Commentary:Globalization’sOldStoryNoLongerExplainstheWorld

* Globalization is slowing as “America First” replaces “Pax Americana” in the global order.

* Governments are shifting toward narrower defense, trade, and supply-chain pacts.

* Rejected by the U.S. in 2013, a relationship of equals with China has now arrived.

In the years when globalization seemed to be racing ahead, the story the world told about itself was flatter and more linear.

At the turn of the century, Thomas Friedman captured the mood in his bestseller The Lexus and the Olive Tree: Understanding Globalization. The book described globalization as a struggle between two forces: the pursuit of prosperity and modern development, symbolized by the Lexus luxury car, and the desire to preserve older identities and traditional ways of life, represented by the olive tree.

From that framework came ideas such as the “Golden Arches Theory,” which held that middle- and high-income countries linked by commerce were less inclined to fight one another, and the theory of “democratic peace,” which argued that democracies tend to resolve disputes with one another by means short of war. Together, they offered a vivid explanation for a post-Cold War international order in which peace and development appeared to be the dominant themes.

That set of theories, grounded in wealth accumulation and material prosperity, has become less convincing as globalization has slowed and the international order has shifted from “Pax Americana” to “America First.”

The world’s story today has more layers, more complexity and more detours.

Start with the layers. The World Trade Organization and the annual conferences of the UN Framework Convention on Climate Change once reflected the world’s ambition to marshal humanity’s collective resources to address crises and spread prosperity. I reported on the UNFCCC summit in Copenhagen in 2009, when leaders of most major countries gathered in what felt like an unprecedented moment. China’s entry into the WTO in 2001 was likewise widely seen as one of the most important events in the organization’s history, helping create a period in which China and the world developed together and benefited from each other.

In recent years, however, the grand multilateral narrative has nearly stalled, and in some areas gone into reverse. The WTO is struggling. The annual U.N. climate meetings have produced limited progress and draw far less attention than they did a decade ago. Perhaps the biggest blow to this multilateral story has been the faltering of the once-ambitious U.N. 2030 Sustainable Development Goals.

The World Health Statistics Report 2026, released May 13, showed that global health development is uneven and slowing, with some areas moving backward. The report indicates the world is no longer on track to achieve any of the health-related sustainable-development targets by 2030. As countries increase defense spending in part by cutting international aid, indicators for global development and health could deteriorate further.

In place of sweeping multilateral frameworks, governments are turning to bilateral and plurilateral arrangements focused on defense, trade and supply-chain security. Australia offers one example. To protect its export-oriented economy, it has signed bilateral free-trade agreements since 2020 with India, the United Arab Emirates, Indonesia, Hong Kong SAR and Peru. It has also joined the China-led Regional Comprehensive Economic Partnership and recently completed a bilateral free-trade agreement with the European Union.

Since signing a free-trade agreement with neighboring New Zealand in 1983, Australia has concluded only 20 such deals in total. Canada Prime Minister Mark Carney’s call for middle powers to band together is another stress response among ‘like-minded’ countries at a time when the global narrative is losing momentum.

The second feature of today’s narrative is complexity. It isn’t only developing countries that worry about traditional culture and identity while pursuing growth and climbing the value chain. People in developed countries, which long dominated the global narrative, increasingly worry about losing their own central status.

The “take back control” message of Brexit a decade ago and the recent right-wing “Unite the Kingdom” demonstration in London were both filled with anxiety over immigration and fears that white majorities are losing their place. U.S. Vice President JD Vance has repeatedly said that European countries risk “civilizational suicide” because of their departure from traditional Christian values. Across major European countries, far-right parties have been leading in more opinion polls. The olive tree has been replaced by Victorian architecture.

The third feature is the detour. Europe, facing the rapid advance of China’s new-energy industries, including electric vehicles, is now pressing Chinese EV makers to build factories in Europe and transfer technology. Jake Sullivan, the former U.S. national security adviser, recently used Chinese-style terms such as “industrial policy” and “patient capital” in an essay in Foreign Affairs. Such language can make the world feel as if it has shifted into another era. Similarly, Beijing’s emergence over the past half year as a center of global diplomacy inevitably recalls Washington’s K Street narrative, shorthand for the lobbying corridor of the U.S. capital.

During U.S. President Donald Trump’s just-concluded state visit to China, the two sides affirmed a constructive strategic-stability relationship. In my view, that means the U.S., the world’s largest developed country, has for the first time agreed to define its most important bilateral relationship on an equal footing.

In 2013, Washington declined to accept China’s proposed concept of a “new type of great-power relations,” in part because it was seen as possibly ceding Asia-Pacific leadership to Beijing. Thirteen years later, what once seemed out of reach has returned: a relationship of equals.

Huang Shan is a London-based advisor for Caixin Insight.

Contact editor Lu Zhenhua (zhenhualu@caixin.com)