Geopolitics is creating an ‘end of an era’ vibe at Davos

Good morning from Davos.

Geopolitics is back on the global business agenda at the World Economic Forum's Annual Meeting, and that can’t be a good thing for Davos Man.

In their respective speeches yesterday, Chinese Premier Li Qiang and Ukrainian President Volodymyr Zelensky presented the old and new faces of geopolitics.

Premier Li of China gave a speech Davos regulars have heard before. He proudly announced China’s latest growth figures—an unexpectedly robust 5.2% growth rate, as per official statistics—and made a pitch for global business to (re)invest in China. “No matter how the world changes, China will stay committed to the national policy of opening up and will open its door still wider to the world,” he said.

Yet that message is unlikely to have gone over as well as it once did. Amid Russia's war in Ukraine and the prospect of more conflict-ridden Beijing-Taiwan relations, the West and its leaders are more likely to opt for “regionalization,” “friendshoring,” and “China + 1” options for trade and respond to other powers with restrictions and defensive tactics.

Ukrainian President Zelensky, meanwhile, made his case for Western nations' continued military support of his country. “Regimes like [Russia’s] exist as long as they wage wars,” he told the Davos crowd, while “we—all we in the free world—exist as long as we can defend ourselves.”

But his position too is losing steam. Two years into the conflict, Russia’s assault on his country is in a holding pattern, making it ever more improbable that the “free world” will return if and when the war ends. It’s also increasingly doubtful that Ukraine’s key Western allies will continue to buy into Zelensky’s narrative, whether in the U.S. or Europe. Trump’s victory in Iowa and the rise of populists in Europe suggest as much.

Two conversations I had with leaders here embodied the 'end of an era' tone that accompanies this new reality.

“My biggest worry is that the global situation on peace and security further deteriorates and then affects all the other domains of global cooperation, such as climate, health, technology, and trade,” WEF president Børge Brende told me, commenting on a joint WEF-McKinsey report that shows peace and security cooperation in free fall.

Fresh off a trip to China, Belgian Prime Minister Alexander De Croo, who holds the rotating EU Council presidency this year, told me he wasn’t planning on re-embracing a pre-pandemic type of trade relationship with China anytime soon. “Sometimes, China can be a partner,” he told me, “but sometimes it can be a competitor, and sometimes it can be a rival.”

If China stops dumping practices and other types of anti-competitive state aid, the EU will play ball, he said. But that will be based on China being trustworthy, not on Europe having blind trust. “If there’s no foul play, then let’s go,” he said. That’s hardly an enthusiastic endorsement from Europe’s most globalized and most free trade-dependent country.

More news below.

Peter Vanham
peter.vanham@fortune.com
@petervanham

This story was originally featured on Fortune.com