Globalization is dead.blackrock’s larry fink so. Again, Mark Mobius of Mobius Capital Partners Said he was wrong. Which legendary investor’s point of view blindly won the trust of others? Maybe we can see for ourselves.

The pessimism about the survival of post-Cold War globalization seems more justified now than when its demise was confidently but wrongly predicted many times before. (For the record, these include the bursting of the tech bubble in the 1990s, the 9/11 attacks, the 2003 SARS outbreak, the 2005 bird flu outbreak, the 2007-08 food crisis, the 2008 financial crisis, and the coronavirus disease.)

The war in Ukraine has exacerbated supply chain congestion, and the energy shock has made freight more expensive. More persistently, the government is said to be retreating to a defensive national security position, where they will rely solely on foreign policy allies (if there really are any) for strategic trade.

Vladimir Putin’s war may indeed be an inflection point. But unless sanctions and embargoes from the rich world escalate to serious economies like China, there are good reasons to be optimistic. Here are five.

First, cross-border merchandise trade is often seen as a proxy for globalization, and relative to world GDP, it has been stagnant for over a decade. But as Scott Lincicome of the Cato Institute point outmost other indicators you might choose — international trade in services, foreign direct investment, immigration, data flows — performed well before the pandemic and appear to have recovered over the past year.

The nature of globalization has changed: trade in goods has become less relevant. In the two decades after 1990, labor cost arbitrage in manufacturing delivered huge efficiency gains, with China and other major Asian countries exporting to middle-income countries. Now that most of the space has been used up, China has become a consumer market rather than an export platform. Multinational corporations now produce and sell as much in China as they source in China.

Second, the more complex the supply chain develops, the more difficult it will be without international specialization. Iconic product semiconductors are a good example. Sure, you could throw away public money to subsidize factories to make low-value “traditional” chips for the auto industry. This wastes resources and creates trade frictions through dumping, as in steel and shipbuilding, but hardly undermines globalization.

In fact, high-value parts of the value chain are often geographically concentrated and difficult to replicate.Advanced chip research and lithography machinery manufacturing are led by the R&D center respectively IMEC Manufacturers in Belgium and lithography machines Asmar In the Netherlands. CEO of Imec tell trade secrets More recently, it will set up a research unit in the US, but its focus has always been its headquarters in Flanders. You want semiconductor research, you need to call Belgium.

Third, high energy prices make freight more expensive, yes. This may encourage outsourcing to rich economies – but they also make manufacturing and fertilizer-intensive agriculture more expensive, which will hinder it. The latter effect usually dominates. Although cargo ships are widely considered to be huge carbon emitters, transportation typically accounts for only a small part of the carbon footprint of traded goods. (that even goes For commodities mistakenly seen as emitting villains, such as cut flowers airlifted from Africa to Amsterdam and Apple and Lamb from New Zealand to the UK).Some offshoring has begun: bike makers already plan to move to Europe on hold Because energy prices are particularly high. Of course, the EU is planning a carbon border mechanism to prevent emissions-driven offshoring, but it’s too early.

Fourth, it is not simple to divide the world into economic spheres and let countries or companies choose one.Trade volume between China and the EU continuously rising despite trade tensions, and Resumption in 2021 After a bad few years with America. As a non-Chinese example, people often talk about the world splitting into three competing models of personal data management: authoritarian China, laissez-faire America, and privacy Europe.But in fact, countries like Japan have done it very well keep a foot In the US and EU camps, the US-style free flow of data has been signed, as well as the Brussels-approved data protection regime.

In the end, call it blind faith, but the final ritual of globalization has been read several times, and each time it jumps out of the hospital bed, looking spiritual. Corporate resourcefulness, tech support, and even an aggressively disruptive government didn’t break it.

The accumulation of U.S.-China tensions, the COVID-19 pandemic, tightening supply chains, and now the war in Ukraine has undoubtedly brought globalization its biggest test since the Cold War. But the international integration of the market is also likely to survive this time.