2008 punctured deep-seated assumptions about the smooth evolution of neoliberal globalization. It generated far-reaching changes in the structures and dynamics of the world economy, most notably inaugurating a period of secular stagnation in growth and productivity. While these trends predate 2008 (Brenner, 2006), both were considerably worsened by the economic crisis and its aftermath. The economic turmoil initiated by lockdowns during the COVID-19 pandemic also simply served to accelerate these long-standing economic trends as states struggled to contain the economic fallout (van Apeldoorn and de Graaff, 2022). It was fundamentally the deepening of economic stagnation, punctuated by the economic crises of 2008 and 2020, which drove states to intervene in their economies in ever more intensive ways to support growth.
The effect of rising state capitalist interventions was often to stabilize or even boost growth for its practitioner economies. But at the same time, state capitalist practices have inevitably served to fragment the global economy. The IMF has warned ofrising ‘geoeconomic fragmentation’ as states seek to exert control over their economies (Gopinath, 2024). International business scholars have identified how state capitalist practices have solidified the emergence of poles of politicaleconomic power characterized by increasingly distinct regional market structures, supply opportunities, regulatory systems, and risk environments (Luo and Van Assche, 2023; Lewin, 2024; Luo and Tung, 2025). At the same time, states seek to exert greater control over global value chains which extend far beyond their national or regional territories, driving ongoing integration and tension between economic poles (Schindler and Rolf, 2024). These new state capitalist practices are the source of considerable geopolitical tensions, as they threaten to disrupt the relatively unified and open global economy which was forged during the neoliberal period (Alami et al., 2025). Indeed, statecraft is increasingly geared towards securing the conditions for long-term economic security and competitiveness, industrial and technological leadership, and resilience of critical supply chains and production networks (Weiss and Thurbon, 2020; Weiss, 2021). In this way, contemporary statist economic practices can be seen simultaneously as responses to and drivers of geopolitical tension.
Despite proliferating regional conflicts, the US-China rivalry represents the key geopolitical driver of this resurgence in state capitalist practices. Since the rapprochement between China and the United States during the later stages of the Cold War, US policy towards China remained largely consistent for three decades. Its principal focus was on pushing China to open its markets and financial sector to US and global investors, in exchange for receiving access to US markets and facilitating its entry into the global economy (especially via joining the WTO) (Rolf, 2021; Hung, 2022). Despite acceding to the WTO in
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Reinventing Capitalism