a potential Chinese attack on Taiwan was keeping policymakers and business leaders up at night.

No country had believed more fervently in the combination of global peace and global commerce than Germany, which for reasons known to all had decided that war was an unmitigated disaster. Perhaps it was no surprise that more than any other country Germany was now struggling to find its feet in a world moving away from the commerce-fueled peace that had proven such a blessing for it. But the country that had been so committed to the Nord Stream gas pipelines and that had seen its chancellor make the trip to Davos even after his Western peers had opted to stay home was also the country where Scholz’s deputy, Robert Habeck, had now advised companies to diversify supply chains away from China and introduced stricter export controls on companies wanting to invest in China. Mostly, though, globalization’s original supporters and detractors alike seemed relieved. Post-Cold War globalization had been an honorable undertaking, and it had benefited countless people, but it had run its course. “Ideas, knowledge, art, hospitality, travel – these are the things that should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible; and, above all, let finance be primarily national,” John Maynard Keynes wrote in 1933. His words seemed to be coming true.

Independence Through Interdependence

In 2021, Finland had imported 34 percent of its energy from Russia, mostly natural gas. Now the tragedy in Ukraine was forcing Finland to wean itself. A hastily arranged LNG terminal had been brought in to bring American gas to the country. But that was only intended as a temporary fix, and Maria Ohisalo, a leader of Finland’s Greens, saw the disappearing dirty energy as an opportunity to create new green jobs in her country. “The war has taught us that we can’t rely on fossil fuel from other countries,” she told me. “We need more renewable energy made at home. … As a Green politician, I obviously like to think of the whole world as one, but the green shift creates a lot of opportunities for green jobs at home.”

Ohisalo realized Finland wasn’t going to single-handedly pioneer the green shift, but in green tech as in mobile technology it could be the advance team. The EU had just presented a €369 billion package known as the Net-Zero Industry Act that would subsidize the development of new solar technologies, onshore and offshore wind, battery, heat pumps and geothermal energy, renewable hydrogen, bio-methane, nuclear fission and grid tech. At least 40 percent of the EU clean tech should be made domestically by 2030, the EU said.

The green jobs now looming on the horizon might in fact go far beyond the EU’s plan for clean energy. With cheap consumer goods having led to enormous waste and harm to the environment, now was the chance to create longer-lasting consumer products in all kinds of categories. For the green innovation to take off, though, allied countries would need to work together even more closely so that new products and inventions could be sold in large quantities. A large market, Guriev pointed out, was indispensable if the emerging Western-led alliance was to have a shot at saving the climate.

With such tremors under way, the low prices consumers had taken for granted were likely to dissipate. China’s unique fusion of a massive workforce, low wages and considerable efficiency, not to mention centralized power to make things happen, had been irresistible. It has been mostly benign – but it couldn’t last.

Reducing commercial intimacy with China and other countries likely to be part of Beijing’s new bloc wasn’t just a matter of protecting manufacturing and supply chains. Now it seemed prudent to try to reduce the blocs’ financial interdependence too. In the case of another regional financial crisis, countries would certainly have to ask their bloc partners for a bailout, and countries in the other bloc might be reluctant to help. But, as Ohisalo saw it, reducing the commercial links with China and Russia was also a matter of ensuring that Western countries could continue exercising their values at home.

“If we want to become more energy-independent, more technology-independent, if we want to implement the absolutely necessary climate policies and respect human rights, then we’ll have to reverse away from the way globalization is set up today,” she pointed out. “And staying in China brings risks. Just think about China’s use of data.”

Speaking of which, nobody seemed to know quite what to do about TikTok. A bit like post-Cold War globalization itself, what had begun life as enjoyable consumption was beginning to seem distinctly sinister. The app had now been banned from work phones not just by the U.S. Congress and the U.S. government but by EU institutions and a number of member governments, too. The Western institutions stopped short, though, of banning TikTok from officials’ personal phones, let alone ordinary citizens’ use of it. “150 million Americans love our app,” CEO Shou Zi Chew reminded U.S. lawmakers.

In July 2023, NATO’s 30 member states were about to convene for another summit, where they were planning to announce the establishment of a NATO-Ukraine Council. This time they would also be joined by their 31st member, Finland, which had joined the alliance in the spring.

Because Turkey objected to the presence of Kurdish militants in Sweden, Swedes were still waiting for their country to be able to join the alliance. Sweden had reintroduced national service in a new selective format also involving young women, and 61 percent of Germans now supported bringing national service back in their country. China’s Navy, 94 The Milken Institute Review for its part, was continuing its massive expansion. Iran, the globalization-era outcast, had just joined the Shanghai Cooperation Organization, a Eurasian organization led by China and Russia focused on economic, political and military cooperation.

With the world developing in this direction, Treschow concluded that a loose Western- led trading coalition wasn’t a bad thing. Yes, corporate revenues were likely to decline in the first years as companies withdrew from hostile countries. But an alliance of friends and almost-friends would allow the countries involved to set up stable collaboration with an open door for any country wishing to join. It would be a bit of a repeat of the late ’80s and early ’90s, but beginning with a larger group.

Globalization 2.0

After a couple of decades of such a split world, countries might be ready to give globalization another try – less naïvely this time, and addressing issues such as climate change that they had failed to consider in the ’90s. “It will be Globalization 2.0,” Treschow predicted. “And with it, we’ll need to correct all the things that have gone wrong in this round. … We have to hope that there are wise leaders in charge in the U.S., in Russia, in China and in Europe, all at the same time, and that they conclude that we can’t keep going like this.” But such harmony was years away. In 2023, regionalization seemed an attractive proposition.

As July 2023 arrived and greeted the world with the hottest week ever recorded, the Wall Street Journal correspondent Evan Gershkovich was beginning his fourth month in a Russian jail. He’d been arrested by the FSB security service that spring, accused of spying for the United States, and now faced 20 years in prison.

Michael Cole-Fontayn, the banker, was following Gershkovich’s fate, which was such a brazen assault on the freedom of the press that Western news organizations made a point of keeping the reporter in the news. But even more, he was following new legislation in China. An amended espionage law had just come into effect, banning the sharing of “documents, data, materials and items related to national security and interests” – without defining national security and interests. Any expat, and indeed Chinese citizens, now risked arrest on espionage charges.

“It makes the business of business much more complicated,” Cole-Fontayn observed. So concerned were underwriters about China’s direction that companies found it virtually impossible to get political-risk insurance – the sort of insurance that protects against expropriation and political interference.

Foxconn, the Taiwanese company making Apple’s iPhones and other devices in its vast Chinese factories, was already beginning to move operations to Vietnam and Mexico. “We hope peace and stability will be something the leaders of these two countries will keep in mind. But as a business, as a CEO, I have to think about what if the worst case happens?” the company’s CEO told media.

Cole-Fontayn looked back at the world in which he’d spent virtually his whole career. “It was a wonderful lived dream that we were seduced into thinking was the new reality,” he summarized. “That new reality existed for 30 years, and now it’s rapidly unwinding. … The world won’t be the same again.” Three decades and a bit after the Iron Curtain’s fall it was descending again, with a new combination of nations on its respective sides.

A climate emergency, a major land war, globe-linking commerce fracturing: even though globalization had indisputably delivered enormous convenience and a great deal of prosperity to countless citizens of many kinds of countries, the world that Generation Z would eventually take over was also under extreme strain. Has Wandel durch Handel, which translates as “change through trade” and was long a first principle of German foreign policy, failed? I asked Ahmed, the German software engineer.

Yes, he said, “and it has failed spectacularly. I have to say this even as a German. It was our big idea for the world, it was how we wanted to change the world. But in which direction is the change happening? Are we, liberal democracies, changing the world, or are autocracies changing us? Today it seems to be the latter. The notion that we have big ideas and are exporting them, well, we were mistaken. The opposite is happening. And we have to beware of more such influence because things will get worse. How Hollywood and other companies have been adjusting to China’s wishes, it’s very dangerous. We have to be careful that we don’t give up on our values.”

If anything was good about the fracturing world, it was that it was fracturing so decisively that there would be no doubt a remake was needed. That remake was certain to include vigorous cross-border trade, but the next version would have to include all those things post-Cold War globalization had neglected to address: citizens’ views, job losses, the inevitability of geopolitical friction among some trading partners, the need for an even playing field – and, of course, climate change. Globalization 2.0 was certain to be better.