Merryn Talks Money How the US-China Rivalry Is Reshaping the Global Economy with Neil Shearing
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Oct 20, 2025 Neil Shearing, the group chief economist at Capital Economics and author of The Fractured Age, discusses the shift from hyper-globalization to a world divided into US- and China-centric blocs. He highlights key sectors like semiconductors and biotech that are becoming strategic in this rivalry, predicting increased volatility in inflation due to supply chain reorientation. Shearing also explores potential geopolitical flashpoints and urges investors to be cautious about exposure to China while recognizing opportunities in gold and critical minerals.
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When Hyper-Globalisation Began To Fray
- The recent wave of hyper-globalisation began around 1989 and relied on integrating economies to spread prosperity and values.
- That era started to fragment after the global financial crisis and decisively shifted when Xi took power in 2012.
Rivalry, Not Deglobalisation
- The key change is US-China rivalry, not wholesale deglobalisation in the data.
- Policy actions (tariffs, tech controls) reflect that strategic rivalry rather than a return to isolationism.
What 'Fractured Age' Actually Means
- Fracturing means the world splitting into US- and China-centred blocs while many flows remain global.
- The economic impact depends on how deep the split is and how other countries align.
