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With the future of the neoliberal “globalised” world order in doubt, contrasted by the rise of multiple, competing centres of economic, political and strategic influence, Australia will not only have to accept this new reality, but we will also have to prepare to confront it, whether we want to or not.
Since the end of the Cold War in the early 1990s, globalisation has surged to unprecedented heights, reshaping economies, societies and the very contours of international engagement.
Following the collapse of the Soviet Union in 1991 and the opening up of formerly closed markets in eastern Europe and Asia, the world witnessed a tidal wave of cross-border trade, investment and technological diffusion. Multinational corporations expanded their supply chains ever further, exploiting comparative advantages in labour costs and resource endowments.
Financial markets became intricately linked, as capital flowed freely from one jurisdiction to another, fuelling asset bubbles and driving economic growth. Advances in information and communications technology, especially the proliferation of the internet from the mid-1990s onwards, accelerated this process, shrinking distances and enabling real-time coordination of economic activity across continents.
Australia, for its part, embraced this era of global integration with enthusiasm. Tariff barriers that had once protected domestic industries were slashed, while foreign direct investment was actively courted.
The mining boom of the 2000s exemplified the fruits of this openness: Chinese demand for iron ore and coal propelled Australia to the forefront of global commodity markets, generating windfall revenues that funded infrastructure, education and health services. Simultaneously, the services sector, driven largely by finance, education and tourism, flourished as international students and tourists were drawn to our shores.
Australian companies became adept at plugging into global value chains, supplying specialised components, agricultural produce and technical expertise to markets from Tokyo to Frankfurt. This period of heightened globalisation not only drove gross domestic product (GDP) growth but also spurred innovation, labour mobility and cultural exchange, embedding Australia ever more deeply within the world economy.
Yet, as the 21st century progressed, the tide began to turn. A combination of geopolitical rivalry, protectionist impulses and the limitations of hyper-globalisation has given rise to a more fragmented international order.
The unipolar moment of the 1990s and early-to-mid 2000s, when the United States stood as the undisputed guarantor of the rules-based system, increasingly has given way to a multipolar reality.
China’s economic ascent, India’s burgeoning market, resurgent Russia and the European Union’s quest for strategic autonomy have all chipped away at the consensus-driven global architecture.
Trade wars, sanctions and “friend-shoring” strategies now punctuate international relations, signalling the end of globalisation as the dominant model. Instead, we face an era of competitive interdependence, where alliances are fluid, supply chains are regionalised and economic policymaking is increasingly shaped by strategic imperatives rather than pure market logic.
In this evolving landscape, Australia must navigate carefully, balancing its open-market legacy with the imperatives of national resilience and diversified partnerships.
Highlighting this need to respond to the waning days of globalisation is visiting ASPI senior fellow Marc Ablong in a piece for ASPI titled Bookshelf: Australia in a fragmenting and deglobalising world, in which he articulated a narrative established by Elisabeth Braw in her 2004 book Goodbye Globalization: The Return of a Divided World which highlighted “that the era of frictionless globalisation is giving way to an era of strategic geo-economics, where states deploy economic tools to advance geopolitical aims”.
Geoeconomic v geopolitical aims
One of the most powerful tools in the revisionist global order’s arsenal has long been identified as the concept of “hybrid” or “grey zone” warfare, whereby they leverage every element of national power, particularly the economic aspect to achieve their geopolitical objectives, blurring the lines of what constitutes “peace time” and “war time”.
Ablong articulated this and Braw’s key point, saying, “This change has manifested as weaponised interdependence, where reliance on a specific nation for essential goods allows the supplier to dominate the vulnerable customer; the rise of strategic industrial policy as nations seek to onshore or friend-shore essential industries and reshore national manufactures; and the increasing fragmentation of the global trading system into competing blocs decoupling from the global free trade system.”
We have seen the acceleration of Beijing’s attempts to secure favourable geopolitical partnerships through organs like the Belt and Road Initiative (BRI) and multilateral organisations like the Brazil, Russia, India, China and South Africa (BRICS) group across the Indo-Pacific, with specific focus on the developing nations of the South Pacific, Africa, south-east, western and central Asia, with growing interests in central and south America.
Through these efforts, Beijing has actively and rapidly expanded its influence across the globe and has directly leveraged its economic capacity to coerce nations or governments that dare question the glory of the People’s Republic of China, as Australia bore witness to during the COVID-19 pandemic.
Ablong expanded on this, saying, “Braw traces the fall of globalisation through some key global economic turning points of recent years, such as the 2008 Global Financial Crisis, the rise of China as a strategic competitor, the battle for dominance in the 5G market, the effect of COVID-19, and Russia’s invasion of Ukraine. These events highlight the vulnerabilities such as fragile supply chains and strategic risks from overreliance on authoritarian states.
“She argues that globalisation as a beneficial and irreversible force has been replaced by a growing emphasis on national resilience, security of supply chains and strategic autonomy. She paints a picture of a world increasingly fractured by geopolitical tensions and economic nationalism. In 2025, amid escalating trade wars, the rising dominance of Chinese manufacturing – which has contributed to China’s rising market power but created new vulnerabilities for the rest of the world – and ensuing global counter-reactions, this forecast has now become reality.”
This has massive impacts for Australia, particularly as the United States continues to remake the post-Second World War economic, political and strategic order that became entrenched post-Cold War and the nation grapples with the reality of a more divided, disconnected economic reality.
Ablong said, “Australia is already moving in this direction. We have blocked Chinese investments in critical infrastructure and moved to protect sensitive technologies and invest in Australian industry. Braw argues that such measures will become more necessary as economic warfare becomes a standard geopolitical tool. Australia must engage in a more competitive, contested and fragmented global economic landscape, and navigate a delicate balancing act: maintaining access to global markets while reducing strategic vulnerabilities. That necessitates deepening trade ties with current partners and like-minded nations, investing in domestic manufacturing and sovereign capability advantages, and diversifying supply chains.”
This isn’t all bad news though, despite the status quo for Australian policymakers to take the easiest way out when it comes to economic, political and strategic policymaking, rather, as I have often said, the challenges of the competitive and contested regional and global order presents Australia with unique opportunities to transform our economic circumstances, competitiveness and complexity, as well as our integration with “like-minded” nations.
Ablong articulated this, saying, “For Australia, there is a chance to become a more valuable partner to Western allies. Our abundance of critical minerals – including lithium and rare earths – advanced research capabilities, and stable democracy position us to play a bigger role in trusted and secure supply chains. At the same time, Australia must contend with higher costs, slower growth and the challenge of scaling up industries that have long been offshored. We must rebuild Australia’s economic complexity while ensuring that trade diversification strategies don’t replicate old dependencies in new forms.”
Strategic foresight
Confronting this reality and embracing the opportunities require Australian policymakers and the Australian public to begin acting with and demanding strategic foresight, respectively, across every aspect of the nation’s economic and industrial policy.
Ablong and Braw articulated this need, saying, “Ultimately, Goodbye Globalization is a call for strategic foresight. Braw doesn’t argue for isolationism or protectionism, but rather for realism. Australia must recognise that the globalised order of the past few decades was not inevitable and is not permanent. New rules, new alliances and new vulnerabilities are taking shape. As Braw makes clear, the future won’t be shaped by the cheapest bidder, but by those who can build trust, resilience and cooperation in a more divided world.”
This approach echoes the sentiment of US geostrategic analyst and author Peter Zeihan. who in his book The End of the World is just the beginning: Mapping the collapse of Globalization articulated, “Bottom line: the world we know is eminently fragile. And that’s when it is working to design. Today’s economic landscape isn’t so much dependent upon as it is eminently addicted to American strategic and tactical overwatch. Remove the Americans, and long-haul shipping degrades from being the norm to being the exception. Remove mass consumption due to demographic collapses and the entire economic argument for mass integration collapses. One way or another, our ‘normal’ is going to end, and end soon.”
“Australia’s geo-economic environment has never been more dangerous. For policymakers, business leaders and citizens, this is a crucial moment of reckoning. How can we protect our sovereignty while remaining open to the world? How can we safeguard our economic future without sacrificing our democratic values? How can we maintain our standard of living while facing generational economic uncertainty?
“Australia needs to adopt a more thoughtful strategic approach, focused on a strategic alignment between economic and security policies. If we are to say goodbye to globalisation, then Australia needs not only strategic agility but political courage. The time for strategic adaptation is now,” Ablong stated, and that is where we need to begin, urgently.
Final thoughts
Australians must face some hard truths if we’re to safeguard our future.
First, the Indo-Pacific is fast becoming the world’s most contested region. As China, India, Pakistan, Thailand and Vietnam flex new economic, political and military muscle – and as Japan and South Korea reassert themselves, competition on our doorstep is not only heating up, it is becoming our new normal. We need to recalibrate our “whole-of-nation” strategy accordingly.
Second, without a sustained surge in investment, reform and long-range planning, we risk not only slipping behind but being swept away by the inertia of our region. If we don’t act now, future generations could find Australia dwarfed by richer, more powerful neighbours, with less economic clout and weaker security.
We’ve long favoured quick wins and reactive policies. Since Federation, governments have chased immediate gains instead of playing the long game. But as the Indo-Pacific shifts beneath our feet, short-term thinking won’t cut it. We must look ahead, seize new opportunities and blunt rising threats.
The real question isn’t whether these challenges are coming – it’s when we’ll roll out a detailed, strategic response. When will Canberra set out a clear vision that rallies industry and the public behind our changing role? When will we see a plan that keeps Australia resilient amid intensifying great-power rivalry?
With China pressing its influence, Australia faces a choice: hang back as a bit-player or step up and help shape the Indo-Pacific’s future. The decisions we make now will decide whether we thrive in this new era or get swept along by it.
Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at
Stephen Kuper
Steve has an extensive career across government, defence industry and advocacy, having previously worked for cabinet ministers at both Federal and State levels.
