Davos 2023: De-Globalization or Re-Globalization?

This transcript, generated from speech recognition technology, has been edited for web readers, condensed for clarity, and may differ slightly from the audio.

Ian Bremmer President, Eurasia Group: Good morning to everyone. I'm Ian Bremmer and for those of you that are here with us bright and early for the kick off of the formal sessions at this year's Annual Meeting, this is the right session for you to come to. It is about de-globalisation or re-globalisation, but what that really means is it's a different title for the theme, the annual theme, of the meeting this year, which is: can we have cooperation given global fragmentation?

And we have a great panel to discuss that, one of whom is going to be here during my introduction, in all likelihood. So one things I would say, one of the things that challenges me in talking about shifts towards de-globalisation as a political scientist is how overdetermined it is. And I'm hoping that one of the things we can do with our panel is unpack it a bit.

We've heard a lot about polycrisis and our friend Adam has been talking about that quite a bit recently. This idea that it's really just a moment in unfortunate time with massive levels of enormous disruption coming from pandemic and Russian war, on top of underlying climate conditions, extraordinary fiscal responses and the rest and wouldn't that lead to also unprecedented levels of transitory globalisation? Political scientists like me have been talking about cyclical structural shifts in the global order. The idea that we are in a geopolitical recession, that the institutions globally increasingly don't align with the global balance of power. And as that is true with the Chinese as a state capitalist, second largest economy in the world, the United States focused more inwards given its political divisions, the Russians as a rogue.

You put all of those things together, wouldn't you get a structural piece of de-globalisation that occurs until you come out of that bust cycle? And then finally, the economists who also see this as structural in some way, which is that globalisation has gotten extraordinary gains as the world has taken advantage of these massive efficiencies of, you know, differential labour rates and suddenly they're much more competitive and they're much more expensive.

And indeed, we see with technologies, labour becoming less important to capital investment. So, wouldn't that lead to a degree of structural de-globalisation until that plays out? I suspect all three of these are true, but all three of these are not equally explanatory. And our panel will have other ideas as well.

So with that, who do we have? Well, first we have the non-existent Hungarian Minister of Foreign Affairs and Trade, Péter Szijjártó, who I will turn to not first. Then we have had Adam Tooze, we have Ngaire Woods, and we have Niall Ferguson, all of whom I am virtually certain are very well personally known to every single person sitting in this room right now. So, with that, let me go in that order. Skipping over the Hungarian, Adam tell me of those three and any others you'd like to go through. What's driving the shift in trajectory on globalisation that we see right now?

Adam Tooze, Director, European Institute, Columbia University: I like your connection of this theme with the polycrisis idea, because I think that what we do have to wrap our heads around is the conjunction in a particular moment of really very diverse and sort of inchoate almost factors which don't reduce to a common denominator. So I would simply pick two. One is the not exhaustion, but the plateau reached, for instance, in the supply chains story. There were just these gains to be made in particular sectors, notably, for instance, internal combustion driven motor vehicles, which generated huge, more regional than truly global.

But nevertheless, they show up in the trade statistics as globalisation drivers that reaches a certain plateau. And now we're really undergoing a major gear shift, which suggests quite a new pattern of division of labour in the automotive sector, which will change that statistical story. The other end of the spectrum in terms of the sort of drivers, so that's a structural technological microeconomic story, an industrial economic story, at the other end of the spectrum in terms of drivers in the current moment, I, you know, would double down on the geopolitics of the chip wars because that seems to me a vector of globalisation which has a very different kind of force feel to it.

And you know, you can go back and forth on the blame game here, but what we are clearly witnessing right now is a concerted effort to mobilise the resources of the American state apparatus to strike against individual private companies or companies, which in some sense and at least like Huawei, while they are private actors, though of course they are entangled with the Chinese state, and then to go up down the supply chain for this vital technology and just in a surgical way, strike at China's capacity to achieve imports of those. Now, that is a very different process of globalisation than the other one. One final point I would make is that these processes of de-globalisation,

I think, and potentially globalisation has to be set within something which me and other historians tend to call the global condition, which is the state of interrelatedness that doesn't change whether or not you re-polarise it in positive or negative terms. I mean, I was joking over Brexit, it's a little bit like a sexual taboo. The more you try to not think about it, the more you end up thinking about it.

So, when you are building the structures of a great firewall to keep the outside out, are you de-globalising or in some sense actually obsessing about the other that sits there? And that can have long term effects. In due course, you know less about the outside world obviously, and that can then induce genuine decoupling. But in the meantime, I would think of it rather as a sort of negatively polarised interaction. And I think distinguishing those three different levels is a useful way perhaps of getting a handle on this incredibly complex situation.

Ian Bremmer: Before I turn to Ngaire I want to ask you, in the next ten years, if we were to talk on a spectrum from de-globalisation to re-globalisation, where do you place yourself on that? What are your expectations? Just quickly.

Adam Tooze: A new cocktail, a new pattern, a new way in which those relationships are structured. I don't actually expect serious de-globalisation on the trade metric, on the foreign direct investment level. That seems highly implausible.

Ian Bremmer: But we'll be talking about globalisation very differently in terms of the things that are part of it, is what you’re saying?

Adam Tooze: We will still be talking about it.

Ian Bremmer: Yes, indeed. Okay, Ngaire.

Ngaire Woods, Dean, Blavatnik School of Government, University of Oxford: Yeah, I think the chip wars are really interesting because I'm not so clear that it's a straight de-globalisation story. I think the idea that you have massive government investment, trade protections to build an industry, which then if we look at the US in the 50s, 60s, 70s on tech, relied on huge markets to get the quantity through that permitted you to really drive into high quality chips. So I think it's a combination. I think that that the big investments into chips are investments in companies that want global markets, but they'll be separate spheres. It'll be like the Cold War.

So, you have two separate spheres in which each are pushing for markets. But I want to take a step back and think about three foundations of globalisation that we've been seeing crumble, because I think that helps us to see what it would take if you wanted to try to engage a new decade of globalisation. And the first is obviously the social compact, right? The fact that globalisation was born with a view that you needed the consent of the people for globalisation. So protective policies at home enabling a globalising policy abroad.

And we've seen that social compact crumble with people rallying around the banner of take back control. And that tells you that that social contract has crumbled. The second is the hegemon, the role of the leader in the system where you need a leader [inaudible] famous words that's willing and able to actually set the rules, enforce the rules, mobilise a coalition of countries to abide by the rules to some degree, and that leadership of a set of open global rules has crumbled. And there's no obvious leader stepping forward to take its place. Who knows? It might be a coalition, it might be Indonesia and India together that step forward to set new rules. Or they might be regional.

But I think that's the second thing that's crumbled. And the third thing that's crumbled for business and firms is a balancing of rights and duties, a balancing of freedom and responsibility that that if you're going to go global, if we're going to have global supply chains, you have you do have responsibilities as well as the rights and freedoms to go abroad and find the cheapest prices, the cheapest workers, the cheapest factories, you must take with you responsibilities, whether it's for the environment, for the communities in which you work, for human rights and such-like.

The world globalised quickly in terms of opening up market opportunities, but governments were very, very slow to follow up with entrenching and expecting the responsibilities and duties that went with those freedoms and rights. And I think that also has eroded.

So those three foundations, the leadership, the social compact with people and the balancing of rights and duties for firms we've seen crumble. That doesn't mean they can't be rebuilt. But those are the three things, in my view, that need to be rebuilt if you're going to start trying to put back a new global order.

Ian Bremmer: And same follow up question to you, remembering that Adam was more towards stronger globalisation but different definitions. In ten years you'd be where?

Ngaire Woods: So, I think in ten years --one other thing is there are some parts of the world that don't have a choice about whether they globalise or don't globalise. So, I look at the continent of Africa and the fact that as the rest of the world is talking about industrial policy and, you know, closing the doors, the countries of Africa are moving towards a continental free trade agreement. They don't have a choice. They require global markets not just for food import or other inputs, but also to export what they produce. So, in my view, in ten years’ time, we'll see a world of areas of globalisation that sit under a political security umbrella.

Ian Bremmer: Okay, Niall, please.

Niall Ferguson, Senior Fellow, Hoover Institution, Stanford University: Well, I have to confess, I don't like the word polycrisis. I'm with Gideon Rachman on this. It makes me think of polystyrene and polyester things that I never much likes. And I'm also somewhat sceptical of geopolitical recession as a term. I mean, this is just history. It's just how history works. You get stuff is not so perceptible. The economic convergence, the technological change, which were obviously going to alter the way the global economy worked.

You had a financial crisis 2008-9. You've had a populist protectionist backlash which kind of went from to 2016 to 2019. Then you have had Cold War 2 from about 2018 between the US and China, the pandemic, and then a war in Eastern Europe. But this is history happening, and it would be surprising if there weren't structural changes in the way the world economy worked under those circumstances. I think we need to be careful about this term globalisation. We talk about it without specifying what we mean.

So, let's be clear. Global trade relative to global output has flatlined or somewhat declined. And you can point to a peak somewhere after the financial crisis. Global capital flows are definitely down in relative terms, probably peaked out in 2007. If you look at migration, you could argue that there was a peak there. And of course globalisation is partly cultural. The days of the dominance of American culture are clearly in the rear-view mirror.

So, I would say you could make an argument that globalisation peaked somewhere around about 2007, except that, as Richard Baldwin has pointed out, there's a lot of confusion in fact, when you look at the statistics that he, I think rightly points out, should make us sceptical about the idea that de-globalisation is really going on. It hasn't peaked in Europe. I mean, there hasn't been some kind of peak in trade, certainly within the European Union between the member countries. A lot of what appears to be a peak in globalisation, followed by a plateau or decline, just has to do with price movements.

I mean, Baldwin’s absolutely right. Huge distortion is created by this commodity super cycle, which peaks in sort of 2010-11, and then that's really part of what's driving the numbers. There has not been a peak in the globalisation of services. If you're talking about trade in goods, yes, but the globalisation of trade and services just keeps on going. And if you read the Financial Times this morning, you'll see just how little de-globalisation has really altered Apple's business model. It is still basically designed in California and assembled in China. They've gone from 100% of the iPhones to like 90%. So, there's a trend there, but the idea that this is globalisation seems to me to be a classic example of a journalistic narrative that people inhale because it kind of intuitively makes sense that we have de-globalisation now it's in recession or retreat.

Then you look at the data and it's not there. It's really not there. So, you can ask me the follow up question. I'll spare you the effort. This is all a mirage. There is not a major de-globalisation going on here. There are clearly shifts and changes. But let's just take one example. The huge shock disruptive effect of the war. You would think that's hugely reduced Russia's trade with, say, Europe, but you'd be wrong. I mean, actually in dollar terms or euro terms, it's going up because the price of the Russian exports have gone up. So I would just caution against this whole narrative of deglobalization. I think is mostly an illusion like the polycrisis.

Ian Bremmer: Now the polycrisis, that's a little mean, but that's okay.

Niall Ferguson: We didn't come here to just be nice to you.

Ian Bremmer: You're professionally disagreeable. We understand that. We love that about you, Niall. Now, before I'm going to ask for later interventions to be shorter so we can get more of them. But to our friend from Hungary. Well, what I’ve been asking everyone — you can probably suss it — is to what extent we think that the primary drivers of de-globalisation, to the extent that we've seen it or not seen it, as Niall is suggesting, are coming from the polycrisis, that may not exist, from political structural factors or economic structural factors. Give us a couple of moments on how you respond to that.

Péter Szijjártó, Minister of Foreign Affairs, Hungary: Well, thank you so much and I really do apologise. I didn't want to be impolite to any of you, but for some reason, the Civic Aviation Authority wanted us to see Zurich at least three times from the air before landing. So that's why we’re late by couple of minutes. I really apologise for that.

Well, I'm coming from a rather small or midsize landlocked country, which does not really have natural resources but has one of the most open economy in the world, at least among the top ten. And in the meantime, we are geographically somewhere between east and west, namely, we are located in Central Europe. So for us, for us Hungarians, for us Central Europeans, a pragmatic and rational cooperation based on mutual respect and trust between the east and the west is absolutely in our interest. So, it's our national economic interest.

But even more than that, it's our national security interest that east and west can talk to each other and can cooperate to some extent. Now, until the beginning of last year, that was kind of a likely scenario. But as we were approaching the end of 2021 that was a kind of likely scenario — east and west could work together.

From the beginning of 2022, it became more and more obvious that there's going to be a huge, let's say, strike in this possible cooperation. And this is the worst possible news for the region where I'm coming from, given the fact that the confrontation between blocs based on geography is always bad for those who are geographically in the middle.

And we central Europeans have been in the in the middle during the Cold War where we were losers of the Cold War, and now we are in the middle of something that I'm afraid will be again Cold War 2.0, or something like that, although we wish it would not happen. But this is really, really bad news for us because the Eurasian principle, or the idea of Eurasian cooperation, used to be a very good basis for economic development in Europe. And now obviously this is now only a dream, a faraway dream, and far away from reality.

On the other hand, what I think was another problem when it comes to something that we call globalisation, although I would be really surprised if we would agree on a definition of what it means, but whatever we think around globalisation, one bad phenomenon was what I think is that the globalisation was used as a kind of a tool by big powers to spread in a very aggressive way their political narrative or that political approach. So those who have been representing somewhat different than international mainstream, have been judged, criticised, stigmatised and kind of pushed out from different forms of cooperation.

And I think that was that was really an unfavourable, a bad, phenomenon which didn't help the global cooperation. So, what we have a fear about is that we are coming to a stage of global confrontation based on geographic blocs instead of global cooperation. So, if you ask me how we should press or push the reset button, I think there would be three issues which would be game changers for the future.

Number one: whether mutual respect will return to international political relations or not, because unfortunately, in the recent period of time, we have seen a total lack of mutual respect. Second: whether everybody would understand that physical reality cannot be overwritten either by political approach or by ideology. And number three: whether the communication channels will be kept open among those who are not very happy to talk to each other, because if the communication channels are being closed, then I think we give up the hope for peace or we give up the hope for a pragmatic, normal global cooperation which might be called in another terms, globalisation.

Ian Bremmer: I will push you quickly on something other than the follow up there, given what you've just said, which is of course to the extent that there is a Cold War coming and I would argue it's worse than a Cold War then I mean, Hungary's at least on the right side of it in the sense that you're in the European Union. But it's hard to argue that there's a bloc in the sense that with the Cold War, you know, east versus west, this is kind of Russia, and Belarus is kind of Russia, but aside from that, there ain't much going on. So you talking just about the isolation of Russia or are you talking more broadly about a global phenomenon that also has implications?

Péter Szijjártó: Well, I totally agree with you that how it looks now what is coming might be much worse than Cold War used to be. I totally agree with you, especially from our perspective, because I understand that from hundreds or thousands of kilometres away, it looks different. But Russia is part of reality and the closer you are geographically speaking to Russia, the more it is a reality and more impact it does have, regardless of the fact that you are belonging to another integration as we are belonging both to NATO and the European Union. But Russia is a reality.

Not to speak about the energy issues and all other things, what I say is that channels of communications should be kept open, especially putting into consideration that you might be right that the other side through this way what you spoke about is not a monolithic block. But I'm not quite sure that when it comes to a question of “either-or” that there will not be many countries joining the other side. So my fear is that at the end of the day, artificially or not, it can be formed as a isolation or division between two monolithic blocks, which definitely should be prevented somehow.

Ian Bremmer: Okay, very good. So, an interesting little discussion we had on the chip war and technology in the context of this. Especially as we're forward looking here, I want to get into technology because it is true that the US, at least in terms of high-end semiconductors, is trying very hard to create a policy of containment vis-a-vis China and intends to get allies on board and so far has had some success. As we look forward over the next ten years, and you're talking of a new cocktail, I wonder to what extent that one of the biggest pieces of de-globalisation is algorithmic. In other words, I mean, if you've got 1.4 billion people in China who everything they see, interact with, including the economy, is intermediated by a set of Chinese algorithms that are completely different from the algorithms that we are engaging with. Is that going to drive a piece of globalisation or is that really irrelevant to the conversation? Doesn't matter? Or maybe not even happening? Let me let you respond to that. And if you want also talk a little bit about other trends in technology that you think are going to change the way we think about globalisation. And Adam, I'll let you start since you brought it up.

Adam Tooze: I like the way you develop the argument, the story that even if we grant that there is this deliberate effort on the American side to uncouple China at the high end of chips, right, that then produces all of these follow-on reactions, part of which then is a desperate Chinese struggle to find new ways of building their own ecosystem, a move by Chinese corporates into new physical spaces, all of which fall under the rubric of re-globalisation, where one can find oneself agreeing with Neil that this could end up just being a statistical chimera.

And in the meantime, we have Taiwanese companies contemplating major FDI in, you know, unlikely parts of the United States, which are aspects of a kind of re-globalisation, you could say a bits of Texas or Ohio, or whatever. Large parts of the American workforce are going to be expected to conform to Taiwanese standards, which is going to be a huge shock when that happens algorithmically. I think it's going to be interesting. TikToks. I'm not a big TikTok person, but if TikTok’s anything to go by-

Ian Bremmer: Shocking to me, by the way.

Adam Tooze: People say we'd be good on it. I'm sure Niall would be fantastic on TikTok.

Niall Ferguson: You'd be amazed to hear that I wouldn't have anything to do with it.

Adam Tooze: No, no, I've heard you on it, but I'm just saying that the persona would work really well. The algorithms don't necessarily stay within, you know, their intended political cultural sphere. I mean, that would seem to be an export or the effective algorithms that sit within K-Pop, for instance, is another phenomenon of this type. I mean, that's algorithmic music if there ever was algorithmic music, it’s machine produced effectively. And it's hugely quaffable all over the world, so I'd be sceptical about the enclosure. I mean, I see your basic point, but it doesn't seem to me to predict clearly a de-globalisation.

Niall Ferguson: Ian, can I make a suggestion here? Which is the distinction that seems relevant to me is between software and hardware. Software and platforms will continue to globalise. I struggle to imagine the US in fact banning TikTok and K-Pop will continue to proliferate. My 11-year-old son makes me listen to it on the school run. Actually, BTS is quite good; sort of Motown, but with strange accents. So, I think the software piece just goes on globalising. And you can see that if you look at the data on cross-border bandwidth, it just keeps growing. And I think that that trend will continue. And there'll be some cognitive dissonance, because the world of hardware will be quite different. Because the world of hardware is the domain of Cold War 2. The United States has a strategy of technological containment. It's a bit like in the Three Body Problem where the [alien] alliance tried to halt the technological advance of Earth. That's exactly what the US is trying to do to China.

Ian Bremmer: A Chinese sci-fi book that came out a few years ago.

Niall Ferguson: Yeah, everybody should read it. I think it's so far going quite well because it's not obvious to me that China has a shot at replicating TSMC (Taiwan Semiconductor Manufacturing Company) on the mainland. It doesn't really have a chance of capturing it because it would just be a pile of rubble if they invaded Taiwan.

So, in the realm of hardware, Cold War 2 is going to be real and it will get more clear there are going to be two blocks in the realm of hardware, the great Eurasian block that, in some ways, the sanctions against Russia are accelerating the formation of, is going to be one world and the other world is going to be an American led world with allies in Europe, but more important allies actually in Asia. And the interesting thing about this, and I want to pick up on something that you said, is that there is a clear risk that Cold War 2 becomes a hot war. That's what's scary about it, because if you make Taiwan the focal point, it's much, much more of a dangerous focal point than Cuba was in 1962. So, it seems to me that at the heart of this strategy, although it sounds technocratic — “we will just stop them having high end semiconductors” — you were in fact creating an obvious casus beli, which is the future of Taiwan.

Ian Bremmer: In other words, the Americans are doing more to change the fundamental status quo on Taiwan than the Chinese have over the past years.

Niall Ferguson: The Chinese wanted globalisation to keep going because it was really working for them, and that's why Xi Jinping would come to Davos and they would talk about win-win when you went to Beijing. And they would take it if the United States suddenly proposed détente, but the United States is not going to propose detente because there's a bipartisan consensus in favour of the containment of China.

Ian Bremmer: Ngaire feel free.

Ngaire Woods: Yeah, I'd like to I'd like to come back to the chips war and a point you made about competition over hardware, because I think the lines between government and business are being redrawn in a way that's going to spill over into other sectors of business. So, in the tech sector, we can see companies being offered on the positive side, a kind of national purpose, a role in national security and national competition, being offered investments and backing by government.

But let's not forget that in practice, when that means big government subsidies, tariffs and trade protectionism and the language of “friendshoring” that it can go one of two ways. The East Asian Tigers showed is that it can be fantastically successful when the national purpose is existential, when the investment flows are incredibly focused on economic growth, and when you've had a war which has reset your society and made a society of real opportunity, in other words, that new industrial policy can be extraordinarily successful. But let's not forget that in most of the rest of the world it created bloated, entitled white elephants and businesses that didn't work, that just became rent seekers. And I think that's pretty important because it might just be hardware, but actually it's not just hardware, it's rapidly moving. Is it PPE masks? Is it pharmaceuticals? Is it minerals and resources? I think the sense that national security now requires a new relationship between governments and business is one that every sector of business needs to be watching closely here.

Ian Bremmer: Péter, and you want to talk about China. A little bit in the comments.

Péter Szijjártó: Actually about the efforts now which are around in, let's say, the Western part of the world to decouple the Western economies from China, which I think will not function. And I can rely on our own national experience. You know, in Hungary, the backbone of national economy is the automotive industry. Around 30 to 35, 30 to 33% of the output from industry comes from the automotive industry. And now we are putting a lot of efforts in becoming the European hub for the electric transition.

So, to be a hub of Europe when it comes to the electric automobile sector, so far we are number three in the world when it comes to production of electric batteries. And now the biggest electric battery factory of Europe is starting to be constructed in Hungary. And guess what? This is Chinese. Seven out of the top ten companies in the world when it comes to the production of electric batteries are Chinese. The other three are Korean. So, there are no Western ones there.

And if you look at the Western, European, Western European automotive companies, they have been basically putting most of their eggs in the basket of electrification, namely that from 2030 or from the 2030s, they want to phase out the cars with the traditional powertrain from their own portfolio and focus on electric. But if they focus on electric and electric car, it doesn't make sense without having an electric battery. And the electric batteries are being produced by the Chinese and the Koreans. So what happens?

They need to couple themselves, instead of the efforts of decoupling. In the case of Hungary, we are the only country next to Germany and China where the three German top premium carmakers are having or will be having a factory, they all put their electric efforts, the heart of their electric efforts, into Hungary. And the number one, number six and number seven electric battery companies from China and Korea, respectively, are in Hungary as well. And the CEOs of the Western European companies keep on calling me to bring more of their Chinese suppliers, electric battery manufacturers and part manufacturers to Hungary to be as close as possible to them because this is the secret and the key to their success. So, while on the political level, I see strong efforts, at least in communication, to decouple the economies on the reality level, on the physical reality level, on the corporate level, I see a very strong coupling. And we in Hungary as being in the middle, this is one of the advantages of being in the middle, that that we can be and we are already a meeting point.

Ian Bremmer: To be fair, not just on the corporate level. If you talk to governments, non-American governments, I mean, even Japanese Prime Minister Kishida wants a dramatically tighter national security relationship with the US, but he also wants more exposure to the Chinese market. He wants that, the South Koreans want that, the Europeans want that, Scholaz obviously wants that, Macron.

So I mean, to the extent the Russians are isolated geopolitically from the West because of their behaviour, the Americans as a government, the private sector and all the allies don't want to be forced to choose between the US and China. That is a brake on the kind of decoupling you're talking about. You bring us from technology to global supply chains and also energy and the shift, dramatic shift, from fossil fuels through transition to what comes next. And I'm wondering, I'd love to hear whoever wants to come in first, feel free. What we think the implications are as we have very different countries that have critical nodes in supply chain, of which China is obviously one. When we talk about critical minerals, as well as a much more decentralised energy platforms that are post-carbon compared to what we've seen around oil and gas. Who'd like to start with that?

Niall Ferguson: Well, let's again not exaggerate what's changing. The more people talk about Green New Deals and green transitions, the less they happen. Two years ago, you would have been a mug to invest in ESG. You would have been smart to invest in coal. So, the law of unintended consequences is very powerful. A lot of the policies the governments have adopted to try and accelerate decarbonisation have actually been backfiring quite badly. And I think we again exaggerate the speed with which this transition will happen, partly because we come to Davos and we talk to Europeans and we get the impression that what happens here really matters. But what happens in China matters much more.

And, you know, in the time since Greta Thunberg’s birth, China is responsible for about 85% of the increase in coal consumption and about two thirds of the increase in CO2 emissions. So, I don't think there's as much change in the energy space, as people would like to see, particularly people who come to Davos. Again, there's enormous inertia for the same reason that globalisation is hard to kill. You know, even if you want to kill it, even if you say I'm against globalisation, think of all those governments, you know. Christopher Dell’s here, he was part of the Trump administration, there was a real sustained effort to push back and use a variety of different policy tools to push back.

And if you look at the US-China bilateral trade deficit, it moved a bit, but not that much. Globalisation is hard to kill. What I called Chimerica back in 2007 for the reasons you just gave Peter, is incredibly resilient. It's also really hard to get the world off fossil fuels. I mean, we're trying, but we haven't really got very far is the harsh reality. And in that sense, I think the puzzle will be for future historians. Why did North America, and not just the US, why did North America not take advantage of the opportunity that presented itself? Why, in the end, did they let Saudi remain the swing producer, when they could really have ramped up production and reduced the dominance of OPEC? I don't think the world has changed as much as we think it's changing in this respect. Adam may disagree. I know you're working on this, Adam. I'd love to hear your thoughts.

Ian Bremmer: Before we go to Adam there, and I'm going to go to you in a second, I just want to let you know we will have time for one or two questions, good questions, tight questions. Think about them and I'll be looking to call on you. Adam.

Adam Tooze: Well, I think even if you don't concede, Niall’s full status quo thesis about the world.

Niall Ferguson: Inertia, not status quo. But it’s shifting.

Adam Tooze: Allow the energy transition to happen, then I think your other claim, namely that globalisation trends will in fact continue in various ways would still [inaudible], because the effect of the energy transition is essentially to create a new set of interdependencies and to be quite adventurous and quite interesting and definitely reach out beyond the boundaries of, say, the European bloc or even the North American bloc. Europe anyway, its energy transition has to be interconnected and there's a lot of extremely excited talk about connections there. Africa, for instance, which would rely on cheap solar, most of which would effectively come from China and the battery technologies as well. So, I would see that as one of the forces driving towards a new cocktail narrative of globalisation rather than simple continuity, but certainly not a story that drives towards regionalisation or total unbundling, a disintegration of the world economy. It's a new set of connections of the shape very rapidly as well. So we would disagree there. But I think the overall impact is one to just remix the description.

Ian Bremmer: Ngaire.

Ngaire Woods: The somewhat kind of negative tone of this, which is absolutely right in describing the status quo, just pushes me to think: so what is really required now on the energy transition? And the thing that's missing is clear permanent government goalposts. In other words, not governments trying to go and do house cladding and solar panels themselves, but governments doing the one minimum thing that governments need to do, whether it's the Chinese government, the European Union government, African governments, or the American government. And that's to set the rules that create an ecosystem for every company in the world to then make excellent decisions on the energy transition. You know, first, obviously a carbon price, not a pretend price, but a real carbon price that the companies can know is not going to change. Companies need to know that the goalposts won't shift every year or every three years or every election cycle. So, I think that's the one thing about the energy transition that we now absolutely have to set our minds to. We shouldn't let it become a partisan football.

If one government is going to legislate a carbon price and the whole private sector knows that the next election will bring a government that unravels that, it's impossible to make the kinds of investments that are required for the energy transition. So now is a moment not, I think, to criticise all the little things that governments aren't doing, but rather to focus governments on all sides of the geopolitical competition on the one or two clearest, simplest things that they need to put in place for every other stakeholder in the world to start making decisions that take us towards an energy transition.

Ian Bremmer: Peter, you want to comment?

Péter Szijjártó: I think the biggest problem here is, according to our understanding at least, that “green” became an ideology instead of a real attempt to protect the environment. And I think that the game changer will be whether nuclear will be adopted as a green and sustainable way of generating electricity or not. In Hungary, as I told you, we are not rich in natural resources. We don't want to ruin our environment either. That's why we do believe in nuclear. We are now doubling the nuclear capacity of the country. We have a more than 40 year long experience with using nuclear, which proved to be a cheap, safe, green, sustainable way of generating energy. Millions of tons of CO2 emission is being prevented. Billions of cubic metres of important gas is being avoided with nuclear. But as long as there is an ideological debate about what is green and what is not and not a professional one, I think this whole principle or whole idea of green transition might fade. So, I think if we can come back to a professional way of discussion instead of the discussion about ideologies, then we might be successful.

Ian Bremmer: Turning to the audience. Go right ahead, we'll get you a microphone and then I'll try to get to you, two. So, try to be tight and get two questions.

Audience member 1: It's a question for Hungarian minister. Sir, you essentially are saying that Hungary is going to become essential for the car industry in Europe, but Hungary is also not a fully free country, according to Freedom House. So is your message that in the end that you become essential and it must be a deal with Europe, that Europe should accept a different political model in Hungary, even as it is an essential country for the industry in Europe?

Ian Bremmer: I'm hoping the next question will actually be a globalisation question, but you can certainly have a tight response to it.

Péter Szijjártó: Kind of a question of globalisation. Look, since we have been in office since 2010, this political debate has been around. Definitely our government does not represent what is being represented by international liberal mainstream. Definitely we are a right wing, patriotic Christian democratic government, which is not a usual phenomenon currently in Europe, but one thing must be respected: this government has won the last four elections with a landslide, which means that whatever we are doing is based on the will of the people and the question what democracy is. We do believe that democracy means that you fulfil the will of the people, and this government definitely does it. We understand it's not a liberal government, so the liberal mainstream will always criticise us. This is something that we have to live in.

Ian Bremmer: I feel like we have probably not advanced that conversation very far. That's quite all right. It's a very tight answer.

Audience member 2: Hello. I'm wondering if you think it's possible to have globalisation and decentralisation at the same time?

Ian Bremmer: And are we talking specifically about the energy field or more broadly political?

Audience member 2: More broadly political.

Ian Bremmer: That's a good question.

Adam Tooze: I thought that was a really interesting point that you made Ngaire about hegemony. And I'm not sure I agree that hegemony is crucial to globalisation. And I think one of the ways of describing a new cocktail is that it's in fact a more polycentric form of globalisation that we're heading towards, in which, as it were, there may indeed be a rupture in the Chimerica model, which was the two great powers of the world as it were, locked together. But that isn't going to obviate or even retard. In some ways, it may even accelerate regional logics of integration, which would fit your model of decentralisation that are not amenable to or necessarily dependent on the dollar-based system, for instance. They still may use offshore dollars to do units of accounts and stores of wealth. But I think that's actually a rather a good way of encapsulating what I would see the next ten years as about, is a sort of decentralized, polycentric, to use the poly word again, globalisation.

Ngaire Woods: I agree and I think it's a great question and we've already seen a certain decentralisation in finance, where individually countries have amassed their own foreign exchange reserves and swaps agreements to give them resilience. And then regionally they've created deeper arrangements in several continents. And that's why the financial crisis, which is upon us at the moment, is being slowed by these resilience measures that have been taken. I think we are seeing signs that that is going to flow over into trade and that's actually something that I think is very good. It's good for one vital thing, which is competition across the global economy in a world which looks very monopolistic.

Adam Tooze: To give a concrete example, think about the way the Gulf states are sponsoring both Egypt and Pakistan, which makes Egypt and Pakistan relatively less dependent on the IMF, for instance.

Ian Bremmer: We'll see to what extent they actually are able to really fill the challenge.

Niall Ferguson: Yeah, I mean, I have to say from a historian's vantage point, the first stage of globalisation was pretty inseparable from British imperial hegemony and the second age, if you want to call it that, had a lot to do with the American commitment after World War Two, with increasing conviction into the 1980s that there should be a world of free trade and then increasingly free capital movements and migration. And when the US lost faith in that vision, then I think we had a kind of hinge point. Ultimately, globalisation is driven to an enormous extent by the great powers of the world. When they essentially agree on it, you know, when China joined the WTO, you had peak globalisation. That was the age of Chimerica. Now that we're in Cold War Two, you end up with really two global orders, one of which is US led, the other of which is Chinese led. And while Americans explicitly use America first, it's one of the most astonishing continuities between the last administration and the Biden administration. The Chinese implicitly believe in China. First, the Chinese will make policy, we know this, in order to prioritise the dominance of the CCP and anything that poses a threat to that gets jettisoned. And that is why, when it comes to questions of climate policy, the priorities of the CCP will not be to halt global warming. The priority will be to preserve the position of the CCP. A growth rate of 3%, which is what they had last year, isn't sufficient for the stability of that regime. They'll do whatever it takes to avoid a further diminution of that growth rate, which will be hard now their population is shrinking. Breaking news.

Ian Bremmer: By the way, before I turn to Peter, Cold War Two is like fetch: no matter how many times you say it, you can't make it occur, since we're picking on titles. Peter.

Péter Szijjártó: You know, we in Hungary say Hungary first. So I mean for us it's-

Niall Ferguson: Everybody says that, right?

Péter Szijjártó: It's not an insult that President Trump said America first. It was kind of natural for us. He was the first one who said that, actually everybody acted accordingly, but he said that. At least he was honest. So, I just want one sentence in this regard. When we speak about decentralisation, if we mean under that taking into account the national specificities, I think this is a must. So, I can't foresee any global cooperative system without taking into consideration the national or the regional specificities.

Ian Bremmer: So very different perspectives on the panel. But don't panic. Sober, analytic, not cable news headlines from your crazy uncle. Globalisation is moving. It is shifting course, it is not falling apart. I think we can all agree on that. Thank you for attending and we look forward to seeing you over the course of the week.