Geopolitical Concerns takes a look at the U.S.’s struggle to maintain strategic leadership as rivals like China and Russia deepen alliances and invest in long-term energy infrastructure, while political transitions in Japan and instability in Europe further reshape the global order.
Geoeconomics examines how the global economy is increasingly being driven by geopolitical competition and economic statecraft, as the U.S. imposes aggressive tariffs, China leverages strategic market access, and Europe struggles to adapt its outdated cooperative frameworks—while financial markets surge amid volatility, currency instability, and investor flight to alternative assets like gold and bitcoin.
Global Junctions explores the global investment surge in AI and green infrastructure and how it is redrawing industrial and financial landscapes, with China advancing a coherent deployment strategy while Western markets face rising systemic risks and growing dependence on fragile supply chains.
Global Trajectories reviews the Gen-Z-led protests across Africa and Asia that are challenging entrenched political systems amid rising frustration over inequality and corruption, while global power is increasingly shaped by strategic control of resources and technology, from China’s hydropower dominance to the U.S. regulation of stablecoins.
Geopolitical Concerns
America’s Budget Dysfunction Has Geopolitical Costs
Daniel B. Baer, Foreign Policy
The Real China Model: Beijing’s Enduring Formula for Wealth and Power
Dan Wang and Arthur Kroeber, Foreign Affairs
France’s Fifth Republic is in unprecedented turmoil
The Economist
The China-Russia Axis Is Getting Firmer, and It’s Built on Gas
Keith Johnson, Foreign Policy
Japan Set for First Female Prime Minister Amid U.S. Friction Over Trade, Security
Jason Douglas and Junko Fukutome, The Wall Street Journal
The United States faces growing challenges in sustaining global leadership amid internal dysfunction and shifting power dynamics. The ongoing budget paralysis in Washington shows a deeper erosion of institutional capacity that hampers strategic coherence at a time of heightened global instability. As Congress repeatedly fails to pass stable fiscal legislation, America’s ability to allocate resources toward long term priorities remains constrained. The spectacle of political brinkmanship not only projects weakness abroad but also diminishes U.S. credibility in defending democratic governance against authoritarian rivals. Simultaneously, China’s state-led industrial strategy demonstrates the contrast between Washington’s short term political cycles and Beijing’s long term planning. Through massive investments in energy, digital, and transport infrastructure, China has transformed itself into a technological powerhouse, securing dominance in electric vehicles, renewable energy, and advanced manufacturing. This “deep infrastructure” model, anchored in process knowledge and scale, has made China’s economic and technological strength a structural feature of the international system.
This divergence is reshaping global alignments. Russia and China have deepened their strategic partnership, binding their economies through energy cooperation that circumvents Western sanctions. Recent Chinese purchases of sanctioned Russian LNG and plans to expand pipeline networks signal a durable geopolitical compact, locking in long term resource flows priced in local currencies. In parallel, Japan is entering a new political era with the expected appointment of Sanae Takaichi as its first female prime minister. Her conservative platform and willingness to revisit trade terms with Washington may test the resilience of the U.S.-Japan alliance even as she supports greater defense spending and technological investment. Across the Pacific, Europe faces its own turbulence: France’s revolving door of prime ministers has pushed the Fifth Republic into uncharted instability, rattling markets and undermining President Macron’s centrist project.
Geoeconomics
The Return of Economic Statecraft
Francesca Ghiretti, RAND
Investors Are Fretting That the Stock-Market Rally Is on Borrowed Time
Krystal Hur, The Wall Street Journal
Global currency market swells to $10tn a day in tariff turmoil
Ian Smith and Emily Herbert, Financial Times
A.I. Is Driving a Stock Market Rally in China, Too
Meaghan Tobin, The New York Times
A New Wall Street Trade Is Powering Gold and Hitting Currencies
David Uberti and Jack Pitcher, The Wall Street Journal
The global economy in 2025 is increasingly defined by the return of economic statecraft, as trade policy and power politics intertwine. The United States’ “Liberation Day” tariffs and China’s strategic use of market access have forced Europe to confront a world where rules yield to leverage. The EU’s prior framework of “economic security” built on resilience, cooperation, and WTO legality is proving inadequate in a system now driven by unilateral measures and coercive tools. Brussels recognizes the need to evolve from defensive regulation toward active statecraft but remains constrained by internal divisions and slow decision making. This shift in the international economic order has already reverberated across markets. Foreign exchange volumes surged to a record $10 trillion a day as investors scrambled to hedge against the volatility triggered by tariff wars and political shocks. The dollar’s dominance endures, but the turbulence has revealed how currency markets now serve as the frontline of global uncertainty, linking sovereign debt, trade flows, and political risk more tightly than ever before. Financial markets mirror this broader sense of fragility beneath exuberance. The U.S. stock rally continues on the back of falling rates, tax cuts, and AI-driven optimism, yet stretched valuations and speculative trading echo pre-crisis patterns.
In China, an AI-fueled surge has driven tech giants like Alibaba, Tencent, and SMIC to triple-digit gains, transforming the MSCI China Index into one of the world’s best performers and signaling renewed investor confidence in Beijing’s innovation agenda. But these rallies are occurring alongside growing caution. Investors worried about fiscal deficits, tariff spillovers, and institutional strains are hedging through the “debasement trade,” pouring capital into gold, silver, and bitcoin as alternative stores of value. Gold’s record climb past $4,000 a troy ounce, alongside weakening currencies in Japan and Europe, reflects a deeper erosion of faith in fiat stability. Across continents, markets are buoyant yet brittle, propelled by liquidity, technology, and political force, but shadowed by the recognition that power, not policy consensus, now sets the rhythm of the global economy.
Global Junctions
The murky economics of the data-centre investment boom
The Economist
As America fumbles, China races ahead
Fareed Zakaria, The Washington Post
AI’s Real Dangers for Democracy
Dean Jackson and Samuel C. Woolley, Journal of Democracy
Europe’s green tech renaissance: seizing opportunities while guarding against over-reliance on China
Alicia García-Herrero, Bruegel
The accelerating investment boom in artificial intelligence and green infrastructure is creating a new industrial map defined as much by speculation as by strategy. Massive spending on AI data centers, chips, and energy systems, projected to exceed $5 trillion globally over the next five years, has sparked both optimism and anxiety. While firms like OpenAI, Nvidia, and Oracle race to expand computing capacity, the gap between supply and sustainable demand remains wide. Financing is shifting from traditional real estate funds to private credit firms and sovereign wealth investors, heightening systemic risk as credit quality weakens and new entrants crowd into the field. The resemblance to the late 1990s telecom bubble is increasingly difficult to ignore: isolated sites, uncertain revenue models, and interlinked financing structures could leave the AI ecosystem vulnerable to overcapacity and defaults. At the same time, China is transforming the uncertainty of others into momentum. Having corrected course after years of regulatory overreach, Beijing is now integrating AI, robotics, and green technologies into a coherent national strategy. Its focus on adoption, embedding AI into logistics, cities, and health care, contrasts with Washington’s pursuit of frontier research. By prioritizing scale and real-world deployment, China is positioning itself to shape the technological architecture of the next global economy.
Yet these rapid technological advances expose a more fundamental tension between innovation and democratic resilience. The expansion of AI’s role in politics and communication, from synthetic news to algorithmic policymaking, risks weakening public deliberation and accountability. Researchers warn that poorly governed adoption could hollow out democratic systems, concentrating wealth and power in the hands of a few tech giants while eroding the independence of traditional media. As the information ecosystem becomes increasingly mediated by generative models, public discourse risks devolving into a synthetic, corporatized form of democracy. Europe’s green transition faces a similar balancing act: harnessing technology while maintaining autonomy. The continent’s emerging clean tech ecosystem, from EV and battery production to wind and solar infrastructure, shows industrial vitality, yet dependence on Chinese inputs poses strategic and economic vulnerabilities. Avoiding a new cycle of deindustrialization will require coupling innovation with sovereignty. Diversifying supply chains, investing in grids and local manufacturing, and ensuring that the digital and green revolutions reinforce, rather than undermine, democratic and economic independence.
Global Trajectories
Youth Uprisings:
Morocco rocked by Gen Z uprising: ‘We are the youth, we are not parasites’
Alexandre Aublanc and Simon Roger, Le Monde
Young anti-corruption protesters oust Nepal PM Oli
Gopal Sharma and Navesh Chitrakar, Reuters
‘We are the last hope’: Gen Z Madagascar vows to fight on until president resigns
Rachel Savage, The Guardian
World Bank Says Africa Must Boost Jobs Amid Simmering Gen Z Anger
Alister Bull and David Herbling, Bloomberg
China’s Gigantic Hydropower Dam in Tibet: Green Energy or the “Weaponization” Of Water?
Lai Thi Thao, Modern Diplomacy
A Nobel laureate on why stablecoins may be nothing of the sort
The Economist
Across Africa and Asia, a wave of Gen Z-led protests is challenging entrenched political systems, driven by frustration over unemployment, corruption, and lack of opportunity. In Africa, the World Bank has warned that the continent must urgently create jobs to address the growing discontent among its youth, particularly as Gen Z populations swell. In Madagascar, young protesters have vowed to continue demonstrations until President Andry Rajoelina resigns, citing mismanagement and deteriorating public services. In Nepal, a government-imposed social media ban ignited broader anti-corruption protests that ultimately led to the resignation of Prime Minister KP Sharma Oli, with youth anger focused on inequality and elite privilege. Meanwhile, Morocco has seen its worst unrest since the Arab Spring, as Gen Z activists—organized under the banner GenZ212—protest lavish World Cup spending amid high unemployment and poor public services, demanding healthcare and accountability instead. These movements reflect a global generational reckoning, as young people increasingly demand systemic change.
As Gen Z mobilizes across continents to challenge political stagnation and demand systemic reform, power is being redefined through the strategic control of resources and technology. The Medog Hydropower Dam in Tibet, poised to become the world’s largest, exemplifies China’s push toward green energy and carbon neutrality. However, its strategic location on the Yarlung Tsangpo River, critical to downstream nations like India and Bangladesh, raises geopolitical tensions, with concerns about China potentially “weaponizing water” to assert regional dominance. This infrastructure project near the contested Indian border underscores a broader shift in global power dynamics, where control over natural resources becomes a key lever of influence. Similarly, the rise of stablecoins—digital currencies pegged to assets like the U.S. dollar—reflects another transformation in power structures, this time in the financial realm. The recently passed GENIUS Act in the U.S. legitimizes stablecoins through regulation, promising more efficient digital payments. Yet, they also pose risks of financial instability, regulatory loopholes, and shadow banking. Both developments highlight how technological and infrastructural advances, whether in energy or finance, can simultaneously drive progress and provoke new forms of strategic competition.
