Geostrategic globalization: US-China rivalry, corporate strategy, and the new global economy

Geopolitical rivalry has intensified to a degree not seen since the Cold War. The US and China have embraced interventionist state-capitalist practices in competing attempts to gain control over the transnational networks that underpin globalization. As a result, multinational corporations (MNCs) are exposed to unprecedented levels of geopolitical risk. Most MNCs are responding in one of two ways. Some hedge and try to remain aloof from the US-China rivalry, while others align with the geostrategic objective of states in order to secure patronage (e.g. subsidies and public contracts). If MNCs maintain global production networks bridging the US-China divide they will attenuate the fragmentation of the global economy. Alternatively, if MNCs align with states' geostrategic objectives, they will accelerate economic fragmentation. We conclude that this emergent meta-context and MNC risk mitigation strategies are shaping what we refer to as geostrategic globalization.