Globalization Is Fragmenting—But Not Retreating

Morgan Stanley’s emerging markets team examines how globalisation is evolving into a more fragmented, multipolar system as U.S. dominance recedes. 

• Global trade is being rewired rather than reduced, with regional blocs and bilateral agreements replacing multilateral frameworks and intra-Global South trade accelerating.

• Capital flows are diversifying away from U.S. assets, with declining foreign Treasury ownership and rising allocations to gold and non-traditional currencies.

• Talent flows are shifting, as migration and investment increasingly redistribute toward alternative hubs outside the U.S.

As global economic gravity disperses, the report explores how emerging markets may capture structural, rather than cyclical, opportunity.